MBE Rules · Contracts
Seller's Remedies
UCC §2-706, 2-708
The rule
An aggrieved seller may resell commercially and recover the deficiency, or recover market damages; a lost-volume seller with unlimited supply recovers its lost profit because a resale is not a substitute.
In plain English
When a seller is wronged by a buyer who fails to pay or accept goods, the seller has several options for remedies. They can either resell the goods and claim any difference between the resale price and the original contract price, or if they are a lost-volume seller, they can recover lost profits since they could have sold the goods to another buyer.
Worked example
A furniture store sells a custom sofa to a buyer for $1,000, but the buyer fails to pick it up. The store resells the sofa for $800. Since the store is not a lost-volume seller, it can recover the $200 deficiency from the original buyer. However, if the store had an unlimited supply of similar sofas, it could claim the full $1,000 as lost profit instead.
Memory hook
Resell and recover, or profit lost if supply's a lot!
The trap
Students often confuse lost-volume sellers with regular sellers, mistakenly thinking that all sellers can claim lost profits. They may overlook the importance of the seller's ability to resell the goods.
How examiners test it
Questions typically present a scenario where a buyer breaches a contract, followed by multiple choice options regarding the seller's potential remedies, often testing the distinction between lost-volume sellers and regular sellers.
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