UCC Remedies & Damages

Question 1

sellers remedies

Answer 1

when a buyer breaches, a seller may recover/do any of the following:
1. withhold delivery of goods,
2. cancel the K
3. cover damages = difference between the resale price and the K price (used when seller resold in good faith)
4. market damages = difference between market price and contract price
5. lost volume seller = can recover lost profits on a sale if the seller regularly sells the goods at issue and has unlimited inventory
6. stop delivery of goods (if buyer is insolvent and goods are in possession of carrier/bailee), OR
7. replevy identified goods from an insolvent buyer (in certain instances)

NOTE: seller is also entitled to incidental damages - the commercially reaonsable costs as a result of the breach

Question 2

seller’s right to replevy identified goods

Answer 2

a seller is allowed to replevy (reclaim the goods) when:
1. buyer was insolvent when it received the goods,
2. seller makes a demand w/in 10 days of buyer receiving the goods, AND
3. the goods have NOT been sold to a good faith purchaser for value

NOTE: a buyer’s misrepresentation of solvency in writing w/in 3 months prior to delivery of goods REMOVES the 10-day limitation above

Question 3

UCC buyer’s remedies & damages

Answer 3

a buyer who NEVER received the goods, RIGHTFULLY rejected, or JUSTIFIABLY revoked acceptance MAY:
1. cancel the K,
2. recover any amount paid (refund) EVEN IF buyer does NOT cancel,
3. recover incidental & consequential damages, AND/OR
4. recover either:
- Cover damages: difference between K price and price of substitute goods (if purchased in good faith)
- Market damages: difference between market price and K price (if not in good faith or no cover at all)

Question 4

buyer keeps non-conforming goods

Answer 4

If buyer keeps the non-conforming goods, then buyer is entitled to loss-in value damages
- difference between the value as promised and the value of the non-conforming goods