I) Buyers General Damages for Total Breach Traditional measure of general damages for total breach of K by the seller

r is the difference between the market price of the goods and the K price. a) The relevant price is that which is in effect at the time the buyer learned of the breach. UCC addition: The buyer may choose to cover; make a good faith purchase or K to purchase substitute goods without unreasonable delay. a) The buyer may then recover the difference between the cost of cover and the K price. b) The buyers failure to cover will bar recovery of consequential damages. Breach until after performance is due- where defective goods are shipped and defects are discovered later. a) Damages are measured as of the time the buyer could have covered. UCC accelerates the date on which damages are assessed in cases where there is a breach by anticipatory repudiation. a) Conflict between the two provisions: (1) 2-713 The measure of damages for non-delivery or repudiation by the seller is the difference between the market price at the time when the buyer learned of the beach and K price. Between K price and market price as of the time the buyer would reasonably cover. Build in avoidable consequences. If the buyer does not cover, damages cannot be enhanced by the buyers remaining idle until the time for delivery under the K. (2) 2-610 Permits the aggrieved party after the repudiation to await performance for a commercially reasonable time. II) Buyers Damages for Breach of Warranty or Fraud Breach of Warranty a) Measure is the difference between the value of the goods accepted and the value they would have had if they had been as warranted b) Value is determined at the time and place of acceptance. c) Legal fiction- objective market standard of value. d) UCC 2-714(2) which permits recovery where special circumstances show proximate damages in a different amount.

e) UCC 2-715 specifically takes into account the buyers special needs in allowing for consequential damages, provided that the seller has reason to know of those needs- a complex subjective-objective test. Fraud and Misrep. Damages a) UCC 2-721- same as for breach of K III) Buyers Consequential & Incidental Damages for Sellers Breach Lost profits and other proximate damages are recoverable only if these were foreseeable to the seller. a) UCC 2-715(2) consequential damages include: any loss resulting from general or particular requirements and needs of which the seller at the time of King had reason to know and which could not reasonably be prevented by cover or otherwise. b) Example of special circumstances a seller may not be liable for: If a suv-vendee will cancel its account with the buyer. The seller will neither be liable for damages caused by the cancellation nor for general loss of good will. Lost profits occurring from the market shortage when the seller has reason to know the buyer cannot obtain substitute goods when the goods are brand name goods and seller controls the supply of goods bearing the bran or when the goods are made pursuant to a patent exclusively controlled by one of the parties. a) Where seller delivers goods to a manufacturer knowing they are to be used in the manufacturing process, the seller has reason to know that defective goods may cause a disruption of production and a consequent loss of profits. UCC permits the parties to limit or exclude consequential damages by agreement, unless the limitation or exclusion is unconscionable. Incidental damages- expenses reasonably incurred in inspection, receipt, transportation, and care and custody of goods rightfully rejected. a) Any commercially reasonably charges, expenses or commissions in connection with effecting cover. b) Any other reasonable expenses incident to the delay or breach are recoverable as damages.

IV) Sellers General Damages Sellers general damages for non-acceptance or repudiation by the buyer is the difference between the market price and the unpaid K price. a) UCC provides that if the difference between the K price and the market price provides inadequate recovery, the measure of the damages is the profit (including reasonable overhead) which the seller would have made from full performance by the buyer. V) Sellers General Damages following Resale In the event of a breach that leaves the goods in the sellers possession or control, the seller may identify the goods to the K and resell them at a private or public sale. a) Seller may then recover from the buyer the difference between the resale price and K price, provided the sale is conducted in a commercial reasonable manner and prior notice of the intended resale is given to the buyer. VI) Sellers Consequential & Incidental Damages Consequential damages are not available to the seller. 1-106. Only exception to common law view- where payment is to be made to a third person, the creditor has been allowed to recover special damages suffered, often containing of injury to credit and reputation. UCC does expressly permit recovery for incidental damages suffered. a) Include any commercially reasonable charges, expenses or commissions incurred in stopping delivery, in the transportation, care and custody of goods after buyers breach, in connection with return, or resale of the goods or otherwise resulting from the breach. b) 2-706 and 2-708??????? VII) Sellers Action for the Price It is not an action for the damages. Such an action is available if the goods to the K have been accepted by the buyer. UCC 2-709 (1)(a) It is also available if the seller identifies the goods to the K and is unable after reasonable effort to resell them at a reasonable price, of if the circumstances reasonably indicate that such efforts will be unsuccessful. UCC 2-709 (1)(b).

In this event, the seller MUST hold the goods for the buyer, but if resale subsequently becomes practicable the seller MAY resell them at any time prior to collection of a judgment for the price. UCC 2-709 (2).

The seller also has an action for the price if the goods are lost or damages within a commercially reasonable time after risk of their loss has passed to the buyer.

VIII)

Contracts to Manufacture Special Goods If manufacture is completed the seller may maintain an action for the price if the goods are not reasonably resalable and if resalable, the seller may utilize the resale remedy or maintain an action for damages.

Two options when the repudiation occurs prior to completion of manufacture: (1) To complete manufacture, appropriate the goods to the K and then exercise the remedy of resale or of an action for the price. (2) Cease manufacture and resell for scrap or salvage value or proceeds in any other reasonable manner.

UCC provides no remedy. Seller may sure for damages measured by the difference between M and K plus incidental damages, or for profit that would have been made. And lost reasonably incurred

IX) Contracts to Sell Realty: Total Breach Breach by vendor a) Upon vendors breach of a K because of inability to convey good title, the vendee may not recover for loss of bargain. (1) Usually can recover down payment plus the reasonable expenses in examining title. b) The vendor who has good title but refuses to convey will be liable for ordinary K damages, measured by the difference between value of land and the K, along with consequential damages. c) Vendor who is aware of the defect in title at the time of K-ing will be liable. d) Or if a previously unknown curable defect is discovered and the vendor fails to utilize best efforts to remover defect, liability will attach. e) American Rule- vendee is entitled in all cases to recover for the loss of bargain together with consequential damages pursuant to the general principles of K damages. Breach by the Vendee

a) Difference between the K price and the market value of the real property at the time of the breach. Buyer may be able to recover consequential damages. Consequential & incidental Damages Consequential- 2-715 include the profits which the buyer could have made by reselling the contracted-for goods had they been delivered. Incidental Damages- 2-715 to include expenses reasonably incurred in inspection, receipt, and transportation and care and custody of goods rightfully rejected, any commercial reasonable charges, expenses or commissions in connection with effecting cover and any other reasonable expenses incident to the delay or other breach

Wholesaler agrees to sell 100 pairs of Manolo Blahniks to Retailer for an agreed upon price of $200/pair (payment due within 30 days of receipt).

Retailer only receives 90 pairs of shoes (some of the shoes were damaged). Retailer notifies Wholesaler of the non-conformity who cannot accommodate the original order. She tells him she plans on keeping them but is only paying for the shoes received less damages including the repairs to the damaged shoes costing $500. Wholesaler admits to the mistake and agrees.

Retailer makes a 50% markup on the cost of shoes sold. What are Retailers damages? Non-conformityresulting in the ordinary course of events from the sellers breach.

Breach of warranty- measure is the difference between the value of the goods accepted and the value they would have had if they has been as warranted. This value is established by the reasonable cost of repair. In this case, the buyer had to pay $500.

What Buyer (Retailer) was Promised What the Buyer (Retailer) got Damages + Incidental Damages + Consequential Damages Total Damages

$ 100 pairs $ 90 pairs

$ 10 pairs-2000 $ $ $ 500

Wholesaler agrees to sell 100 pairs of Manolo Blahniks to Fashion Designer for an agreed upon price of $200/pair plus $500 for freight. Wholesaler knows the shoes are for an upcoming fashion show.

Two days before the fashion show Wholesaler tells Fashion designer that he cannot supply the shoes as promised.

So what is a Fashion Designer to do? She has her assistant go around town to find 100 pairs of shoes in the right colors and sizes. This takes her assistant the full 2 days but the shoes arrive on time and intact. The average cost of each pair of shoes is $325. The assistant is paid $1,000 per day. Her reimbursement for transportation mileage is $250.

Since buyer chose to cover, the difference for cost of cover and the K price. Cover for new shoes 325 -200 = 125.

Consequential and Incidental- 2-715 damages are recoverable only if these were foreseeable to the seller: For example, if the seller knew that buyer was buying to sell to a sub-vendee the loss of resale profits, and buyer could not seasonably replace the goods on the market. Also, if the wholesaler was the only wholesaler controls the supply of all goods bearing the brand, Blahniks are very exclusive shoes, not easily found at any store.

What are Fashion Designers damages? Cost of Cover (if reasonable) Less: K Price Sub-Total + Incidental Damages + Incidental Damages Total Less: Total Damages $ 125 $ 2,000 > doesnt he pay her already? $ $ $ $ $ 325 $ 200

What does Fashion Designer owe Wholesaler?

Furstration of purpose: 1. After K is formed 2. Unforseen (subjective in nature/ view point of party) 3. Totally/Nearly destroyed. Impossibility- Based on K language. 1. After K has been entered into 2. Issues arise unforeseen by the parties 3. Makes performance of the promised task objectively impossible. Expectation- when you have a K. Where you would have been had the K been performed.

Common scenario when a Kor partially performs, and either the hiring party obtains a substitute performance, or the Kor wants to be reimbursed for his partial work. Reliance- promissory estoppel. Cost incurred on reliance. Come into play when expectation damages would not adequately compensate the plaintiff, or where there is no enforceable K, but the plaintiff is entitled to some protection anyways. Restitution- quasi-k. Unjust enrichment. The value to the defendant of the plantiffs performance. Benefit conferred, reasonable value of services rendered. Can be awarded in a suit on the K, or in suit brought in quasi-k.