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2. Buyer’s Consequential Damages In Article 2, only the buyer may recover consequential damages. The seller cannot. Section 2- 715 sets forth two broad categories of consequential damages. The parties may generally limit the availability of consequential damages by a limitation of remedy or liquidated-damages provision. [ See U.C.C. § 2-715(2) (1951).] a. Consequential Damages Arising from the Buyer’s General or Particular Needs Per § 2-715(2)(a), consequential damages include loss arising from the buyer’s needs or requirements, be they general or particular. For the buyer to recover here, the seller must have reason to know of these needs or requirements at the time of contracting. That is, the loss must be reasonably foreseeable to the seller at the time of contracting. In the case of general needs or requirements, it will seldom be necessary for the buyer to notify the seller. In the case of particular needs or requirements, the seller must generally be notified. Further, it must be that the loss could not reasonably have been prevented by cover or some other means; in other words, the buyer must make reasonable effort to mitigate its consequential damages. Common examples of consequential damages here include lost business and profits. [U.C.C. § 2-715(2)(a), cmt. 3 (1951); 2 Hawkland UCC Series § 2- 715:3, Westlaw (database updated June 2021).] Note : If the buyer is in the business of reselling the goods, then the seller will normally be deemed to have reason to know that the buyer has a requirement to resell the goods. [U.C.C. § 2-715, cmt. 6 (1951).] Examples : (1) A broker of industrial machines entered a contract with a manufacturer. The contract provided that, in State A, the broker would sell only machines purchased from the manufacturer. Before contracting, the broker communicated to the manufacturer that it intended to sell the machines in State A at a profit. When the manufacturer breached the contract by failing to deliver the machines as scheduled, the broker lost profits it would have made selling the machines. The broker could not obtain replacement machines from another source, even with reasonable effort. Here, the broker is likely entitled to consequential damages consisting of its lost profits. [ Adapted from Restatement (Second) of Contracts § 351, illustration 4.] (2) A miller owned a mill that could not operate without a crank shaft, of which the miller had only one. When the crank shaft irreparably broke, the miller sent the shaft to a manufacturer to use as a model for a new shaft. Before contracting, the miller clearly communicated to the manufacturer that the mill could not operate without the shaft and that the miller would thus lose business and profit for each day that he lacked a usable
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