For the seller, when is the contract price the proper measure of damages because the goods cannot reasonably be resold?

For the seller, when is the contract price the proper measure of damages because the goods cannot reasonably be resold?

• A. If the seller resells in good faith
• B. If the seller resells in bad faith
• C. If the seller cannot reasonably resell
• D. If the buyer covers

Answer: (C)

The key idea is that damages for a seller hinge on whether the goods can be resold. If the seller can resell, damages come from the difference between the contract price and the resale price, plus incidental damages, with adjustments for costs saved. But when the goods cannot be reasonably resold, there is no effective resale price to subtract from the contract price. In that situation, the seller’s loss is measured by the contract price itself (often with any allowed incidental damages), because the buyer’s breach deprives the seller of receiving the contract price and there’s no market value to offset it. So, when resale is not feasible, the contract price becomes the appropriate measure of damages.

The key idea is that damages for a seller hinge on whether the goods can be resold. If the seller can resell, damages come from the difference between the contract price and the resale price, plus incidental damages, with adjustments for costs saved. But when the goods cannot be reasonably resold, there is no effective resale price to subtract from the contract price. In that situation, the seller’s loss is measured by the contract price itself (often with any allowed incidental damages), because the buyer’s breach deprives the seller of receiving the contract price and there’s no market value to offset it. So, when resale is not feasible, the contract price becomes the appropriate measure of damages.