Also known as: aggrieved sellers · aggrieved party seller
Written by attorneys — see sources below.
A party to a contract for the sale of goods who may exercise specified remedies when the buyer wrongfully rejects goods, revokes acceptance, fails to pay when due, or repudiates the contract. The remedies include withholding or stopping delivery, reselling the goods, recovering damages for nonacceptance or the price, and canceling the contract.
Alpine Mining contracted to sell specialized mining equipment to Anthony Arnold. After Arnold sent a letter stating he would not accept or pay for the remaining equipment, Alpine Mining withheld the undelivered items still in its warehouse. The withholding prevented further loss when the buyer had clearly repudiated future performance.
Aether Technologies sold custom software servers to Angela Acosta. When Acosta refused delivery and payment, Aether Technologies incurred storage fees and transportation charges to return the servers to its facility. These expenses arose directly from the buyer's breach and were recoverable as incidental damages.
Artemis Logistics delivered goods to Anita Ali, who rightfully revoked acceptance after discovering defects. Anita Ali held the goods under a security interest and resold them. The resale followed the same procedures an aggrieved seller would use when disposing of goods after a buyer's breach.
Avalon Pharmaceuticals manufactured specialized drug components for Anika Anand under a contract. After Anika Anand repudiated and refused the completed items, Avalon Pharmaceuticals recovered lost profits because the components had no ready resale market. The recovery placed the seller in the position it would have occupied had the buyer performed.
Plaintiffs contracted with defendant Retail Marine Corp. to purchase a new boat of a specified model for $12,587.40, initially depositing $40 and later increasing the deposit to $4,250 to obtain immediate delivery on a firm sale basis instead of the originally specified four-to-six-week period. Plaintiffs' attorney sent defendant a letter rescinding the contract on the ground that plaintiff Neri faced imminent hospitalization and surgery that would make payments impossible. The boat had already been ordered from the manufacturer and was delivered to defendant at or before receipt of the rescission letter. Plaintiffs commenced an action to recover their deposit after defendant declined to refund it. Defendant counterclaimed for breach of contract and damages in the amount of $4,250. Defendant obtained summary judgment on the issue of liability, after which Special Term directed an assessment of damages to determine whether plaintiffs were entitled to return of any portion of their down payment. At the damages hearing, the boat was shown to have been sold four months later to another buyer for the same price negotiated with plaintiffs. Defendant proved without contradiction that its profit on the contract sale would have been $2,579 and that it had incurred $674 in expenses for storage, upkeep, finance charges, and insurance during the period the boat remained unsold; defendant also sought $1,250 in attorneys' fees. The trial court awarded defendant $500 on its counterclaim and directed that plaintiffs recover the $3,750 balance of their deposit. The judgment was affirmed without opinion by the Appellate Division, and defendant appealed to the Court of Appeals by leave.
A seller becomes an aggrieved seller when the buyer wrongfully rejects goods, revokes acceptance, fails to pay when due, or repudiates the contract. The breach must affect goods directly involved or the whole undelivered balance if it goes to the entire contract.
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Incidental damages include any commercially reasonable charges incurred in stopping delivery, caring for goods after breach, returning goods, or reselling them. These costs compensate the seller for out-of-pocket expenses caused directly by the buyer's nonperformance.
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An aggrieved seller may recover the price when the buyer has accepted the goods or when the goods are lost or damaged after risk of loss has passed. Recovery of the price is also available when the goods are specially manufactured and have no reasonable resale market.
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The seller may proceed under the rules for unidentified goods by withholding performance, identifying goods if commercially reasonable, or reselling unfinished goods for scrap. The seller need not complete manufacture when doing so would increase loss.
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Yes. The seller's right to reclaim goods from an insolvent buyer is subject to the rights of a buyer in ordinary course or other good-faith purchaser. Successful reclamation also bars the seller from pursuing other remedies for those goods.
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