Computing Expectation Damages Buyer / Seller Damages Under the UCC

The UCC allows parties to recover market damages, which is the difference between the contract price and the market price o Thus, we figure out expectation damages by approximating the value of the contract These rules allow buyers and sellers to engage in substitute transactions, when the market damages may seem sketchy or difficult to calculate o A nonbreaching party can cover, i.e. go out and buy something as a replacement, then sue for the difference o A nonbreaching party can resell the goods, then sue for the difference BUYERS DAMAGES (consequential damages are only for SELLERS DAMAGES buyers) UCC 2-713: Buyers Damages for Non-Delivery or UCC 2-708(1): Sellers Damages for Non-Acceptance Repudiation (Market Damages) or Repudiation (Market Damages)
Buyer is entitled to the difference between the market price at the time of the breach (or when learned of breach) and the contract price This is together with any incidental and consequential damages but less expenses saved in consequence of the sellers breach [Subtracted from this are the expenses saved because of the breach.] Seller is entitled to the difference between the market price at the time of tender and the contract price

FORMULA: D= [(KP MP) + (ID)] ES UCC 2-706: Sellers Resale Including Contract for Resale (Resale Damages)
In the case of sellers, its called (RESALE) When the buyer breaches the contract, the seller can re-sell the goods to another buyer and recover the difference between the re-sale price and the contract price (together with any incidental damages, but less expenses saved in consequence of the buyers breach)

FORMULA: D= [(MP KP) + (ID + CD)] ES

UCC 2-712: Cover; Buyers Procurement of Substitute Goods (Cover)

A buyer, after the seller has breached, can go out and buy substitute goods Thereafter, the buyer can recover the difference between the contract price and the price of the substitute goods cover price (CP) by suing the seller if the difference harms them (plus incidental and consequential damages)

FORMULA: D= [(KP MP) + (ID)] ES

The seller has to go through some hoops though beforehand in order to recover, including: o The seller has to make sure that the same goods are being sold o The re-sale must relate to the goods in the breached contract o Seller has to give the buyer NOTICE of the resale Basically, this is like giving the buyer a second chance o The sellers resale must be made in good faith and in a commercially reasonable manner o Ability to get substitute transactions as long as it is REASONABLE

FORMULA: D= [(CP KP) + (ID + CD)] ES

Buyers cover MUST be made in good-faith without unreasonable delay o The buyer can NOT wait for market prices to rise This is an ELECTIVE choice o The buyer does NOT need to do this and can just rely on the other measure of damages, as long as the buyer isnt exposing itself to consequential damages by not covering

UCC 2-714: Buyers Damages for Breach in Regard to Accepted Goods

If the buyer accepts goods that turn out to be defective later on, the damages should be the difference between the value of the goods received (value of goods accepted VGA) and the value of the goods you were supposed to get under the contract (value of goods warranted VGW)

FORMULA: D= [(VGW-VGA) + (ID + CD)]

BUT, if the buyer receives goods that are defective, the buyer can also REJECT non-conforming goods o Even after acceptance, the buyer can revoke that acceptance if he finds out the goods are defective,

under certain conditions