Sales and Leases | 217
Shipment to the Buyer’s Designated Subpurchaser If the seller ships the goods to the buyer’s designated subpurchaser, and the subpurchaser receives the goods, then the seller’s right to stop delivery terminates as though the buyer herself had received the goods. This result follows even if the buyer never directly received the goods. [U.C.C. § 2-705, cmt. 2 (1951).] c. Notification Requirement to Stop Delivery To stop delivery, the seller must furnish notification as needed to enable the bailee to prevent delivery of the goods by reasonable diligence. [U.C.C. § 2-705(3)(a) (1951).] d. Bailee’s Obligation to Obey Stop Order Generally, once the seller properly notifies the bailee to stop delivery, and assuming the bailee is obligated to obey the stop order, the bailee must hold and deliver the goods according to the seller’s direction. If a negotiable document of title was issued for the goods, the bailee need not obey the stop notification until the document’s surrender. If the bailee has issued a nonnegotiable document of title for the goods, then it need obey only stop orders from the consignor. Of course, the bailee may obey the stop order even if it is not obligated to do so. If the bailee obeys the stop order, obligated or not, the seller is liable to the bailee if the bailee incurs any resulting charges or damages. The seller, in turn, may be able to recover these charges or damages from the buyer as the seller’s incidental damages for the buyer’s breach. [U.C.C. § 2-705(3), cmt. 5 (1951); 2 Hawkland UCC Series § 2-705:3, Westlaw (database updated June 2021).] e. Result of Seller’s Effective Stoppage of Delivery If the seller effectively stops delivery under § 2-705, then the seller’s rights in the goods are the same as if the seller had never made delivery. [U.C.C. § 2-705, cmt. 6 (1951).] 5. Resale by Seller One of the seller’s principal remedies, if not the principal remedy, is the right to resell goods under § 2-706. Namely, if the buyer breaches the contract, the seller may normally resell the affected goods or the undelivered balance of the goods. Assuming a proper resale, the seller may recover damages. Section 2-706 sets forth extensive rules to govern various aspects of the resale. Of course, sellers are not obligated to resell the goods or to invoke the resale damages formula if they do resell, but sellers often find it advantageous to do so. [U.C.C. § 2- 706 (1951); 2 Hawkland UCC Series § 2-706:1, Westlaw (database updated June 2021).]
a. Seller’s Damages on Proper Resale The seller must implement the resale in good faith and in a commercially reasonable
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