•General Purpose of Remedies: To put the damaged party “in as good a position as
if the other party had fully performed.”
•Under the UCC, remedies are cumulative. Damaged party is not limited to any one
remedy. However, recovery cannot exceed damage.
Remedies of Seller (Lessor)
Available remedies depend on circumstances existing at the time of breach.
•Circumstance 1: When Goods are in Progression of Seller (Lessor), seller may
1. A. Cancel the contract – Seller must notify buyer of cancellation. All remaining
obligations of seller are discharged. But he/she may pursue other remedies for
damages.
2. B. Withhold delivery – If buyer is in breach, seller can withhold or discontinue
performance. If breach is because of buyer’s insolvency, seller can refuse to deliver
goods unless the buyer pays in cash.
3. C. Resell or Dispose of Goods – seller can resell or dispose of the goods, holding
the buyer or lessee liable for any loss (Difference between release price and
contract price, together with incidental damages). Resale must be made in good
faith and in a commercially reasonable manner.
•When goods are unfinished at time of breach, the seller may (1) Cease manufacture
and resell for the scrap for the salvage value or (2) Complete manufacture and
resell.In either case, buyer is liable for deficiency (difference between resale price
and contract price, together with incidental damages).
•Resale can be private or public and goods may be sold as a unit or in parcels. Buyer
must have reasonable notice of resale unless goods are in perishable or will rapidly
decline in value. A good faith purchaser in a resale takes the goods free of any
rights of buyer, even if seller fails to comply with UCC requirements.
1. D. Recover Purchase Price – If seller is unable to resell or dispose of goods, he/she
may bring an action to recover purchase price plus incidental damages.
2. E. Recover Damages – Usually the difference between the contract price and
market price at the time and place of tender, plus incidental damages. If difference
is too small to place seller in the position that he or she would have been in if the
buyer had fully performed, seller may recover lost profits (including a reasonable
allowance for overhead and other expenses)
•Circumstance 2: When Goods are in Transit
•If goods have been delivered to a carrier (or Bailee) but buyer has not received
them, the goods are said to be in transit. If seller learns that buyer is insolvent while
