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7.4 UCC Article 2 Buyer's and Seller's Remedies

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1 Introduction & FYLSE Examination Guide

1.1 FYLSE Exam Structure, Passing Standard & Administration 1.2 Study Method, Pacing & MBE-Style Technique

2 Contracts: Mutual Assent, Capacity & Contract Formation

2.1 The Offer & Objective Theory of Assent 2.2 Termination & Irrevocability of Offers 2.3 Acceptance & the Mailbox Rule 2.4 Mirror Image Rule & UCC 2-207 Battle of the Forms 2.5 Mistake in Contract Formation 2.6 Fraud, Duress, Undue Influence & Illegality 2.7 Capacity to Contract

3 Contracts: Consideration, Estoppel & Implied Obligations

3.1 Consideration & the Bargained-For Exchange 3.2 Past & Moral Consideration, Pre-Existing Duty & Modification 3.3 Promissory Estoppel & Detrimental Reliance 3.4 Implied-in-Fact Contracts & Quasi-Contract 3.5 Implied Covenant of Good Faith, Fair Dealing & Indefinite Terms

4 Contracts: Third-Party Beneficiaries, Assignment & Delegation

4.1 Third-Party Beneficiary Contracts 4.2 Assignment of Rights 4.3 Delegation of Duties

5 Contracts: Statute of Frauds, Parol Evidence & Interpretation

5.1 Statute of Frauds: Contracts Within the Statute 5.2 Satisfying the Statute: Writing, Signature & Exceptions 5.3 The Parol Evidence Rule 5.4 Contract Interpretation & Canons of Construction

6 Contracts: Performance, Conditions, UCC Warranties & Breach

6.1 Conditions: Express, Constructive & Excuse 6.2 Substantial Performance vs. Perfect Tender 6.3 Cure, Rejection, Revocation & Installment Contracts 6.4 UCC Article 2 Warranties & Risk of Loss 6.5 Anticipatory Repudiation & Insecurity

7 Contracts: Remedies, Discharge & Changed Circumstances

7.1 Expectation Damages & Their Limitations 7.2 Reliance, Restitution & Liquidated Damages 7.3 Specific Performance & Injunctive Relief 7.4 UCC Article 2 Buyer's and Seller's Remedies 7.5 Impossibility, Impracticability & Frustration of Purpose 7.6 Discharge by Agreement: Rescission, Novation & Accord and Satisfaction

8 Criminal Law: Principles of Criminal Liability & Mens Rea

8.1 Actus Reus, Voluntary Acts & Omissions 8.2 Criminal Causation & Intervening Causes 8.3 Common Law & Model Penal Code Mens Rea 8.4 Mistake of Fact, Mistake of Law & Concurrence

9 Criminal Law: Inchoate Offenses & Accomplice Liability

9.1 Criminal Attempt & Impossibility 9.2 Solicitation & the Merger Doctrine 9.3 Conspiracy & Merger Doctrine 9.4 Accomplice Liability: Actus Reus & Mens Rea 9.5 Scope of Accomplice Liability, Withdrawal & Parties to Crime

10 Criminal Law: Homicide & Crimes Against the Person

10.1 Common Law Murder & Malice Aforethought 10.2 Degrees of Murder, Premeditation & Deliberation 10.3 The Felony Murder Rule & Its Limitations 10.4 Voluntary & Involuntary Manslaughter 10.5 Non-Homicide Crimes Against the Person

11 Criminal Law: Property Crimes, Theft & Habitation

11.1 Common Law Larceny 11.2 Embezzlement & False Pretenses 11.3 Robbery & Extortion 11.4 Receiving Stolen Property 11.5 Burglary 11.6 Arson

12 Criminal Law: Defenses: Capacity, Justification & Excuse

12.1 Insanity: The Four Legal Tests 12.2 Intoxication, Diminished Capacity & Infancy 12.3 Self-Defense & Defense of Others 12.4 Defense of Property, Habitation & Law Enforcement Privileges 12.5 Duress & Necessity 12.6 Entrapment & Mistake as an Excuse

13 Torts: Intentional Torts to Persons & Property

13.1 Intent, Motive & Incapacity in Intentional Torts 13.2 Transferred Intent 13.3 Battery & Assault 13.4 False Imprisonment 13.5 Trespass to Land 13.6 Trespass to Chattels & Conversion

14 Torts: Privileges & Defenses to Intentional Torts

14.1 Consent: Express, Implied & Capacity 14.2 Exceeding & Vitiating Consent 14.3 Self-Defense & Defense of Others (Tort) 14.4 Defense of Property & Recapture of Chattels 14.5 Public & Private Necessity 14.6 The Shopkeeper's Privilege

15 Torts: Negligence — Duty of Care & Breach

15.1 Duty of Care & the Foreseeable Plaintiff 15.2 Affirmative Duties to Act & Special Relationships 15.3 Standard of Care: The Reasonable Person & Children 15.4 Professional Negligence, Informed Consent & Negligence Per Se 15.5 Land Possessor Liability & Premises Duties 15.6 Breach of Duty & Res Ipsa Loquitur

16 Torts: Causation, Defenses, Multiple Tortfeasors, Wrongful Death & Damages

16.1 Cause in Fact & Multiple Actors 16.2 Proximate Cause & Intervening Forces 16.3 Contributory, Comparative Negligence & Assumption of Risk 16.4 Joint and Several Liability, Contribution & Indemnity 16.5 Vicarious Liability & Non-Delegable Duties 16.6 Wrongful Death & Survival Actions 16.7 Statute of Limitations & Claim Accrual 16.8 Tort Damages: Compensatory, Nominal, Punitive & Mitigation

17 Torts: Strict Liability & Products Liability

17.1 Strict Liability for Animals 17.2 Abnormally Dangerous Activities & Scope of Risk 17.3 Strict Products Liability & Defect Categories 17.4 Products Liability Under Negligence, Warranty & Misrepresentation 17.5 Defenses to Products Liability

18 Torts: Emotional Distress, Defamation, Privacy & Economic Torts

18.1 Intentional Infliction of Emotional Distress 18.2 Negligent Infliction of Emotional Distress 18.3 Common Law Defamation: Elements, Libel & Slander 18.4 Constitutional Limits, Privileges & Defenses to Defamation 18.5 Invasion of Privacy 18.6 Nuisance & Economic Torts

7.4 UCC Article 2 Buyer's and Seller's Remedies

Key Takeaways Explain This Topic AI

Under section 2-712 a buyer who covers in good faith recovers the cover price minus the contract price, plus incidental and consequential damages less expenses saved.

Under section 2-713 a buyer who does not cover recovers the market price at the time the buyer learned of the breach minus the contract price.

Under section 2-706 a seller who resells in good faith recovers the contract price minus the resale price, and under section 2-708(1) an unresold seller recovers the contract price minus market price.

A lost-volume seller recovers lost profit under section 2-708(2), because reselling to a second buyer would have happened anyway and so does not make the seller whole.

Section 2-709 permits an action for the full price only where the goods were accepted, were lost or damaged after risk of loss passed, or cannot reasonably be resold.

Last updated: September 2026

  • UCC Article 2 Buyer's and Seller's Remedies
  • I. UCC Article 2: Buyer's Remedies Framework

When a commercial seller defaults (by failing to deliver, repudiating, or tendering non-conforming goods that the buyer rightfully rejects or revokes), the UCC grants the buyer a comprehensive battery of remedies: ┌─────────────────────────────┐

  • │ UCC Buyer Remedies Menu │
  • └──────────────┬──────────────┘
  • │
  • ┌────────────────────────────────────┼────────────────────────────────────┐
  • ▼ ▼ ▼
  • [Cover Formula] [Market Formula] [Accepted Goods]
  • UCC § 2-712 UCC § 2-713 UCC § 2-714
  • Actual substitute purchase - Hypothetical market calculation - Retained defective goods
  • (Cover Price - Contract Price) - (Market Price - Contract Price) - (Value as Warranted minus
  • + Incidentals + Consequentials + Incidentals + Consequentials Value as Accepted)
  • Expenses Saved - Expenses Saved + Incidentals + Consequentials
  • 1. Buyer's Cover Remedy (UCC § 2-712)

Rule: The buyer may "cover" by making in good faith and without unreasonable delay any reasonable purchase of or contract to purchase goods in substitution for those due from the seller.

Statutory Formula: Cover Damages = ( Cover Price − Contract Price ) + Incidental Damages + Consequential Damages − Expenses Saved \text{Cover Damages} = (\text{Cover Price} - \text{Contract Price}) + \text{Incidental Damages} + \text{Consequential Damages} - \text{Expenses Saved} Cover Damages = ( Cover Price − Contract Price ) + Incidental Damages + Consequential Damages − Expenses Saved

Nature of Cover: Covering is optional , not mandatory. However, under UCC § 2-715(2)(a), if the buyer fails to cover when cover is reasonably available, the buyer is barred from recovering any consequential damages that could have been prevented by covering.

2. Buyer's Market Damages Remedy (UCC § 2-713)

Rule: If the buyer elects not to cover, or fails to effect a valid cover, the buyer may recover market damages based on the hypothetical market price.

Statutory Formula: Market Damages = ( Market Price at Time Buyer Learned of Breach − Contract Price ) + Incidental + Consequential − Expenses Saved \text{Market Damages} = (\text{Market Price at Time Buyer Learned of Breach} - \text{Contract Price}) + \text{Incidental} + \text{Consequential} - \text{Expenses Saved} Market Damages = ( Market Price at Time Buyer Learned of Breach − Contract Price ) + Incidental + Consequential − Expenses Saved

Measurement Point: Market price is determined at the time when the buyer learned of the breach , measured at the place for tender .

3. Buyer's Damages for Accepted Non-Conforming Goods (UCC § 2-714)

Where the buyer has accepted non-conforming goods and given seasonable notice of breach under § 2-607(3):

Statutory Formula: Breach of Warranty Damages = Value of Goods as Warranted − Value of Goods as Accepted + Incidentals + Consequentials \text{Breach of Warranty Damages} = \text{Value of Goods as Warranted} - \text{Value of Goods as Accepted} + \text{Incidentals} + \text{Consequentials} Breach of Warranty Damages = Value of Goods as Warranted − Value of Goods as Accepted + Incidentals + Consequentials

Measurement Point: Evaluated at the time and place of acceptance .

4. Buyer's Incidental vs. Consequential Damages (UCC § 2-715)

Incidental Damages (§ 2-715(1)): Expenses reasonably incurred in inspection, receipt, transportation, and care/custody of rightfully rejected goods, commercially reasonable charges in effecting cover, and expenses incident to the delay.

Consequential Damages (§ 2-715(2)): (a) Any loss resulting from general or particular requirements of which the seller at the time of contracting had reason to know (foreseeability) and which could not reasonably be prevented by cover; and (b) injury to person or property proximately resulting from breach of warranty.

II. UCC Article 2: Seller's Remedies Framework

When a buyer wrongfully repudiates, breaches, or rejects conforming goods, UCC Article 2 equips the seller with parallel statutory remedies designed to protect the seller's bargain:

1. Seller's Resale Remedy (UCC § 2-706)

Rule: If the seller resells the identified goods in good faith and in a commercially reasonable manner , the seller may recover the shortfall between the resale price and the contract price.

Statutory Formula: Resale Damages = ( Contract Price − Resale Price ) + Incidental Damages − Expenses Saved \text{Resale Damages} = (\text{Contract Price} - \text{Resale Price}) + \text{Incidental Damages} - \text{Expenses Saved} Resale Damages = ( Contract Price − Resale Price ) + Incidental Damages − Expenses Saved

Mandatory Notice Requirements:

Private Resale: Seller must give the buyer reasonable notification of intention to resell at private sale.

Public Resale (Auction): Seller must give the buyer reasonable notice of the time and place of the auction , unless the goods are perishable or threaten to decline in value rapidly.

Penalty for Lack of Notice: If seller fails to give required notice, the seller forfeits § 2-706 resale damages and is relegated to § 2-708(1) market damages.

2. Seller's Market Damages (UCC § 2-708(1))

Rule: If the seller does not resell or resells improperly, the seller recovers the difference between the contract price and the market price.

Statutory Formula: Market Damages = ( Contract Price − Market Price at Time and Place of Tender ) + Incidental − Expenses Saved \text{Market Damages} = (\text{Contract Price} - \text{Market Price at Time and Place of Tender}) + \text{Incidental} - \text{Expenses Saved} Market Damages = ( Contract Price − Market Price at Time and Place of Tender ) + Incidental − Expenses Saved

Contrast with Buyer's Rule: Seller's market price is measured at the time and place for tender (whereas buyer's market price under § 2-713 is measured when the buyer learned of the breach ).

3. The Lost Volume Seller Doctrine (UCC § 2-708(2) & Neri v. Retail Marine Corp. )

Under standard resale or market damages, a merchant seller who resells a car or boat to another customer for the same price appears to have suffered zero damages ($10,000 contract - $10,000 resale = $0). However, this creates a severe injustice if the seller is a lost volume seller .

Important

The Lost Volume Seller Test on the FYLSE: Under UCC § 2-708(2) and the landmark case Neri v. Retail Marine Corp. (30 N.Y.2d 393 (1972)), if the standard market or resale measure is inadequate to put the seller in as good a position as performance would have done , the seller is entitled to its lost profit .

To qualify as a lost volume seller, the seller must prove three factual elements:

Unlimited Supply / Expansion Capacity: The seller possessed the manufacturing capacity or inventory supply to produce or acquire both units;

Profitable Second Sale: The second transaction would have been profitable; and

Independence of Second Sale: The seller would have made the second sale regardless of the buyer's breach. The second buyer was not a substitute customer produced by the breach, but an independent customer who walked through the door.

Formula: Damages = Lost Net Profit (including reasonable overhead) + Incidental Damages \text{Damages} = \text{Lost Net Profit (including reasonable overhead)} + \text{Incidental Damages} Damages = Lost Net Profit (including reasonable overhead) + Incidental Damages . (Note: The statutory credit for "proceeds of resale" applies solely to scrap or salvage components, not to the retail resale of the finished product).

4. Action for the Price (UCC § 2-709)

An Action for the Price is the seller's statutory equivalent of specific performance—forcing the buyer to pay the full agreed contract price. Under UCC § 2-709 , an action for the price is strictly limited to three exclusive situations :

The buyer has accepted the goods (under UCC § 2-606);

Conforming goods are lost, damaged, or destroyed within a commercially reasonable time after risk of loss has passed to the buyer ; or

The goods were identified to the contract and the seller is unable after reasonable effort to resell them at a reasonable price , or the circumstances reasonably indicate that such effort will be unavailing (e.g., custom-manufactured specialty goods with zero secondary market).

III. UCC Remedies Comparative Matrix

Remedy Provision Type & Party Formula / Standard Mandatory Statutory Pre-Condition

UCC § 2-712 Buyer: Cover ( C o v e r − C o n t r a c t ) + I n c . + C o n s e q . − S a v e d (Cover - Contract) + Inc. + Conseq. - Saved ( C o v er − C o n t r a c t ) + I n c . + C o n se q . − S a v e d Good faith, reasonable purchase, without unreasonable delay.

UCC § 2-713 Buyer: Market ( M a r k e t − C o n t r a c t ) + I n c . + C o n s e q . − S a v e d (Market - Contract) + Inc. + Conseq. - Saved ( M a r k e t − C o n t r a c t ) + I n c . + C o n se q . − S a v e d Market measured at time buyer learned of breach at place of tender.

UCC § 2-714 Buyer: Accepted V a l u e W a r r a n t e d − V a l u e A c c e p t e d + I n c . + C o n s e q . Value\,Warranted - Value\,Accepted + Inc. + Conseq. Va l u e Wa rr an t e d − Va l u e A cce pt e d + I n c . + C o n se q . Seasonable notice of breach given to seller within reasonable time.

UCC § 2-716 Buyer: Specific Perf. Injunction / Decree ordering delivery of goods Unique goods OR inability to effect cover in market.

UCC § 2-706 Seller: Resale ( C o n t r a c t − R e s a l e ) + I n c . − S a v e d (Contract - Resale) + Inc. - Saved ( C o n t r a c t − R es a l e ) + I n c . − S a v e d Good faith, commercially reasonable; timely notice to buyer.

UCC § 2-708(1) Seller: Market ( C o n t r a c t − M a r k e t ) + I n c . − S a v e d (Contract - Market) + Inc. - Saved ( C o n t r a c t − M a r k e t ) + I n c . − S a v e d Market measured at time and place for tender.

UCC § 2-708(2) Seller: Lost Volume L o s t N e t P r o f i t ( i n c l . o v e r h e a d ) + I n c . Lost\,Net\,Profit\,(incl.\,overhead) + Inc. L os t N e t P ro f i t ( in c l . o v er h e a d ) + I n c . Proof of capacity, profitability, and independent second buyer ( Neri ).

UCC § 2-709 Seller: Price Full Contract Price Accepted goods, destroyed after risk passed, or unresellable custom goods.