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collector had the means to do so. [ Adapted from Simeone v. First Bank N.A. , 73 F.3d 184 (8th Cir. 1996).]
b. Consequential Damages as Including Personal Injury or Property Damage Proximately Caused by Breach of Warranty The buyer’s consequential damages include personal injury or property damages proximately caused by the seller’s breach of warranty. As discussed above, this issue is one where contracts and tort law intersect. If the injury follows use of goods but precedes discovery of the defect, proximate causation turns on whether it was reasonable for the buyer to use the goods without an inspection that would have revealed the defect. If so, then the defect proximately caused the injury. If not, or if the buyer in fact discovered the defect before using the goods, then proximate causation fails. The basic purpose of the proximate-cause requirement is to preclude recovery for injuries that are too remotely connected to the defect. Otherwise, proximate causation is a principle discussed more thoroughly in Quimbee’s Torts Outline. [U.C.C. § 2-715(2)(b), cmt. (1951); 2 Hawkland UCC Series § 2-715:3, Westlaw (database updated June 2021); Tort Law and the Implied Warranty of Merchantability, supra .] c. Distinguishing among Direct, Incidental, and Consequential Damages It is vital to distinguish among direct, incidental, and consequential damages, given the different rules applying to each type of damages. Broadly speaking, direct damages entail the aggrieved party’s loss of the value of the other party’s performance. Examples include the buyer’s cover damages or market-price damages (as well as the seller’s resale or market-price damages, or the seller’s action for the price). Incidental damages, again, compensate the aggrieved party for costs incurred in dealing with the more or less immediate aftermath of the breach, e.g. , the buyer’s expenses in dealing with nonconforming goods or obtaining cover. Consequential damages compensate for the loss of the usefulness of the breaching party’s performance (as well as personal injury and property damage from breach of warranty), for instance, the buyer’s inability to use the goods in its business. Of course, drawing these distinctions can be difficult, and the decisions are not always consistent. [ See 2 Hawkland UCC Series § 2-715:3, Westlaw (database updated June 2021); Buyer’s Remedies for Goods Not Accepted, Buyer’s Damages for Breach Regarding Accepted Goods, supra .] Example : A restauranteur contracted to buy a commercial-grade toaster from a dealer. Due to a defect in the wiring, the delivered toaster could not toast bread. This defect was a breach of warranty. Due to the defect, the restauranteur could not toast bread for her breakfast and brunch customers, which caused her to lose profits. The restauranteur’s direct
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