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SELLER’S REMEDIES AGAINST THE
BUYER – UCC SECTIONS 2-703 –
2-710
The UCC also provides a series
of statutory remedies for manufac-
turers and suppliers when the buyer
has breached or otherwise indicated
that it will not follow through on the
contract. If a contractor wrongfully
rejects acceptance of the goods or fails
to make a payment when due, then
the seller can withhold the delivery of
the goods. In addition to withhold-
ing the delivery of the goods, the seller
has other rights which it can pursue
against the buyer. Among those rights
is the ability to recover damages for
non-acceptance and non-payment.
Seller’s remedies in general.
The UCC tells us that if a contrac-
tor or subcontractor wrongfully rejects
or revokes acceptance of the materials
or equipment, or fails to make a pay-
ment when due on or before delivery,
then the seller can withhold the deliv-
ery of the goods. The seller also has
the ability to recover damages for non-
acceptance and non-payment.
When the buyer refuses to accept the
goods delivered
When the buyer refuses to accept
goods that are timely and proper then
the supplier may recover damages
from the contractor. The measure of
damages is the difference between the
market price at the time and place of
tender and the unpaid contract price.
The measure of damages which we see
used frequently is that the seller can
simply sue for lost profit.
SELLER’S REMEDIES WHEN THE
GOODS ARE DELIVERED AND THE
BUYER REFUSES TO PAY
When the goods are delivered
and the contractor refuses to pay then
a number of opportunities arise for the
supplier to recover its damages. The
UCC tells us that if the buyer fails to
pay the price when it becomes due,
the seller can recover the price of the
goods accepted from the buyer. The
supplier, however, also has the right to
pursue incidental damages. Incidental
damages to the seller include all costs
and commissions incurred in stopping
delivery and in storing and taking care
of the goods pending resale.
It is important to know, however,
that if the seller sues the buyer for the
price then the seller must hold the
goods that have been identified to be
delivered and are still in the seller’s
control. However, if resale becomes
possible then the seller can resell them
at any time prior to collecting a judg-
ment against the buyer, and must
credit the recovered money against the
judgment against the buyer.
DEMAND FOR ADEQUATE
ASSURANCE
What should a seller do if it
learns that the buyer may not be able
to pay for the goods? The seller could
repudiate the contract, however, the
buyer may be able to seek damages
against the seller. So what should a
seller do when it is worried that the
buyer cannot fulfill its obligations?
The UCC has a provision that allows
the seller to demand adequate assur-
ance from the buyer in certain instanc-
es. The seller can make a demand for
adequate assurance when seller has
reasonable grounds for insecurity. A
demand cannot be made on a whim.
Once a demand is made, the sell-
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