MBE Rules · Contracts
Buyer's Damages — Cover and Market
UCC §2-712, 2-713
The rule
An aggrieved buyer may cover in good faith and recover the cover-contract differential, or recover market-minus-contract price measured when the buyer learned of the breach, plus incidental and consequential damages.
In plain English
If a buyer is wronged by a seller's breach of contract, they can either buy a replacement product (cover) and claim the difference in cost, or they can determine the market price of the product at the time they learned of the breach and subtract the original contract price to find their damages. Additionally, they can recover any incidental or consequential damages that resulted from the breach.
Worked example
A buyer orders 100 widgets for $10 each, but the seller fails to deliver. The buyer then purchases 100 widgets from another seller for $15 each. The buyer can recover the $5 difference per widget as damages, totaling $500, plus any additional costs incurred due to the breach.
Memory hook
Cover your losses, or calculate the market gap!
The trap
Exams may present scenarios where buyers fail to act in good faith or do not adequately document their cover purchases, leading students to miscalculate damages. Be careful to distinguish between the two methods of calculating damages.
How examiners test it
Questions often feature fact patterns where a buyer must decide whether to cover or calculate market damages, testing their understanding of the buyer's obligations and options after a breach.
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