The market damages remedy as contained in Kan. Stat. Ann. § 84-2-713 should be followed as the preferred measure of damages. While application of the rule may not reflect the actual loss to a buyer, it encourages a more efficient market and discourages the breach of contracts.
Appellee seller had a contract to sell sunflower seeds to appellant cooperative. Appellee delivered a portion of the seeds, but when the market price of sunflower seeds doubled, he stopped delivering to appellant and sold the seeds to defendant buyer. Defendant paid appellee for approximately one-half of the seeds and appellant filed an action to collect the balance. Appellant intervened in the action, seeking damages for breach of contract. The trial court awarded damages to appellant based on its loss of expected profits. The intermediate appellate court reversed, holding that the difference between market price and contract price was the proper measure of damages pursuant to Kan. Stat. Ann. § 84-2-713 because it was more specific than the general damages provision of Kan. Stat. Ann. § 54-1-106. On appeal, the court affirmed.
Is the difference between market price and contract price the proper measure of damages?
The difference in market price and contract price was the correct method of measuring intervenor's damages. In addition to adopting the intermediate court's rationale, it held that damages computed under § 84-2-713 encouraged the honoring of contracts and market stability.