Article 2 — Sales · Section 2-713
This study guide covers UCC § 2-713, which deals with the buyer's damages for non-delivery or repudiation in a sales contract context.
Source: U.C.C. § 2-713
Where the buyer has accepted goods and given notification of rejection, the measure of damages for non-delivery or repudiation by the seller is the difference between the market price at the time of the breach and the contract price together with any incidental damages provided in this Article, but less expenses saved in consequence of the seller's breach.
UCC § 2-713 outlines how a buyer can calculate damages if a seller fails to deliver goods or breaches the sales contract. Essentially, it allows the buyer to recover the difference between what they paid for the goods and the market price at the time of breach, plus any additional incidental costs caused by the breach, minus any savings the buyer incurred due to the breach.
The price at which goods or services are sold in a competitive marketplace at the time of the breach.
Costs incurred by the buyer as a result of the breach, which may include transportation, storage, or other additional expenses.
Example 1
A buyer contracts to purchase 100 widgets for $10 each, but the seller fails to deliver. The market price for widgets at the time of breach is $15. The buyer's damages would be calculated as ($15 - $10) x 100 = $500, plus any incidental damages.
Example 2
If a buyer paid $1,000 for goods that were never delivered and finds similar goods for $1,200 at the time of breach, the buyer would have damages of $200 plus any incidental costs, minus any savings from not having to pay for the original goods.