(1) Where the buyer has accepted goods and given notification (Subsection (3) of Section 2-607 [55-2-607 NMSA 1978]), he may recover as damages for any nonconformity of tender the loss resulting in the ordinary course of events from the seller's breach as determined in any manner which is reasonable.

(2) The measure of damages for breach of warranty is the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted, unless special circumstances show proximate damages of a different amount.

(3) In a proper case any incidental and consequential damages under the next section [55-2-715 NMSA 1978] may also be recovered.

History: 1953 Comp., § 50A-2-714, enacted by Laws 1961, ch. 96, § 2-714.

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 69(6) and (7), Uniform Sales Act.

Changes. — Rewritten.

1. This section deals with the remedies available to the buyer after the goods have been accepted and the time for revocation of acceptance has gone by. In general this section adopts the rule of the prior uniform statutory provision for measuring damages where there has been a breach of warranty as to goods accepted, but goes further to lay down an explicit provision as to the time and place for determining the loss.

The section on deduction of damages from price provides an additional remedy for a buyer who still owes part of the purchase price, and frequently the two remedies will be available concurrently. The buyer's failure to notify of his claim under the section on effects of acceptance, however, operates to bar his remedies under either that section or the present section.

2. The "non-conformity" referred to in Subsection (1) includes not only breaches of warranties but also any failure of the seller to perform according to his obligations under the contract. In the case of such non-conformity, the buyer is permitted to recover for his loss "in any manner which is reasonable."

3. Subsection (2) describes the usual, standard and reasonable method of ascertaining damages in the case of breach of warranty but it is not intended as an exclusive measure. It departs from the measure of damages for non-delivery in utilizing the place of acceptance rather than the place of tender. In some cases the two may coincide, as where the buyer signifies his acceptance upon the tender. If, however, the non-conformity is such as would justify revocation of acceptance, the time and place of acceptance under this section is determined as of the buyer's decision not to revoke.

4. The incidental and consequential damages referred to in Subsection (3), which will usually accompany an action brought under this section, are discussed in detail in the comment on the next section.

Point 1: Compare Section 2-711; Sections 2-607 and 2-717.

Point 2: Section 2-106.

Point 3: Sections 2-608 and 2-713.

Point 4: Section 2-715.

"Buyer". Section 2-103.

"Conform". Section 2-106.

"Goods". Section 1-201.

"Notification". Section 1-201.

"Seller". Section 2-103.

Section not applicable when acceptance revoked. — Subsection (2) of this section sets forth a measure of damages for breach of warranty based on an acceptance, and does not apply where the unchallenged finding is that plaintiff's acceptance of used automobile has been revoked. The applicable provision in such situation is 55-2-711 NMSA 1978. Gawlick v. American Builders Supply, Inc., 1974-NMCA-005, 86 N.M. 77, 519 P.2d 313.

In order to recover for breach of warranty, a buyer must prove four essential elements: (1) the existence of a defect; (2) that the defect was caused by the seller; (3) that the buyer notified the seller and sought repairs; and (4) that the seller failed or refused to repair or replace defective parts. Deaton, Inc. v. Aeroglide Corp., 1982-NMSC-147, 99 N.M. 253, 657 P.2d 109.

Costs of reprocessing accepted materials. — Contractor, supplied with materials which did not meet project specifications, was entitled to damages for costs incurred in reprocessing these materials. State ex rel. Concrete Sales & Equip. Rental Co. v. Kent Nowlin Constr., Inc., 1987-NMSC-114, 106 N.M. 539, 746 P.2d 645.

Measure of damages. — The district court properly awarded plaintiff $1,900, the cost of the x-ray machine, in direct damages. This amount was the difference between the value of the x-ray machine as warranted and the value of the machine actually delivered. Manouchehri v. Heim, 1997-NMCA-052, 123 N.M. 439, 941 P.2d 978.

Law reviews. — For annual survey of New Mexico law relating to commercial law, see 13 N.M.L. Rev. 293 (1983).

For article, "New Mexico's 'Lemon Law': Consumer Protection or Consumer Frustration?", see 16 N.M.L. Rev. 251 (1986).

Am. Jur. 2d, A.L.R. and C.J.S. references. — 63 Am. Jur. 2d Products Liability § 451; 63A Am. Jur. 2d Products Liability § 967 et seq.

Judgment against seller of chattels for breach of warranty as conclusive upon prior warrantor, 8 A.L.R. 667.

Liability of seller of article not inherently dangerous for personal injuries to the buyer due to the defective or dangerous condition of the article, 13 A.L.R. 1176, 74 A.L.R. 343, 168 A.L.R. 1054.

Right of dealer against his vendor in case of breach of warranty as to article purchased for resale and resold, 22 A.L.R. 133, 64 A.L.R. 883.

Resale by buyer where seller has refused to receive property rejected for breach of warranty, 24 A.L.R. 1445.

Right of seller to ship goods after notice of repudiation by buyer, 27 A.L.R. 1230.

Applicability of provision in contract of sale for return of article, where article delivered does not answer to description, 30 A.L.R. 321.

Automobile or truck, right of action for breach of warranty, 34 A.L.R. 549, 43 A.L.R. 648.

Effect of action as an election of remedy or choice of substantive rights in case of fraud in sale of property, 35 A.L.R. 1153, 123 A.L.R. 378.

Liability of seller of serum or vaccine matter for use on livestock for defects in quality thereof, 39 A.L.R. 399.

Time within which buyer of goods must give notice in order to recover damages for seller's breach of express warranty, 41 A.L.R. 812.

Use of article by buyer as waiver of right to rescind for fraud, breach of warranty or failure of goods to comply with contract, 77 A.L.R. 1165, 41 A.L.R.2d 1173.

Effect of express provision of contract limiting obligation in case of breach of warranty to replacement of defective article or part under Uniform Sales Act, 106 A.L.R. 1466.

Breach of warranty as to title, as within statutory provision requiring notice of breach of warranty on sale of goods, 114 A.L.R. 707.

Damages for breach of warranty, 130 A.L.R. 753.

Buyer's return of subject of sale and acceptance of return of or credit for the purchase price as affecting right to recover special damages for breach of warranty, 157 A.L.R. 1077.

Necessity that buyer, relying on market price, as measure of damages for seller's breach of sale contract, show that goods in question were available for market at price shown, 20 A.L.R.2d 819.

Purchaser's use or attempted use of articles known to be defective as affecting damages recoverable for breach of warranty, 33 A.L.R.2d 511.

Measure and elements of recovery of buyer rescinding sale of domestic animal for seller's breach of warranty, 35 A.L.R.2d 1273.

Time within which buyer of goods must give notice in order to recover damages for seller's breach of express warranty, 41 A.L.R.2d 812.

Use of article by buyer as waiver of right to rescind for fraud, breach of warranty or failure of goods to comply with contract, 41 A.L.R.2d 1173.

Who may enforce guarantee, 41 A.L.R.2d 1213.

Prospective buyer's release of prospective seller from liability for injuries resulting from trial use or inspection of product for sale, 93 A.L.R.3d 1296.

Measures of damages in action for breach of warranty of title to personal property under U.C.C. § 2-714, 94 A.L.R.3d 583.

Extent of liability of seller of livestock infected with communicable disease, 14 A.L.R.4th 1096.

Sufficiency and timeliness of buyer's notice under UCC § 607(3)(a) of seller's breach of warranty, 89 A.L.R.5th 319.

77A C.J.S. Sales § 395 et seq.