ProfessorMelissa A. Hale
CaseCast™ – "What you need to know"
Mr. and Mrs. Neri (Plaintiffs) contracted with Retail Marine Corporation (Defendant) to purchase a new boat for $12,587.40, and made a deposit of $4,250. The Plaintiffs rescinded the contract six days later, and sought a return of their deposit.
The proper measure of damages under a sale of goods contract, governed by the Uniform Commercial Code, is: lost profits (including reasonable overhead) together with any incidental damages, with due allowance for costs reasonably incurred and due credit for payments or proceeds of resale.
When the Plaintiffs rescinded, Defendant has already ordered the boat, and refused to refund the deposit. The Defendant was able to sell the boat to someone else for the same price a few months later, but claimed lost profit on the sale and incidental expenses for storage, upkeep, etc. up to the point of resale. The trial court awarded Plaintiffs their deposit less $500 on the defendant’s counterclaim, equaling $3750; and the decision was upheld by the Appellate Division.
How much of their deposit were the rescinding Plaintiffs entitled to?`
Plaintiffs were entitled to the restitution sum of $4250 paid by them less an offset to defendant in the amount of $3253 on account of its lost profit of $2579 and its incidental damages of $674. So modified, affirmed.
The Defendant would have made two sales, instead of one. The rule set forth by the Uniform Commercial Code recognizes sellers’ entitlement to lost profits, as well as incidental damages, from buyers’ breaches.