Peace River Seed Co-operative, Ltd. v. Proseeds Mktg. - 355 Or. 44, 322 P.3d 531 (2014)

Rule:

Under the Uniform Commercial Code, the text, context, and legislative history of the sellers' remedies provisions under Or. Rev. Stat. §§ 71.3050(1) (2009), 72.7030, 72.7060(1), (6), and 72.7080(1) support a seller's right to recover either market price damages under Or. Rev. Stat. § 72.7080(1) or resale price damages under Or. Rev. Stat. § 72.7060, even if market price damages lead to a larger recovery.

Facts:

Peace River Seed Co-Operative (Peace River) is a Canadian company that buys grass seed from and sells grass seed for grass seed producers. Proseeds Marketing (Proseeds) is an Oregon corporation that purchases grass seed from various sources to resell to end users. The parties agreed to multiple contracts for defendant to purchase from plaintiff the total production of grass seed from a certain number of acres for a fixed price over a period of two years. The contracts incorporated the NORAMSEED Rules for the Trade of Seeds for Planting, which have been adopted by the American and Canadian Seed Trade Associations to govern the trade of seed. The NORAMSEED Rules provide that the UCC applies to transactions within the United States, and both parties have litigated this case under the UCC. Peace River cancelled the contract after Proseeds continued refusal to provide requests for shipping instructions. The trial court concluded that Proseeds had breached the contracts and that Peace River had been entitled to cancel the contracts and seek damages. Peace River argued at trial that it was entitled to recover its market price damages. The trial court determined that Peace River was entitled to the lesser of its market price damages or its resale price damages, and the court ultimately awarded Peace River its resale price damages. The Court of Appeals reversed and remanded, because the court determined that Peace River could recover its market price damages, even though it had resold some of the goods at issue. The Court of Appeals also reversed the trial court's decision not to award plaintiff its attorney fees under the parties' contracts, and remanded for the trial court to determine whether the parties intended the ambiguous contract term "charges for collection" to include attorney fees. 

Issue:

Can Peace River who has resold goods recover a greater amount of damages using the market price measure of damages than it would recover using the resale price measure of damages?

Answer:

Yes.

Conclusion:

The court held that Peace River was entitled to recover its market price damages because a seller may recover its market price damages under Or. Rev. Stat. § 72.7080(1) from a buyer that breaches contracts to purchase goods, even if those damages exceed the seller's resale price damages under Or. Rev. Stat. § 72.7060(1). Peace River was not entitled to recover its attorney fees under the parties' contracts because the seller did not demonstrate through text and context, including trade usage under Or. Rev. Stat. §§ 71.3030(3) (2009), 72.2020 or through evidence of the parties' intent, that the term "charges for collection" included attorney fees.