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2) Rule if Evidence of Market Price at Designated Time Is Not Readily Available If evidence of the market price at the designated time is not readily available, the court may utilize the price prevailing within any reasonable time before or after the designated time. [U.C.C. § 2-723(2) (1951).] Using Other Reasonable Methods to Determine Market Price or Measure Damages The rules in § 2-723 are not intended to preclude other, reasonable methods of calculating damages or determining market price if the case’s circumstances make it necessary. [U.C.C. § 2-723, cmt. (1951).] 8. Seller’s Lost Profits In appropriate cases, the seller may recover the profit she would have made had the buyer fully performed, together with incidental damages under § 2-710. Namely, the seller can recover lost profits plus incidental damages if the general damages formula under § 2-708 is inadequate to put the seller in as good a position as the buyer’s performance would have. If the seller recovers lost profits, there must be (1) due allowance for any costs the seller reasonably incurs and (2) due credit for any payments or resale proceeds to the seller. Lost profits are an alternative measure of damages to the usual damages formula in § 2-708 or the resale damages formula . [U.C.C. § 2-708(2) (1951); 2 Hawkland UCC Series § 2-708:2, Westlaw (database updated June 2021); General Damages Formula under § 2-708, Seller’s Damages on Proper Resale, supra .] a. Calculating Damages Based on Lost Profits There is something of a formula to calculate damages based on lost profits. Namely, lost profits equal (1) the contract price, minus (2) costs that the seller saved due to the breach, plus (3) incidental damages under § 2-710, plus (4) due allowance for costs reasonably incurred. Here, costs that the seller saved due to the breach generally include variable or direct costs—costs the seller would have incurred as a direct result of the contract, such as costs to procure or produce the specific goods or deliver them to the buyer ( e.g. , increased labor costs; costs for shipping, packing, or delivery; increased utility costs; etc.). There is no deduction for fixed or overhead costs, that is, general operating costs incurred regardless of output ( e.g. , rent, property taxes, interest on debt, etc.). The distinction between fixed and variable costs is theoretically clear, but distinguishing between them can be difficult in discrete cases. [ Valdisa, Inc. v. PDVSA Svc’s, Inc. , No. 08–21682–CV, 2010 WL 411019 (S.D. Fla. Jan. 29, 2010); Sure-Trip, Inc. v. Westinghouse Engineering , 47 F.3d 526 (2d Cir. 1995); 2 Hawkland UCC Series § 2-708:2, Westlaw (database updated June 2021); Seller’s Incidental Damages, infra .]
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