Common Law Remedy Principles and Seller's Remedies under the UCC

• Author: autor
• Pages: 209-222

209

Chapter 15. Common Law Remedy Principles and Seller’s Remedies

under the UCC

15.1. Common Law Remedy Principles

15.1.1. Basic Common Law Remedy Concepts. To the extent not displaced by the UCC,

common law principles governing remedies continue to apply to both buyers and sellers. Let us

review some of those principles. At common law, you must first establish that one of the parties

has breached the agreement. If a breach exists, the non-breaching party is entitled to be

compensated for the losses suffered by the non-breaching party as a result of the breach. See § 1-

305. However, the following comm on law principles may limit the non-breaching party’s ability

to recover damages: causation, foreseeability, certainty, and mitigation.

15.1.1.1. The non-breaching party must establish that the breach caused the damage (i.e.,

causation).

15.1.1.2. The damages must have been reasonably foreseeable at the time of contracting.

This limitation often makes it difficult to obtain consequential damages. As stated in

Restatement (Second) of Contracts § 351, damages “are not recoverable for loss that the

party in breach did not have reason to foresee as a probable result of the breach when the

contract was made.”

15.1.1.2.1. Section 2-715(2) adopts the principle of foreseeability by limiting

buyer’s consequential damages to “any loss resulting from general or particular

requirements and needs of which the seller at the time of contracting had reason to

know....”

Problem 15-1. Missoula Music Shop agreed to sell a violin to Brenda, which Brenda intended to

use in an upcoming audition for a scholarship to be awarded by the University of Montana. The

Music Shop had to special order the violin, and promised to deliver it on February 1. The

audition was scheduled for February 10. On January 31, the Music Shop informed Brenda that it

would not be able to deliver the violin until February 15, after the audition. Brenda used her old

violin at the audition, and did not receive the scholarship. Brenda sues Missoula Music Shop for

the $10,000 scholarship she would have been awarded if she had won the competition. Is the

Music Shop liable for these damages?

Problem 15-2. On February 1, Farmer Bob ordered a new tractor from the local implement

dealer, which he intended to use to plant his spring wheat crop in May. The implement dealer

promised to deliver the tractor by May 1. However, the implement dealer did not deliver the

tractor until May 15. As a result of the delay, Farmer Bob was unable to plant 500 of his 2000

acres. He seeks damages from the implement dealer for his lost profits on the 500 acres. Will