Comprehensive Volume, 18 th Edition Chapter 29: Remedies for Breach of Sales Contracts

Remedies for Breach The law provides a number of remedies for the breach of a sales contract. Remedies based on UCC theories are subject to a four-year statute of limitations. If the remedy sought is based on a non- UCC theory, a tort or contract statute of limitations established by state statute will apply.

Remedies of the Seller Remedies of the seller may include: (1) a lien on the goods until the seller is paid, (2) the right to resell the goods, (3) the right to cancel the sales contract, and (4) the right to bring an action for damages (including lost profits) or, in some cases, for the full purchase price. The seller may also recover reasonable incidental damages. In secured transactions, the buyer may have pledged some other property to the seller in case of default by the buyer.

Remedies of the Seller

Sellers’ Remedies Under Article 2 *Misrepresentation of insolvency (3 mos/10 day rules)

Remedies of the Buyer Remedies of the buyer may include: (1) rejection of nonconforming goods; (2) revocation of acceptance; (3) an action for damages for nondelivery -- both incidental and consequential damages; (4) an action for breach of warranty; (5) cancellation of the sales contract; (6) the right to resell the goods; (7) the right to bring an action for conversion, recovery of goods, or specific performance; and (8) the right to sue for damages and cancel if the seller has been negligent or fraudulent.

Remedies of the Buyer

Buyer’s Remedies Under Article 2

Limitations on Damages The parties may agree on remedies through a contractual provision for liquidated damages, for limitations on statutory remedies, or for waiver of defenses. When consumers are involved, this freedom of contract is to some extent limited for their protection.

Remedies Under CISG Under the CISG, if the buyer fails to perform any obligation, the seller may require the buyer to pay the price, take delivery, and perform other obligations under the contract. Under the CISG, a buyer may reject goods only if there is a fundamental breach of contract. The buyer may reduce the price of nonconforming goods.