Paralegal Certification PrepContracts and Business LawMedium
A small business owner, 'Gourmet Goods,' contracts with a local farm, 'Harvest Haven,' to purchase 500 pounds of organic blueberries for their specialty jam production. The contract specifies delivery on July 1st. On June 25th, Harvest Haven informs Gourmet Goods that due to an unexpected blight, they will only be able to deliver 200 pounds of blueberries. Gourmet Goods promptly finds another supplier for the remaining 300 pounds at a higher price. What legal doctrine might allow Gourmet Goods to recover the additional costs incurred for the substitute blueberries?
- AFrustration of Purpose
- BCommercial Impracticability
- CCover
- DAccord and Satisfaction
Show answer & explanationAnswer & explanation
Correct answer: C. Cover
Gourmet Goods, as the buyer, is seeking to recover the additional costs incurred when the seller, Harvest Haven, failed to deliver the full quantity of goods. 'Cover' is a specific remedy under the Uniform Commercial Code (UCC) that allows a buyer to purchase substitute goods and recover the difference in price from the breaching seller.
Why the other options are wrong
- A. Frustration of Purpose is a defense that excuses performance when an unforeseen event destroys the purpose of the contract, not a buyer's remedy.
- B. Commercial Impracticability is a defense a seller might raise to excuse performance, not a buyer's remedy for breach.
- D. Accord and Satisfaction is a method of discharging a contract dispute, not a remedy for recovering costs due to a seller's breach.
Cover (UCC)
A buyer's remedy under the Uniform Commercial Code (UCC) that allows the buyer to purchase substitute goods from another source after a seller's breach and recover the difference between the contract price and the cost of the substitute goods.
- Applies when a seller breaches a contract for the sale of goods.
- Buyer must act in good faith and without unreasonable delay.
- Buyer can recover the difference between the cost of cover and the contract price, plus incidental and consequential damages, less expenses saved.
Memory trick: When the seller's goods don't show, the buyer can 'Cover' their flow.