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Example : A diamond distributor contracted to sell diamonds to a retailer for $1.5 million, payment due on delivery. The retailer took delivery of the diamonds, at which point the risk of loss on the diamonds passed to her. A few days later, a thief broke into the retailer’s store at night and stole the diamonds. The retailer refused to pay for the diamonds. Here, the distributor can likely maintain an action for the price. The retailer did not pay for the diamonds when payment came due. Within just a few days after the risk of loss passed to the retailer, the diamonds were lost to theft. [ Adapted from Lipschutz v. Gordon Jewelry Corp. , 373 F.Supp. 375 (S.D. Tex. 1974).] Recovering the Price as to Identified Goods That the Seller Cannot Resell for a Reasonable Price after Reasonable Effort Assuming the buyer has failed to pay all or some of the price when due, the seller may recover the price as to goods identified to the contract. However, it must be that the seller could not resell the goods at a reasonable price, even with reasonable effort—or else, the circumstances must indicate that any reasonable effort to resell the goods at a reasonable price would fail. For instance, this rule may apply in the case of goods specially manufactured or custom-made for the buyer, as these goods are often difficult or impracticable to resell. [U.C.C. § 2-709(1)(b) (1951); 2 Hawkland UCC Series § 2-709:1, Westlaw (database updated June 2021).] Example : A manufacturer produced display gondolas for a large retailer. Most of the gondolas, all identified to the contract, were 30 inches long, per the retailer’s specifications. Most similar stores used 48-inch gondolas. Thus, the 30-inch gondolas were difficult to market to possible buyers other than the retailer. When the retailer filed for bankruptcy, it owed the manufacturer roughly $1 million for manufactured and identified gondolas; the retailer rejected this obligation. The manufacturer could not resell most of the gondolas, even after contacting several of the retailer’s largest competitors, along with other manufacturers and distributors of fixtures. The manufacturer wound up scrapping the gondolas, though the scrapping costs exceeded the resulting revenue. Here, the manufacturer’s damages consist of the price, plus incidental damages. Because the gondolas were specially manufactured and atypical in the industry, the manufacturer could not resell them at a reasonable price, even after reasonable efforts. [ See In re KMart Corp. , No. 02 B 02474, 2005 WL 3132460 (Bankr. N.D. Ill. 2005).] b. Seller’s Responsibility for the Goods upon Suing for the Price Once the seller sues for the price, the seller must hold, for the buyer, any goods that are
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