Seller's Remedies UCC §2-703, §2-705, §2-706, §2-708

Formula for Seller's Damages under §2-708 (1) *

(1) Damages formula: [Dg = P-U+G] Dg = Damages P = Market Price U = Unpaid Contract price Incidental Damages = G

Remedies available to Seller under §2-705 (1)

(1) Seller may stop a bailee or carrier from delivering a good when the buyer is outed as insolvent. [However, this right to stop has limitations: - Right to stop limited must be carload or larger. Otherwise seller should ship with COD. - Seller cannot resell when stopping a bailee - If bailee obeys unjustified stoppage order both bailee and seller can be held liable. (7-303 Documents of Title) ]

Seller's resale conditions under §2-706

(2) - Resale must refer to broken contract in some way but it is unnecessary that the goods be in existence or identified to contract before breach. (3) If conducting a private sale the Seller must give reasonable notification of intent to sell to buyer. (4) At public sale: (a)Only identified goods (b) Made at usual place or market unless goods are perishable or speedily lose value (c) if the resale location is not "within view of those attending" the location of the goods and provisions for reasonable inspection must be provided by Seller

Conditions and Formula for Seller's Damages under §2-708(2)

(2) If §2-708(1) is unfavorable to seller then damages determined by profit seller would've made from full performance, plus due allowance for costs (C) reasonably incurred and due credit for payments or proceeds of resale. E.g. if (1) puts seller in negative: [Dg = F + G + C] ; where Damages (Dg) Formula [Dg = (F + G + C) - Py - Pr] F = Profit G = Incidental Damages (2-710) C = Cost reasonably incurred Py = Payments made by buyer Pr = Proceeds from resale of unaffected inventory

Limits of Seller's Remedies under §2-705(2) *

(2) Seller can pursue relief under §2-705(1) until buyer does one of the following: a.) Buyer receives the goods b.) Acknowledgement to the buyer by bailee except carrier (difference?) that bailee holds goods for buyer c.) such acknowledgement to buyer by carrier by reshipment or warehouseman d.) negotiation to buyer of negotiable document of title

Seller's remedies as summarized in §2-703(a-f)

(a) withhold delivery of such goods (b) Stop any bailee from delivering (c) Invoke §2-704 (Sellers Right to Identify Goods) (d)Resell and recover (§2-706) (e)Recover damages (2-708) "or in proper case the price (2-709)" [I think this means in some instances buyer can collect whatever they've paid to that point] (f) Cancel

Conditions for Seller to Invoke remedies under Article 2 [Paraphrased from 1st para. of §2-703 ]

- Buyer wrongfully rejects or doesn't accept - Buyer doesn't pay -Rejects a portion or all of the contracted goods

Conditions for Seller's relief under §2-706

- One condition needs to be met for seller to resale: Buyer's breach under 2-703 or insolvency - Anticipatory Repudiation by buyer gives rise to seller's right to resale and any other remedies

Resale options available to seller under §2-706 (2)

- Public or private sale including: -sale by way of one or more contracts to sell -sale of identification to an existing contract of the seller. - Sale may be as a unit or in parcels and at any time and place and on any terms so long as they are commercially reasonable.

UCC §2-703

TITLE: Seller's Remedies in General Where the buyer wrongfully rejects or revokes acceptance of goods or fails to make a payment due on or before delivery or repudiates with respect to a part or the whole, then with respect to any goods directly affected and, if the breach is of the whole contract (Section 2-612), then also with respect to the whole undelivered balance, the aggrieved sellermay (a) withhold delivery of such goods; (b) stop delivery by any bailee as hereafter provided (Section 2-705); (c) proceed under the next section respecting goods still unidentified to the contract; (d) resell and recover damages as hereafter provided (Section 2-706); (e) recover damages for non-acceptance (Section 2-708) or in a proper case the price (Section 2-709); (f) cancel.

UCC §2-706

TITLE: Seller's Resale Including Contract for Resale. (1) Under the conditions stated in Section 2-703 on seller's remedies, the seller may resell the goods concerned or the undelivered balance thereof. Where the resale is made in good faith and in a commercially reasonable manner the seller may recover the difference between the resale price and the contract price together with any incidental damages allowed under the provisions of this Article (Section 2-710), but less expenses saved in consequence of the buyer'sbreach. (2) Except as otherwise provided in subsection (3) or unless otherwise agreed resale may be at public or private sale including sale by way of one or more contracts to sell or of identification to an existing contract of the seller. Sale may be as a unit or in parcels and at any time and place and on any terms but every aspect of the sale including the method, manner, time, place and terms must be commercially reasonable. The resale must be reasonably identified as referring to the broken contract, but it is not necessary that the goods be in existence or that any or all of them have been identified to the contract before the breach. (3) Where the resale is at private sale the seller must give the buyerreasonable notification of his intention to resell. (4) Where the resale is at public sale (a) only identified goods can be sold except where there is a recognized market for a public sale of futures in goodsof the kind; and (b) it must be made at a usual place or market for public sale if one is reasonably available and except in the case of goods which are perishable or threaten to decline in value speedily the seller must give the buyerreasonable notice of the time and place of the resale; and (c) if the goods are not to be within the view of those attending the sale the notification of sale must state the place where the goodsare located and provide for their reasonable inspection by prospective bidders; and (d) the seller may buy. (5) A purchaser who buys in good faith at a resale takes the goods free of any rights of the original buyer even though the sellerfails to comply with one or more of the requirements of this section. (6) The seller is not accountable to the buyer for any profit made on any resale. A person in the position of a seller (Section 2-707) or a buyer who has rightfully rejected or justifiably revoked acceptance must account for any excess over the amount of his security interest, as hereinafter defined (subsection (3) of Section 2-711).

UCC § 2-705

TITLE: Seller's Stoppage of Delivery in Transit or Otherwise. Seller's Stoppage of Delivery in Transit or Otherwise. (1) The seller may stop delivery of goods in the possession of a carrier or other bailee when he discovers the buyer to be insolvent (Section 2-702) and may stop delivery of carload, truckload, planeload or larger shipments of express or freight when the buyer repudiates or fails to make a payment due before delivery or if for any other reason the seller has a right to withhold or reclaim the goods. (2) As against such buyer the sellermay stop delivery until (a) receipt of the goods by the buyer; or (b) acknowledgment to the buyer by any bailee of the goodsexcept a carrier that the bailee holds the goods for the buyer; or (c) such acknowledgment to the buyerby a carrier by reshipment or as warehouseman; or (d) negotiation to the buyer of any negotiable document of title covering the goods. (3)(a) To stop delivery the seller must so notify as to enable the bailee by reasonable diligence to prevent delivery of the goods. (b) After such notification the bailee must hold and deliver the goods according to the directions of the sellerbut the seller is liable to the bailee for any ensuing charges or damages. (c) If a negotiable document of title has been issued for goodsthe bailee is not obliged to obey a notification to stop until surrender of the document. (d) A carrier who has issued a non-negotiable bill of lading is not obliged to obey a notification to stop received from a person other than the consignor.

Formula for Seller's damages available after resale under §2-706 (1)

[Dg = ((Co - R) + G)-E] R = Resale Price Co = Contract Price G = Incidental Damages E = Expenses saved through buyer's breach