If the buyer keeps non-conforming goods, how is loss in value measured?

If the buyer keeps non-conforming goods, how is loss in value measured?

• A. Cover price minus contract price
• B. Market price minus contract price
• C. Value as promised minus value delivered
• D. Contract price

Answer: (C)

When the buyer keeps non-conforming goods, the loss in value is measured by the difference between the value of the goods as promised (the conforming value) and the value of the goods as delivered (the nonconforming value). This captures how much value the buyer lost due to the seller’s breach. For example, if conforming goods would be worth 100, but the delivered nonconforming goods are worth 70, the loss in value is 30. Incidental and consequential damages can add on, but the primary measure of loss in value is value promised minus value delivered. The other options describe different remedies or misstate the measurement: using cover price is the measure when the buyer purchases a substitute and seeks replacement costs, not the kept-nonconforming-goods scenario; market price minus contract price is not the standard measure for this situation; and merely the contract price ignores the actual value the buyer received.

When the buyer keeps non-conforming goods, the loss in value is measured by the difference between the value of the goods as promised (the conforming value) and the value of the goods as delivered (the nonconforming value). This captures how much value the buyer lost due to the seller’s breach.

For example, if conforming goods would be worth 100, but the delivered nonconforming goods are worth 70, the loss in value is 30. Incidental and consequential damages can add on, but the primary measure of loss in value is value promised minus value delivered.

The other options describe different remedies or misstate the measurement: using cover price is the measure when the buyer purchases a substitute and seeks replacement costs, not the kept-nonconforming-goods scenario; market price minus contract price is not the standard measure for this situation; and merely the contract price ignores the actual value the buyer received.