Bonebrake v. Cox Test
The test for inclusion or exclusion in Article 2 of the UCC is whether their predominant factor is the rendition of service with goods incidentally involved or is a transaction of sale with labor incidentally involved.
Article 2 of the UCC applies to transactions in goods (items that are moveable; not real property)
Remedies for Broken Ks
K remedies are generally based on encouraging the aggrieved party to enter a substitute K and then awarding damages to make up any loss remaining. (encouraging mitigation) = This is preferred.
Seller’s Remedies (UCC 2-700s)
UCC 2-703 – Buyer wrongly rejects or revokes acceptance of goods or fails to pay on or before delivery or repudiate with respect to a part or the whole; seller may: withhold delivery of goods; stop delivery; or cancel.
UCC 2-704 – (2) can sell scrap (unfinished goods)
UCC 2-705 – Stop delivery of goods.
UCC 2-206 – Resell (2) public or private place (3) private sale; (4) public sale
UCC 2-207 – Definition of Seller
UCC 2-708 – Measure of damages for non-acceptance or repudiation by the buyer is difference between the mrkt price at the time and place for tender and the unpaid K price together with any incidental damages (2-710)
UCC 2-709 – If the seller is unable after reasonable effort to resell goods at a reasonable price or the circumstances reasonably indicate that such effort will be unavailing, then the seller may recover the K price from the buyer. = Seller must hold the goods for the buyer unless resale becomes possible.
UCC 2-710 – Incidental Damages: commercially reasonable charges, expenses incurred…
Expectation – Put the aggrieved party where they would have been had K been fully performed.
3 Inquiries To Determine Damages:
1. What is the nature and extent of the P’s compensable loss, including both the harm suffered and the availability and form of the legal remedy or remedies to redress it?
2. If there are more than one means of remedying the loss, which of the available remedies most efficiently and comprehensively compensates for it?
3. Are there any policies or principles that may limit the D’s liability fo
ts had the D not breached, P must show that there would have been profits and the likely amount of those profits. (Evergreen)]
New Business Profits: Cts are reluctant to award lost profits from a new business; a business which was not in actual operation at the time of the breach.
Unknown Cost of Completion: P must show accurately enough what his cost of completion would have been.
Substantial Performance: A party who substantially performs may sue for ordinary (expectation) damages for breach of K, if the other party fails to perform.
Exam Tip: Always discuss expectation damages in any fact pattern where the K was valid and one party materially breached.
Substitute Performance: P may recover an advanced payment (if P did not get any value for the advance) and the difference between the substitute K and the K price.
Reimbursement: P can collect expectation damages = K price – cost of completion