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Hawkland UCC Series § 2-715:3, Westlaw (database updated June 2021). See also Manouchehri v. Heim , 941 P.2d 978 (N.M. Ct. App. 1997) (referring to Restatement (Second) of Contracts § 350 to define reasonably preventable).]
Examples : (1) A manufacturer contracted to buy, from a dealer, a machine for use in the manufacturer’s factory. The contract price was $10,000. Before the designated delivery date, the dealer repudiated the contract. Through reasonable effort, the manufacturer could have obtained a commercially reasonable replacement machine on the open market for $11,000 (the relevant prevailing market price), but it chose not to do so. The manufacturer lost $25,000 in profits because it had neither the machine nor a reasonable substitute. The manufacturer cannot recover the $25,000 in lost profits as consequential damages, because it could reasonably have prevented that loss through cover. But the manufacturer may recover the $1,000 difference between the $11,000 market price and the $10,000 contract price. Cover would not have prevented these damages. [ Adapted from Restatement (Second) of Contracts § 350, illustration 5.] (2) A broker contracted to purchase, from a manufacturer, turbine blades for resale to a nationalized foreign utility. The broker would incur stiff financial penalties for late delivery, a fact the broker earnestly conveyed to the manufacturer. These penalties applied even if conforming blades were ultimately delivered. The manufacturer provided some blades on time. However, due to unanticipated technical problems, the manufacturer could not timely provide the balance. When this fact became reasonably apparent, the broker had only one month to deliver the blades to the utility before incurring the penalty. The broker could have obtained replacement blades, but only at an exorbitant cost. Additionally, it would take five months to manufacture and deliver the replacement blades—too late to avert any penalty. Here, the broker may recover the penalties and his lost profits even if he does not attempt cover. He could not have averted those losses by cover or otherwise. [ Adapted from Omni Electromotive, Inc. v. R.A. Johnson, Inc. , 2006 WL 2590120 (N.J. Super. Ct. App. Div. Aug. 8, 2006).] 1) Time for Buyer to Mitigate Damages The buyer must generally make reasonable efforts to mitigate damages within a reasonable time after learning of the breach, assuming reasonable efforts would indeed mitigate damages. However, the buyer may generally wait a reasonable time for the seller to rectify the breach, such as by repairing defective goods or supplying conforming goods, especially if the seller provides assurances on which the buyer can reasonably rely. Time the buyer reasonably awaits a cure normally will not count against the buyer. In any case, if the buyer delays mitigation for more than a
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