Article 2 — Sales · Section 2-706
This guide covers UCC § 2-706, addressing a seller's right to resell goods after a buyer's breach and how to calculate damages.
Source: U.C.C. § 2-706
A seller may resell goods identified to the contract to another buyer and recover the difference between the resale price and the contract price, together with any incidental damages, but less expenses saved in consequence of the buyer's breach.
UCC § 2-706 allows sellers to resell goods if the buyer breaches the contract. The seller can then claim the difference between the original contract price and the new resale price as damages, minus any expenses saved from the breach.
The act of selling goods again, particularly after an initial buyer has breached the sales contract.
Expenses incurred as a result of the breach, such as storage, transportation, and other costs.
Example 1
A seller contracts to sell 100 widgets to a buyer at $10 each. The buyer breaches, and the seller resells the widgets for $8 each. The seller can recover damages of $200, which is the difference between the contract price ($1,000) and the resale price ($800).
Example 2
If a buyer fails to pay for a shipment of goods, the seller finds a new buyer at a lower price. The seller can calculate damages based on the difference between the original contract price and the amount received from the new buyer, deducting any costs saved due to the breach.