Whether Plaintiff’s resale of the goods may not serve as the basis of the damage award because sales three years after a breach are not commercially reasonable.
Whether commercially reasonable charges resulting from the breach include interest on the lost use of money caused by the breach.
No. We cannot say that the jury was required to find that the resale was commercially unreasonable.
No. Lost use of money constitutes consequential damages.
Plaintiff’s resale of the goods may serve as the basis of the damage award because under the circumstances three years after a breach is commercially reasonable. Where the resold goods are not those originally identified to the contract, there is a significant risk that the seller, who may perhaps have already disposed of the original goods without suffering any loss, has identified new goods for resale in order to minimize the resale price and thus to maximize damages. Therefore, in this type of case especially, a resale should be made as soon as practicable after a breach. Here, there was no market for the product at the time of the breach. Plaintiff made a continuing good faith effort to locate other purchasers. While a three-year delay is not ideal, U.C.C. remedies are to be liberally construed to ensure that the aggrieved party is put in as good a position as if the other party had fully performed.
Lost use of money constitutes consequential damages. Sellers are entitled to incidental but not consequential damages. Incidental damages include any commercially reasonable charges, expenses or commissions incurred in stopping delivery, in the transportation, care, and custody of goods after the buyer’s breach, in connection with return or resale of the goods or otherwise resulting from the breach. Although New York has interpreted incidental damages broadly to include interest payments attributable to the breach, Michigan defines incidental damages more narrowly. Interest payments on loans taken out to maintain a business when the buyer fails to pay are consequential damages. Even if lost use of money were somehow economically distinguishable form interest paid on a loan, they still constitute consequential damages. Since sellers are not entitled to consequential damages, Plaintiff was not entitled to receive interest as a measure of the damage award. Nevertheless, Plaintiff was e
ntitled to claim statutory interest from the date on which suit was filed under Michigan Laws even if as a seller, it was not entitled to interest as a measure of damages under the U.C.C.