Also known as: saved expenses
Written by attorneys · grounded in primary & secondary sources — see below
A deduction subtracted from a buyer's or seller's damages award when calculating expectation damages under the Uniform Commercial Code. It accounts for costs the non-breaching party avoids because the breach relieved it of performance obligations.
Echo Systems contracted to buy servers from Equinox Energy for delivery to a remote site. Equinox breached by failing to deliver. Echo covered by purchasing servers from another supplier that included local pickup. The court subtracted the avoided freight charges from Echo's cover damages.
Elysium Media agreed to buy broadcast equipment from Enigma Technologies at a fixed price. Enigma repudiated before delivery. Elysium did not cover and instead sought market damages. The court reduced the award by the inspection and storage fees Elysium no longer had to pay.
Select any source to read its text and confirm it supports the definition.
Eugene Ellsworth contracted to buy a boat from Retail Marine. He repudiated before delivery. Retail Marine resold the boat to another buyer. The court calculated the seller's damages by subtracting the commission and storage costs saved because the original sale never occurred.
A court identifies costs the non-breaching party would have incurred but for the breach, such as transportation, storage, or inspection fees. Only those expenses directly avoided because performance was excused are subtracted from the damages award.
Supporting sources
No. A buyer who does not cover may still recover market damages, and the expenses-saved deduction applies to that measure as well. The rule preserves alternative remedies while ensuring the award reflects actual net loss.
Supporting sources
New expenses are not subtracted as saved expenses. Only costs that the breach itself eliminated qualify for the deduction. Additional mitigation costs may instead be recovered as incidental damages if they are reasonable.
Supporting sources
…the contract price together with any incidental and consequential damages provided in this article (section 84-2-715), but less expenses saved in consequence of the seller's breach." Neither party argues that the Uniform Commercial Code is inapplicable. Both agree that the issue to be determined is which provision of the UCC…