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Regardless of what the seller elects to do here, her actions must reflect reasonable commercial judgment . An action is commercially unreasonable if it is clear, in light of the facts as they appear when the seller learns of the breach, that the action will materially increase the seller’s damages. The buyer bears the burden to show that this action is commercially unreasonable. [U.C.C. § 2-704(2), cmt. 2 (1951); 2 Hawkland UCC Series § 2- 704:2, Westlaw (database updated June 2021).] b. Deciding Whether to Complete Manufacture if Goods Can Be Resold (or Not) Oftentimes, it is commercially reasonable for the seller to cease manufacturing the goods if the goods would have little or no resale value. On the other hand, it may be commercially reasonable for the seller to finish manufacturing the goods, even if they would lack any appreciable resale value, for instance, if they are specially manufactured for a particular buyer. [ See Barrington Grp., Ltd., Inc. v. Classic Cruise Holdings S De RL , 435 Fed.Appx. 382 (5th Cir. 2011).] Example : A cruise line placed orders for custom leather gifts and promotional items from a manufacturer to promote a specific cruise. The cruise line wrongly withdrew two orders, which was a repudiation and, hence, a breach. When the cruise line ended the contract, the items were unfinished. The manufacturer had incurred obligations to third parties to procure various components necessary to manufacture the items. The manufacturer would breach these obligations if it cancelled its own orders with the third parties. Due to labor issues, the time frame to finish the goods was very tight. The goods were specially manufactured for the particular cruise line and, thus, would hold little resale value once the ships sailed. The manufacturer completed manufacture of the items and then sued for breach of contract. On similar facts, the Fifth Circuit upheld the district court’s finding that the manufacturer’s decision here was commercially reasonable. [ See Barrington Grp., Ltd., Inc. v. Classic Cruise Holdings S De RL , 435 Fed.Appx. 382 (5th Cir. 2011).] 4. Seller’s Right to Stop Delivery of Goods in a Bailee’s Possession If the buyer breaches the contract, the seller may, in appropriate cases, stop delivery of goods in a bailee’s possession, even goods in transit. Particularly, the seller may stop delivery of goods in the possession of a carrier or other bailee upon discovering that the buyer is insolvent, per § 2-702. Additionally, if the seller has a right to reclaim or withhold the goods for any reason other than the buyer’s insolvency, as when the buyer breaches the contract ( e.g. , repudiating the contract or omitting to make a payment due prior to delivery), then the seller may stop delivery of larger shipments of freight or express. A larger shipment is an entire planeload, carload, truckload, etc. The right to stop delivery, except for the buyer’s insolvency, is limited to larger shipments to minimize the burden on carriers if shipments of
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