Also known as: market prices · prevailing market price
Written by attorneys · grounded in primary & secondary sources — see below
The price at which property or goods would change hands between a willing buyer and a willing seller in an open market with neither party under compulsion. Valuation drawn from established market prices supplies the measure for damages in tort and contract when a party elects the market-based remedy rather than restitution or cover.
Miles Montgomery's warehouse equipment is destroyed by a negligent driver. At trial the court determines the value of the equipment from published dealer listings at the date of loss. Because the valuation rests on established market prices, Miles receives prejudgment interest on that amount from the date of the loss until judgment.
Monarch Pharmaceuticals contracts to buy 10,000 units of a chemical at $40 per unit. The seller repudiates. Monarch learns of the breach on June 1 when the market price has risen to $55. Monarch recovers the $15 per unit difference plus incidental costs without having to prove it covered.
Select any source to read its text and confirm it supports the definition.
Majestic Construction agrees to buy steel beams for delivery in Chicago. After the seller repudiates, the buyer sues in New York. The court measures damages using the Chicago market price on the date the buyer learned of the breach rather than any New York price.
Retail Marine sells a boat to Neri for $12,000. Neri repudiates before delivery. Retail Marine proves the market price at the time and place for tender was $10,500. The court awards the $1,500 contract-market differential plus incidental costs rather than lost-profit damages.
Stoneridge Investment Partners buys shares of Scientific Atlanta at the prevailing market price. The company later discloses deceptive acts that had not been communicated publicly. Because the acts never reached the market, the court refuses to presume reliance on the integrity of the market price.
De La Tour hires Hochster to begin work in June. In May the employer repudiates. Hochster sues immediately. Damages are measured by the difference between the contract rate and the market rate for comparable services prevailing when Hochster learned of the repudiation.
A buyer may recover the difference between market price and contract price when it elects not to cover or when cover is unavailable. The market price is fixed at the time the buyer learned of the breach, and the buyer need not prove an actual substitute purchase.
Supporting sources
Yes. When property valuation rests on established market prices, the plaintiff recovers interest on the market-value award from the valuation date until judgment under the rule governing detention or destruction of property interests.
Supporting sources
Market price is determined at the place for tender or, after rejection or revocation, at the place of arrival. A court therefore uses the local market at that location rather than any other forum's price when calculating damages.
Supporting sources
…in December and had announced on 1 October that he would not deliver; the court erred in assessing damages by reference to the market price on 1 October, because the vendee was not bound to purchase immediately but could claim the difference between the position he was in (having money and not the goods) and that which he would…