Maxwell v. Norwood Marine, Inc.
58 Mass. App. Dec. 59 (1976)
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Rule of Law:
Under the Uniform Commercial Code § 2-713, the measure of damages for a seller's non-delivery of goods is the difference between the market price at the time the buyer learned of the breach and the contract price. The burden is on the buyer to prove the market price at that specific time.
Facts:
- On December 31, 1973, Plaintiff and Defendant entered into an oral contract for the Plaintiff to purchase a 1973-25 foot Chris Craft boat from the Defendant.
- The agreed-upon price was $4,200 plus the trade-in of the Plaintiff's 1973-18 foot Glastron boat, with delivery scheduled for approximately April 15, 1974.
- Prior to the delivery date, the Defendant refused to consummate the sale, thereby breaching the contract.
- On March 23, 1974, the Defendant sold the same Chris Craft boat to a third party for $9,000.
- On April 9, 1974, the Plaintiff purchased a 1974-22 foot Sea Ray boat, which the court found was not a comparable replacement, and received a $3,000 trade-in credit for his Glastron.
Procedural Posture:
- The Plaintiff sued the Defendant in a trial court for breach of contract.
- The trial court found that the Defendant had breached the contract.
- However, the trial court also found that the Plaintiff had not suffered any damages and awarded only nominal damages.
- The trial justice treated the Plaintiff's requests for rulings of law concerning damages as having been waived.
- The Plaintiff, as the prevailing party on the breach but aggrieved by the nominal damages award, appealed to the Appellate Division.
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Issue:
Under UCC § 2-713, is a buyer entitled to damages for a seller's breach of contract to sell goods, calculated as the difference between the contract price and a later resale price, when the buyer fails to provide evidence of the market price at the time the buyer learned of the breach?
Opinions:
Majority - Flynn, J.
No. A buyer is not entitled to damages based on a later resale price without affirmatively proving the market price at the time they learned of the seller's breach. UCC § 2-713 provides a specific formula for calculating damages: the difference between the market price 'when the buyer learned of the breach' and the contract price. Here, the Plaintiff failed to introduce any evidence of the boat's market value on the date he learned of the Defendant's repudiation. The Plaintiff incorrectly requested damages based on the price at which the Defendant later sold the boat. Because the Plaintiff failed to meet his burden of proof to establish damages under the statutory formula, the trial court's finding that he was not damaged, and its subsequent award of only nominal damages, was not an abuse of discretion.
Analysis:
This case underscores the critical importance of a plaintiff's burden of proof regarding damages in a breach of contract action under the UCC. It strictly interprets the timing requirement of UCC § 2-713, clarifying that 'market price' must be established at the moment the buyer learns of the breach, not at the time of performance or a subsequent resale. The decision serves as a strong precedent that a buyer's failure to present specific evidence of market value at this crucial juncture can result in the recovery of only nominal damages, even in the face of a clear breach by the seller. It cautions litigants that relying on proxies for market value, such as a later resale price, is insufficient to satisfy the statute's requirements.
