(1) Subject to Subsection (2) and to the provisions of this article with respect to proof of market price (Section 2-723 [55-2-723 NMSA 1978]), the measure of damages for nonacceptance or repudiation by the buyer is the difference between the market price at the time and place for tender and the unpaid contract price together with any incidental damages provided in this article (Section 2-710 [55-2-710 NMSA 1978]) but less expenses saved in consequence of the buyer's breach.

(2) If the measure of damages provided in Subsection (1) is inadequate to put the seller in as good a position as performance would have done then the measure of damages is the profit (including reasonable overhead) which the seller would have made from full performance by the buyer, together with any incidental damages provided in this article (Section 2-710 [55-2-710 NMSA 1978]), less due allowance for costs reasonably incurred and due credit for payments or proceeds of resale.

History: 1953 Comp., § 50A-2-708, enacted by Laws 1961, ch. 96, § 2-708; 1967, ch. 186, § 5.

OFFICIAL COMMENTS

UCC Official Comments by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved.

Prior uniform statutory provision. — Section 64, Uniform Sales Act.

Changes. — Rewritten.

Purposes of changes. — To make it clear that:

1. The prior uniform statutory provision is followed generally in setting the current market price at the time and place for tender as the standard by which damages for non-acceptance are to be determined. The time and place of tender is determined by reference to the section on manner of tender of delivery, and to the sections on the effect of such terms as F.O.B., F.A.S., C.I.F., C & F, Ex Ship and No Arrival, No Sale.

In the event that there is no evidence available of the current market price at the time and place of tender, proof of a substitute market may be made under the section on determination and proof of market price. Furthermore, the section on the admissibility of market quotations is intended to ease materially the problem of providing competent evidence.

2. The provision of this section permitting recovery of expected profit including reasonable overhead where the standard measure of damages is inadequate, together with the new requirement that price actions may be sustained only where resale is impractical, are designed to eliminate the unfair and economically wasteful results arising under the older law when fixed price articles were involved. This section permits the recovery of lost profits in all appropriate cases, which would include all standard priced goods. The normal measure there would be list price less cost to the dealer or list price less manufacturing cost to the manufacturer. It is not necessary to a recovery of "profit" to show a history of earnings, especially if a new venture is involved.

3. In all cases the seller may recover incidental damages.

Point 1: Sections 2-319 through 2-324, 2-503, 2-723 and 2-724.

Point 2: Section 2-709.

Point 3: Section 2-710.

"Buyer". Section 2-103.

"Contract". Section 1-201.

"Seller". Section 2-103.

Compiler's notes. — Laws 1967, ch. 186, § 6, was compiled as 55-3-105 NMSA 1978.

Utilization of section in jury instructions. — Where damages are not sufficiently before the jury, an instruction incorporating the mandates of this section is not improper, and a court of appeals will not condemn a trial court's utilization of a local statute in instructing on damages without substantial authority to the contrary. Jaeco Pump Co. v. Inject-O-Meter Mfg. Co., 467 F.2d 317 (10th Cir. 1972).

Court can make findings on damages caused by buyer's repudiation of the contract when there is sufficient evidence. Elephant Butte Resort Marina, Inc. v. Wooldridge, 1985-NMSC-014, 102 N.M. 286, 694 P.2d 1351.

Am. Jur. 2d, A.L.R. and C.J.S. references. — Fraud of buyer in ordering more than his business requires as entitling one selling to extent of buyer's requirements to maintain action for damages, 7 A.L.R. 498, 26 A.L.R.2d 1099.

Shipping goods after notice of repudiation by buyer, 27 A.L.R. 1230.

Damages as affected by anticipatory breach of contract by buyer, 34 A.L.R. 114.

Measure of damages, buyer's repudiation of or failure to accept goods under executory contract, 44 A.L.R. 215, 108 A.L.R. 1482.

Resale of property as affecting measure of seller's damages under executory contract, 44 A.L.R. 296, 119 A.L.R. 1141.

Measure of damages, buyer's repudiation of or failure to purchase shares of stock, 44 A.L.R. 358.

Duty to minimize damages by accepting offer modified by party who has breached contract of sale, 46 A.L.R. 1192.

Stipulation as to damages in case of breach of contract for purchase of goods to be manufactured by other party, as penalty or liquidated damages, 79 A.L.R. 188.

Measure of damages for buyer's repudiation of or failure to accept goods under executory contract, 108 A.L.R. 1482.

Presumption and burden of proof as to market price or value of goods in action by seller against buyer who refuses to accept goods, 130 A.L.R. 1336.

Interest as element of damages recoverable in action for breach of contract for the sale of a commodity, 4 A.L.R.2d 1388.

Unjustified refusal of buyer to accept goods as affecting recovery of down payment, 11 A.L.R.2d 701.

Measure of damages for buyer's breach of contract to purchase article from dealer or manufacturer's agent, 24 A.L.R.2d 1008.

Validity and enforceability of contract which expressly leaves open for future agreement or negotiation the terms of payment for property, 68 A.L.R.2d 1221.

77A C.J.S. Sales § 363 et seq.