Also known as: good in substitution · substitute goods · cover goods
Written by attorneys · grounded in primary & secondary sources — see below
A purchase or contract to purchase goods made by a buyer in good faith and without unreasonable delay after a seller's breach to replace those due under the contract. The buyer may recover the difference between the cost of the substitute goods and the contract price together with incidental or consequential damages less expenses saved.
Gulfstream Aviation contracted to buy specialized aircraft parts from Griffin Industries at a fixed price. Griffin Industries repudiated the contract. Gulfstream Aviation promptly located another supplier and purchased identical parts at a higher market price within a week. Gulfstream Aviation may recover the price differential plus any incidental costs from Griffin Industries because the substitute purchase satisfies the requirements for cover.
North Drive contracted with West Fleet for brake assemblies at a fixed price. West Fleet cancelled after its warehouse flooded. North Drive contacted two distributors and bought substitute assemblies at a higher price within ten days to keep repair operations running. North Drive can recover the difference between the cover price and contract price because the purchases were made in good faith and without unreasonable delay.
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The buyer must act in good faith and without unreasonable delay when making a reasonable purchase of substitute goods. Prompt action after the breach and selection of commercially comparable goods satisfy these standards and permit recovery of the price differential.
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No. A buyer who does not cover may still pursue other remedies such as market-price damages or consequential damages. The cover mechanism is optional and does not limit available relief.
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The buyer recovers the difference between the cost of cover and the contract price together with incidental or consequential damages less any expenses saved because of the breach. This measure places the buyer in the position it would have occupied had the seller performed.
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…contract price and the price Roth actually paid for cover. UCC section 2-712 provides that a buyer may "cover" by purchasing substitute goods and recover the difference between the cost of cover and the contract price. If the buyer does not cover, UCC section 2-713 provides that the buyer may recover the difference between the…