Yes. The seller gets to pick the damage formula that works best for them. The law gives a wronged seller a menu of options, and it doesn't force them to pick the one that is best for the buyer who broke the contract. Both companies bet on what the market price would be when they signed a fixed-price deal. The court decided that letting the seller choose the higher 'market price' damages fairly reflects the risk the buyer took. Forcing the seller to accept a smaller amount just because they were able to resell the goods would give an unfair advantage to the party that broke the promise in the first place.

Yes, a seller who resells goods after a buyer breaks the contract can still get paid based on the market price, even if it's more than what they got from reselling. The Uniform Commercial Code, which has rules for selling goods, says the seller can choose either the market price or resale price, and doesn't have to pick the resale price just because they resold. In a set price contract, both sides take a risk on whether the market price will go up or down, and the market price payment represents that risk they agreed to. The seller doesn't have to resell to reduce its losses. But, the seller can't get attorney fees because the phrase "charges for collection" in the NORAMSEED Rules part of the contract isn't clear proof the parties meant to include attorney fees. There's no evidence that people in this type of business usually mean attorney fees when they say "charges for collection."

" `Generally, a party cannot recover attorney fees unless there is a statute or a contract that authorizes recovery of those fees.'"

Proseeds Marketing Incorporated (“Proseeds”) was to purchase seeds from Peace River Seed Co-Operative, Limited (“Peace River”) at a fixed price over a period of two years.

“Peace River' s compensatory damages would be the lesser of the 'difference between the actual sales price received by [Peace River] upon ultimate sale [of the seed] and the contract price with [Proseeds]' or 'the difference between the market price and the contract price on the total production, less the seed purchased and paid for by [Proseeds].' ”). market price …

The Court also notes that both Oregon and Texas law look to the decisions of other jurisdictions when interpreting the UCC.

Oregon follows the so-called "American rule" that parties ordinarily bear their own costs of litigation, so plaintiff must prove that a statute or a contract authorizes the recovery of those fees.

However, on the other side of the debate, commentators advocate that a seller cannot recover more in market price than it could obtain in resale price damages

From the use of “may,” the court concluded that a seller is not required to seek resale damages when it resells the goods

—the Oregon Supreme Court permitted an aggrieved seller to recover market differential, despite a resale).

As we have recognized before, Yogman provides an analytical "framework for contract interpretation."

—dealt with the possibility that when Peace River cancelled the remaining deliveries (that is, when the buyer breached), the due dates for performance in those contracts were subsequent to the cancellation.

Yes. The Uniform Commercial Code permits an aggrieved seller who has resold goods to elect to recover market price damages, even if those damages exceed what the seller would recover using the resale price. The court reasoned that the UCC fundamentally rejects the common law doctrine of 'election of remedies,' meaning the remedies listed for a seller are cumulative, not mutually exclusive. The text of the seller's remedy index (ORS 72.7030) does not contain limiting language, unlike the buyer's remedy index. Furthermore, the provision for resale damages (ORS 72.7060) is permissive ('the seller may resell'), not mandatory, and does not preclude a seller from seeking market price damages under ORS 72.7080(1). The court concluded that allowing this choice honors the bargained-for allocation of risk in a fixed-price contract, where both parties assume the risk of market fluctuations, and it prevents the breaching buyer from receiving a 'windfall' from the seller's successful mitigation efforts, which are not required in the first place.

Yes, an aggrieved seller who has resold goods can recover market price damages under ORS 72.7080(1), even if those damages exceed resale price damages under ORS 72.7060. The text, context, and legislative history of the UCC sellers' remedies provisions demonstrate that the remedies are cumulative and the UCC rejects the doctrine of election of remedies. Market price damages represent the risk for which both parties bargained in a fixed price contract. The duty to mitigate does not require a seller to resell goods or limit its damages to the resale price. However, plaintiff is not entitled to attorney fees because the phrase "charges for collection" in the NORAMSEED Rules incorporated into the parties' contracts does not clearly authorize recovery of attorney fees. The record lacks evidence of any trade usage establishing that "charges for collection" includes attorney fees.

Peace River Seed Co-Operative, Ltd. v. Proseeds Marketing, Inc.

Case Podcast

Rule of Law:

The Legal Principle

Facts:

Procedural Posture:

How It Got Here

Issue:

Legal Question at Stake

Opinions:

Majority, Concurrences & Dissents

Analysis:

Why This Case Matters

Gunnerbot