Buyer Remedies under the UCC

• Author: autor
• Pages: 223-240

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Chapter 16. Buyer Remedies under the UCC

16.1. Summary of Buyer Remedies. Under §§ 2-711 through 2-716, different remedies are

available to a buyer, depending upon whether (1) the buyer accepts the goods, or (2) the buyer

does not have the goods because either (i) the buyer rightfully rejects or revokes acceptance of

goods, or (ii) the seller fails to deliver or otherwise repudiates the contract.

16.1.1. If a buyer accepts and keeps non-conforming goods, a buyer may:

 Recover damages for the non-conformity, including damages for any breach of

warranty (§ 2-714); and

 Upon notice, deduct his damages from any part of the purchase price still due

(§ 2-717).

16.1.2. If the seller fails to make delivery or otherwise repudiates (i.e., buyer never gets

the goods), or if the buyer rightfully rejects goods or rightfully revokes acceptance of

goods, (i.e. gets the goods but returns them to the seller), the buyer may cancel the

contract, recover any portion of the price paid, and either:

 "cover" and pursue damages under § 2-712;

 recover damages for nondelivery based on market price as provided in § 2-713; or

 in certain circumstances, seek specific performance or recovery of the goods, as

allowed under §§ 2-502 or 2-716.

In addition, a buyer has a security interest in goods in his possession to the extent of (i)

any payments made on their price and (ii) any expenses reasonably incurred in their

inspection, receipt, transportation, care and custody. This means that the buyer may hold

such goods and resell them to satisfy the amounts secured, remitting any balance to the

seller.

16.2. Remedies Where Buyer Accepts Non-conforming Goods. Recall from Chapter 12 that

the buyer may have a right to reject nonconforming goods. However, if the buyer accepts them,

the buyer still has a remedy. Section 2-714 is the starting point to determine the measure of

damages when a buyer accepts and keeps non-conforming goods.

16.2.1. The measure of damages is different, depending upon the basis of the claim.

16.2.1.1. Under § 2-714(1), if the damages result from a claim other than breach

of warranty (a common example is a failure to deliver on time) the measure of

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damages is “the loss resulting in the ordinary course of events from the seller’s

breach as determined in any manner which is reasonable.” In addition, the buyer

may pursue “any incidental and consequential damages” as allowed in § 2-715.

Problem 16-1. Darla ordered eight bridesmaid dresses, to be delivered one day prior to her

wedding, at a cost of $100 per dress. The seller did not deliver the dresses until two hours after

the scheduled hour of the wedding, causing a three-hour delay of the wedding. The delay

adversely affected other contracted services, including the limousine rental, the video and

photography service contract, and the rental of the church and of an adjacent area for the wedding

reception. Needless to say, all this caused the bride emotional distress. As Darla’s attorney, what

damages would you seek?

16.2.1.2. In Chapters 6 and 7, we identified the warranties that a buyer may get

under the Code. Under § 2-714(2), if the damages arise from a breach of one of

these warranties, the measure of damages is the difference at the time and place of

acceptance between the value of the goods accepted and the value they would

have had if they had been as warranted, unless special circumstances show

proximate damages of a different amount. In addition, the buyer may recover

incidental and consequential damages under § 2-715.

As we will see in Chapter 17, we are accustomed to sellers using their freedom of

contract to provide for a different remedy for breach of warranty, such as repairing

or replacing the defective part. Nevertheless, it is important to keep in mind that

the default rule gives the buyer money damages for a breach of warranty.

Problem 16-2. Buyer orders a solar panel for $25,000 and pays for it. As part of the contract,

Seller promises that the solar panel has characteristics that are found only in solar panels that sell

for $75,000. In fact, the panel as delivered does not perform as promised, and is worth only

$20,000. Buyer decides to keep the solar panel and sue for damages. How much can Buyer

recover?

A. $55,000.

B. $50,000.

C. $20,000

D. $5,000.