Also known as: general market prices · market price
Written by attorneys · grounded in primary & secondary sources — see below
A price at which goods of the same kind are bought and sold in the relevant market. Courts turn first to this price when measuring damages for a seller's nondelivery or repudiation under the UCC.
Gulfstream Aviation contracted to buy aircraft parts from Grove Manufacturing at a fixed price. Grove failed to deliver. Gulfstream learned of the breach on the delivery date and purchased identical parts from another supplier. The court measured damages by subtracting the original contract price from the general market price prevailing for those parts at the place of tender.
Guardian Insurance agreed to purchase office equipment from Golden Gate Logistics for delivery at its San Francisco warehouse. After repudiation, the buyer proved the general market price at the warehouse location on the date it learned of the breach. The court rejected evidence of prices at other ports because the place of tender controls.
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Aluminum Company of America sold aluminum to Essex Group under a cost-plus formula intended to track market conditions. When energy costs surged, the formula price diverged sharply from the general market price. The court examined whether the parties' pricing mechanism still reflected prevailing market levels for comparable aluminum.
Eastern Air Lines purchased jet fuel from Gulf Oil under an output-requirements arrangement. When Gulf refused further deliveries, Eastern proved damages using the general market price for comparable fuel at the contract delivery points. The court accepted published commodity prices as evidence of that market level.
Neri contracted to buy a boat from Retail Marine at a set price. Retail Marine repudiated. Neri proved the general market price for an identical vessel on the date he learned of the breach and recovered the difference between that price and the contract price.
Coomer agreed to sell corn to Oloffson at a fixed price per bushel. Coomer repudiated before planting. Oloffson established the general market price for future-delivery corn on the date he learned of the repudiation and recovered damages measured by the difference from the contract price.
A buyer may recover the difference between the general market price and the contract price when the seller fails to deliver or repudiates. The buyer need not actually cover to use this measure.
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The general market price is determined at the place for tender or, after rejection or revocation of acceptance, at the place of arrival.
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Published prices from commodity or securities markets and spot-sale prices for widely sold goods such as vehicles ordinarily establish the general market price. When no organized market exists, the UCC permits reasonable substitutes under section 2-723.
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No. A buyer who does not cover may still recover damages measured by the difference between the general market price and the contract price plus incidental and consequential damages.
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…in December and had announced on 1 October that he would not deliver; the court erred in assessing damages by reference to the market price on 1 October, because the vendee was not bound to purchase immediately but could claim the difference between the position he was in (having money and not the goods) and that which he would…