If the buyer breaches, what damages are owed?

If the buyer breaches, what damages are owed?

• A. The contract price
• B. The lost profits of the seller
• C. The seller's expected profit
• D. The price difference between contract and resale

Answer: (C)

When a buyer breaches a contract for the sale of goods, the damages are meant to put the seller in the position they would have been in if the contract had been performed. The best measure is the seller’s expected profit from the contract—the contract price minus the seller’s costs of performance. This reflects the economic value the seller anticipated from completing the deal, not just the price or any later resale value. If the seller actually resells the goods, a different measure can apply (the difference between contract price and resale price plus incidental costs), but the default aim in breach damages is to recover the seller’s expected profit from the original agreement.

When a buyer breaches a contract for the sale of goods, the damages are meant to put the seller in the position they would have been in if the contract had been performed. The best measure is the seller’s expected profit from the contract—the contract price minus the seller’s costs of performance. This reflects the economic value the seller anticipated from completing the deal, not just the price or any later resale value. If the seller actually resells the goods, a different measure can apply (the difference between contract price and resale price plus incidental costs), but the default aim in breach damages is to recover the seller’s expected profit from the original agreement.