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Breach of Contract Remedies Beyond the Contract Terms

On Behalf of | Mar 25, 2014 | Contracts

The remedies available for a breach of contract can sometimes be unclear. In some cases, they are fully stated in the contract and easy to understand. More likely, however, statutes unmentioned in the terms of the contract will provide a number of remedies. When you believe someone is attempting to prematurely cancel a contract, you should contact a local business law attorney to clarify which of these remedies may be available to you.

In a recent Oregon Supreme Court case, the court discussed some of the statutory remedies available to a seller that is forced to resell goods due to a cancelled contract. Peace River Seed Co-Op v. Proseeds Marketing, 2014 WL 1101467 (Or. Mar. 20, 2014), involved a contract under which a buyer was to buy the total production of grass seed from the seller for a fixed contract price. The buyer simply needed to tell the seller where to deliver the grass seeds. After they fixed the price for the seed, the market price of grass seeds dropped dramatically. In an apparent attempt to avoid receiving more grass seed at that higher fixed price, the buyer refused to provide a place to deliver the goods. Rather than waste that production and spend the production season without pay, the seller decided to resell the grass seed to a different buyer for a lower price.

When the seller sued the buyer to make up for the money lost, the question of the appropriate remedies proved to create the most debate. The court had to decide whether the remedy should be the difference between the contract price and the resale price, or whether it should be the difference between the contract price and the market price for seed? After analyzing a number of Oregon statutes related to the sale of goods, the Court decided that even if using the market price would lead to a larger award of damages than the resale price, the market price was permitted in this case.

Sometimes, cancelling a contract is a necessary business decision. When you’re on the other side, however, it’s important that you are aware of your rights. A business transactions attorney can help you examine both local law and the contract itself to determine your rights and remedies.