The words "for a commercially reasonable time" must be read relatively to the obligation of good faith.
On April 16, 1970, plaintiff merchant was in the business of growing grain. Plaintiff agreed to sell to defendant, for delivery in October and December of 1970, 40,000 bushels of corn. On June 3, 1970, plaintiff informed defendant that he was not going to plant corn because the season had been too wet. He told defendant to arrange elsewhere to obtain the corn if he had obligated himself to deliver to any third party. The price for a bushel of corn on June 3, 1970, for future delivery, was $ 1.16. In September of 1970, defendant asked plaintiff about delivery of the corn and the former repeated that he would not be able to deliver. The scheduled delivery dates referred to passed with no corn delivered. Defendant then covered his obligation to his own vendee by purchasing 20,000 bushels at $ 1.35 per bushel and 20,000 bushels at $ 1.49 per bushel. The judgment from which plaintiff appeals awarded plaintiff as damages, the difference between the contract and the market prices on June 3, 1970, the day upon which defendant first advised that he would not deliver. Plaintiff appealed the measure of damages. The court affirmed, holding that plaintiff, a merchant within the definition of the Uniform Commercial Code, was entitled to damages that were equal to the amount of the difference between the minimum contract price and the price on the date defendant repudiated the contract.
Did the trial court err in its measurement of damages due to plaintiff?
During trial, the Court determined that plaintiff adhered to a usage of trade that permitted his customers to cancel the contract for a future delivery of grain by making known to him a desire to cancel and paying to him the difference between the contract and market price on the day of cancellation. The trial court specifically found, as a fact, that, in the context in which defendant's failure to disclose this information occurred, defendant failed to act in good faith. Imputing to defendant the consequences of plaintiff's having acted upon the information that plaintiff in good faith should have transmitted to him, plaintiff knew or should have known on June 3, 1970, the limit of damages he probably could recover. If he were obligated to deliver grain to a third party, he knew or should have known that unless he covered on June 3, 1970, his own capital would be at risk with respect to his obligation to his own vendee.