Also known as: § 2-723 · UCC § 2-723 · UCC 2-723 · 2-723 · proof of market price
Written by attorneys — see sources below.
A statutory rule in Article 2 of the Uniform Commercial Code that prescribes the methods for proving market price when that price fixes the measure of damages for breach of a sales contract.
Sterling Development contracted to buy steel beams from Dawn Build at a fixed price. After repudiation, Sterling purchased substitute beams at the prevailing market rate. At trial Sterling introduced trade reports and expert testimony showing the price on the date it learned of the breach. The court accepted those materials as competent proof of market price and awarded damages measured by the difference between that price and the contract price.
Oloffson bought corn from Coomer for future delivery at a set contract price. Coomer repudiated on June 3. Oloffson offered published market quotations from the local grain exchange showing the price on that date. The court used those quotations to calculate damages as the difference between the contract price and the market price established by the exchange reports.
Richard Oloffson, doing business as Rich's Ag Service, entered into an agreement with Clarence Coomer on April 16, 1970, under which Coomer would sell and deliver 40,000 bushels of corn to Oloffson in October and December 1970. Oloffson described the deal as two separate contracts of 20,000 bushels each, priced at $1.12 3/4 per bushel for delivery by October 30 and $1.12 1/4 per bushel for delivery by December 15. Coomer confirmed the total quantity but stated he would deliver as much as possible by October 30 with the remainder by December 15. On June 3, 1970, Coomer notified Oloffson that he would not plant corn that season because of excessive wetness and instructed Oloffson to secure the corn from another source if Oloffson had commitments to third parties. The market price for corn for future delivery stood at $1.16 per bushel on that date. When Oloffson contacted Coomer again in September 1970 regarding the corn, Coomer repeated that delivery would not occur. Oloffson mailed confirmations of the April agreement to Coomer and had his attorney demand performance, but Coomer did not respond to either communication. Following the passage of both October 30 and December 15 without any deliveries, Oloffson obtained replacement corn by purchasing 20,000 bushels at $1.35 per bushel and 20,000 bushels at $1.49 per bushel. Oloffson brought suit against Coomer in the circuit court of Bureau County. After a trial without a jury, the court entered judgment for Oloffson in the amount of $1,500 plus costs. Oloffson appealed the judgment to the Illinois Appellate Court for the Third District.
View casePublished market reports, trade journals, and expert testimony concerning prices prevailing at the relevant time and place constitute competent proof. The statute authorizes courts to receive such materials without requiring testimony from every participant in the market.
Supporting sources
The buyer must prove market price as of the date the buyer learned of the breach. That date fixes the valuation point for the damages calculation under the companion remedy provisions.
Supporting sources
No. A buyer who does not cover may still recover market-price damages measured at the time the buyer learned of the breach. The statute expressly preserves that remedy even when cover is not pursued.
…Official comment, ¶ 5), is K.S.A. 84-2-713(1), which provides: "Subject to the provisions of this article with respect to proof of market price (section 84-2-723), the measure of damages for nondelivery or repudiation by the seller is the difference between the market price at the time when the buyer learned of the breach and the…