Under common law expectation damages, if the seller breaches, what damages does the buyer recover?

Under common law expectation damages, if the seller breaches, what damages does the buyer recover?

• A. The cost to obtain replacement goods
• B. The difference between the cover price and the contract price
• C. The seller's lost profits
• D. The actual value of the goods delivered

Answer: (B)

When a seller breaches, the remedy aims to put the buyer in the position they would have been in if performance had occurred. The buyer is allowed to cover by purchasing substitute goods, and the damages are measured by the difference between the substitute goods’ price (the cover price) and the contract price. This difference captures the economic loss from the breach and aligns with the goal of making the buyer whole. Incidental costs of obtaining the substitute may also be recovered, but the core measure is the cover price minus the contract price. The other options don’t fit because the remedy isn’t simply the full replacement cost, it isn’t the seller’s lost profits, and it isn’t the value of goods delivered (since those goods weren’t delivered under a breached contract).

When a seller breaches, the remedy aims to put the buyer in the position they would have been in if performance had occurred. The buyer is allowed to cover by purchasing substitute goods, and the damages are measured by the difference between the substitute goods’ price (the cover price) and the contract price. This difference captures the economic loss from the breach and aligns with the goal of making the buyer whole. Incidental costs of obtaining the substitute may also be recovered, but the core measure is the cover price minus the contract price. The other options don’t fit because the remedy isn’t simply the full replacement cost, it isn’t the seller’s lost profits, and it isn’t the value of goods delivered (since those goods weren’t delivered under a breached contract).