Also known as: 2-706 · § 2-706 · UCC § 2-706 · UCC 2-706 · seller's resale
Written by attorneys · grounded in primary & secondary sources — see below
A statutory remedy authorizing an aggrieved seller to resell goods following a buyer's breach and to recover damages measured by the difference between the contract price and the resale price together with incidental damages.
Starlight Media contracted to sell specialized servers to Sapphire Technologies. Sapphire repudiated before delivery. Starlight resold the servers to a third party at a lower price and incurred storage costs. Starlight may recover the difference between the original contract price and the resale price plus incidental damages.
Sofia Stern paid in advance for custom laboratory equipment from Sterling Manufacturing. Sterling failed to deliver conforming goods. Sofia rightfully rejected the equipment still in her possession and resold it to recover her payments and inspection expenses. Sofia may hold and resell the goods in the same manner as an aggrieved seller.
Select any source to read its text and confirm it supports the definition.
An aggrieved seller may resell after the buyer wrongfully rejects goods, revokes acceptance, fails to pay, or repudiates the contract. The resale must be conducted in good faith and in a commercially reasonable manner.
Supporting sources
Damages equal the difference between the contract price and the resale price, plus incidental damages, less expenses saved. The resale price serves as the concrete measure of the seller's loss.
Supporting sources
Yes. Under Section 2-711(3) a buyer who rightfully rejects or justifiably revokes acceptance holds a security interest in the goods and may resell them in the same manner as an aggrieved seller under Section 2-706.
Supporting sources
No. A good-faith resale implements rather than forfeits the seller's right to damages. The seller may still pursue incidental damages or other available remedies if the resale proceeds do not fully compensate the loss.
Supporting sources
…to damages measured by the difference between the resale price and the contract price together with incidental damages under UCC 2-706(1). Ill.Rev.Stat. ch. 26, para. 2-706(1) (1985). Concluding that the Illinois Supreme Court would follow the majority of jurisdictions, which allow lost volume sellers to recoup their lost…