For a buyer in a sale of goods, which damages measure applies when the buyer covers in good faith?

For a buyer in a sale of goods, which damages measure applies when the buyer covers in good faith?

• A. Cover damages = cover price - contract price
• B. Loss in value = value promised - value delivered
• C. Market damages = market price - contract price
• D. Incidental damages

Answer: (A)

The concept tested is the cover remedy under the UCC. When a buyer covers in good faith—purchases substitute goods because the seller breached—the damages are measured by the cost of that cover minus the contract price. In other words, you recover the difference between what you paid for the substitutes and what you would have paid under the contract, and you may also recover incidental damages arising from the breach. This reflects the buyer’s actual extra expense to obtain conforming goods, which is why cover price minus contract price is the appropriate measure. Market price minus contract price applies when the buyer doesn’t cover, while loss in value or incidental damages describe other types of losses or recoveries, not the primary cover damages.

The concept tested is the cover remedy under the UCC. When a buyer covers in good faith—purchases substitute goods because the seller breached—the damages are measured by the cost of that cover minus the contract price. In other words, you recover the difference between what you paid for the substitutes and what you would have paid under the contract, and you may also recover incidental damages arising from the breach. This reflects the buyer’s actual extra expense to obtain conforming goods, which is why cover price minus contract price is the appropriate measure. Market price minus contract price applies when the buyer doesn’t cover, while loss in value or incidental damages describe other types of losses or recoveries, not the primary cover damages.