Under the seller's damages, when reselling in good faith, how are resale damages calculated?

Under the seller's damages, when reselling in good faith, how are resale damages calculated?

• A. Contract price minus resale price
• B. Market price minus contract price
• C. Lost profit
• D. Contract price

Answer: (A)

When a seller resells goods in good faith after a buyer breaches, the remedy is designed to put the seller in the position they would have been in if the buyer had performed. The primary measure of damages is the difference between the contract price and the price obtained on the resale. This captures the just shortfall the seller suffers because the buyer did not buy at the contract price, but the seller did not keep all the contract money either because of the resale. Any incidental costs of resale (like storage or marketing expenses) and any savings from not having to perform further duties can adjust this amount, but the core calculation is contract price minus resale price. The other options don’t fit this scenario: the difference between market price and contract price is the measure often discussed in other contexts, but not the standard seller’s remedy when the seller resells in good faith. Lost profits aren’t the typical measure for this breach, and taking the contract price alone ignores the money recovered from the resale.

When a seller resells goods in good faith after a buyer breaches, the remedy is designed to put the seller in the position they would have been in if the buyer had performed. The primary measure of damages is the difference between the contract price and the price obtained on the resale. This captures the just shortfall the seller suffers because the buyer did not buy at the contract price, but the seller did not keep all the contract money either because of the resale. Any incidental costs of resale (like storage or marketing expenses) and any savings from not having to perform further duties can adjust this amount, but the core calculation is contract price minus resale price.

The other options don’t fit this scenario: the difference between market price and contract price is the measure often discussed in other contexts, but not the standard seller’s remedy when the seller resells in good faith. Lost profits aren’t the typical measure for this breach, and taking the contract price alone ignores the money recovered from the resale.