Also known as: replacement costs · replacement value
Written by attorneys · grounded in primary & secondary sources — see below
2 senses
A measure of damages for conversion or destruction of commodities of fluctuating value customarily traded on an exchange, equal to the highest replacement value within a reasonable period during which replacement could occur.
A measure of damages upon termination of a conservation servitude whose purpose has become impossible, equal to the replacement value of the servitude to compensate the public for the loss.
A measure of damages for conversion or destruction of commodities of fluctuating value customarily traded on an exchange, equal to the highest replacement value within a reasonable period during which replacement could occur.
Select any source to read its text and confirm it supports the definition.
A measure of damages upon termination of a conservation servitude whose purpose has become impossible, equal to the replacement value of the servitude to compensate the public for the loss.
Select any source to read its text and confirm it supports the definition.
Each sense below has its own examples, sources, and questions.
Riverstone Manufacturing lent a precision stamping die to a client. The client returned the die with surface damage that required expensive re-polishing and forced Riverstone to halt a production run. Riverstone sues for conversion and proves liability. The court awards damages measured by the highest replacement value of an equivalent die within the reasonable period Riverstone could have obtained a substitute on the commodities exchange.
Replacement cost applies when a chattel is converted or destroyed and the item is a commodity of fluctuating value traded on an exchange. The measure is the highest replacement value within a reasonable replacement period rather than value at the time of conversion.
Supporting sources
No. When a chattel is damaged but repairable, the ordinary measure is reasonable repair cost plus loss-of-use damages, not full replacement cost. Replacement cost is reserved for total destruction or conversion of exchange-traded commodities.
Supporting sources
Riverfront Developments holds land subject to a conservation servitude held by a nonprofit. Development renders the servitude's conservation purpose impossible. The court terminates the servitude. Because the servient owner caused the loss of utility, damages are measured by the replacement value of the servitude to compensate the public for the lost conservation interest.
When a court terminates a conservation servitude because its purpose has become impossible, replacement cost measures damages to compensate the public for the loss. The servient owner's responsibility for the loss determines whether full replacement value or restitution is appropriate.
Supporting sources