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upheld the trial court’s finding that cover here was commercially reasonable. [ See Red River Commodities, Inc. v. Eidsness , 459 N.W.2d 811 (N.D. 1990).]
Compare : An agricultural company contracted to buy a certain quantity of heifers from a farmer. At most, only one-third of these heifers would have been pregnant at the time of sale. The farmer breached the contract by failing to deliver the heifers, so the company sought substitute heifers elsewhere. The company bought 50 replacement heifers at a price substantially higher than the contract price. These substitute heifers were significantly heavier, on average, than the original contract heifers, and they were all pregnant; these factors contributed to the price differential. On similar facts, the Eighth Circuit held that the replacement heifers were not commercially reasonable substitutes for the original heifers. The replacement heifers placed the company in a substantially better position than the original heifers would have, in that the substitute heifers were of materially superior quality to the original heifers. [ See Martella v. Woods , 715 F.2d 410 (8th Cir. 1983).] c. Cover Damages If the buyer properly covers, she may recover from the seller (1) the difference between the cover costs and the contract price, plus (2) incidental or consequential damages owing to the seller’s breach, minus (3) expenses saved due to the seller’s breach. If the nonbreaching buyer has paid at least some of the purchase price, the buyer may, of course, recover that payment. [U.C.C. § 2-712(2) (1951); 2 Hawkland UCC Series § 2-712:1, Westlaw (database updated June 2021).] Examples : (1) A buyer contracted to purchase widgets from a seller for $15,000. Before the widgets were finished, the seller repudiated the contract. The buyer commercially reasonably obtained substitute widgets for $20,000. The buyer incurred $500 in costs to locate the replacement widgets; these costs qualified as incidental damages. However, because the seller never produced the widgets, the buyer saved the $100 in expenses it would have incurred to load the widgets onto its truck and bring them back to its warehouse. Here, the buyer’s cover damages total $5,400, consisting of: $20,000 (cost of replacement widgets) - $15,000 (contract price) - $100 (costs saved due to the breach) + $500 (incidental damages by way of expenses to find replacement widgets). [ See 2 Hawkland UCC Series § 2-712:1, Westlaw (database updated June 2021).] (2) A buyer contracted to purchase widgets from a seller for $15,000, having prepaid $5,000 of the purchase price. The buyer rightfully rejected the seller’s tender of delivery because the widgets were defective. The buyer commercially reasonably obtained
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