Also known as: resales · resell
Written by attorneys · grounded in primary & secondary sources — see below
A remedy available to an aggrieved seller or buyer under the Uniform Commercial Code that permits the sale of goods identified to a contract after breach. The reselling party may recover damages measured by the difference between the contract price and the resale price together with incidental damages less expenses saved. A seller may also recover the full price when resale at a reasonable price proves unavailable after reasonable effort.
Riverstone Manufacturing contracted to sell custom machinery to Ricardo Rojas. Rojas refused delivery after the goods were identified to the contract. Riverstone attempted to locate another buyer but found no reasonable offers. The company sued Rojas for the full contract price.
Rhapsody Entertainment agreed to sell sound equipment to Rowan Russell. Russell repudiated before delivery. Rhapsody sold the equipment to another venue at a lower price in a commercially reasonable manner. Rhapsody then sued Russell for the difference between the contract price and the resale price plus incidental costs.
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Redwood Bank purchased specialized servers from Royal Crest Hotels. After discovering nonconformity, the bank justifiably revoked acceptance and retained the servers. Redwood Bank sold the servers to a third party and applied the proceeds against amounts paid plus inspection and storage expenses.
Aluminum Company of America supplied refined metal to Essex Group under a long-term contract. Essex resold portions of the metal at a substantial markup. The court considered Essex's resale gains when evaluating whether the original contract price produced an inequitable result for the supplier.
A buyer discovered that BMW had repainted portions of a new vehicle without disclosure. The undisclosed repair reduced the car's potential resale value. The Court examined whether the resulting harm justified the size of a punitive damages award under due process standards.
Retail Marine Corporation contracted to sell a boat to Neri. Neri repudiated before delivery. Retail Marine sold an identical boat from inventory to another customer. The court held that Retail Marine could recover lost profits because the second sale would have occurred regardless of Neri's breach.
A seller may recover the price when the buyer fails to pay and the goods are identified to the contract if the seller cannot resell them at a reasonable price after reasonable effort or circumstances indicate such effort would be unavailing.
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The resale must be made in good faith and in a commercially reasonable manner. The seller may then recover the difference between the contract price and the resale price plus incidental damages less expenses saved.
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Yes. A buyer who rightfully rejects or justifiably revokes acceptance holds a security interest in the goods for payments made and reasonable expenses and may resell the goods in the same manner as an aggrieved seller.
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No. A lost-volume seller may still recover lost profits on the breached contract even after reselling the same or similar goods to another buyer because the second sale would have occurred regardless of the breach.
…a BMW automobile buyer that, at a cost of $600, it had repainted portions of his new $40,000 car, thereby lowering its potential resale value by about 10%. The Court's opinion, which I join, explains why we have concluded that this award, in this case, was "grossly excessive" in relation to legitimate punitive damages…