Date: Jan 30, 2014

On my last blog I answered the question “can a customer buy against a shipper’s account if the shipper fails to deliver or supply a load that has been negotiated?” Below is a further discussion on Buyer’s Damages, which was taken from the PACA Website.

Buyer’s Damages Where Goods Are Accepted

There are circumstances when a receiver will not want to reject damaged merchandise. The buyer who receives damaged product has the choice to reject it, or to accept it and handle it to establish its damages from the seller’s breach. The buyer cannot be required to return the product to the seller.

The general measure of damages for a breach of warranty as to accepted goods is the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted, unless special circumstances show damages of a different amount.

The value of accepted goods is best shown by the gross proceeds of a prompt and proper resale as evidenced by a proper accounting prepared by the ultimate consignee. A proper accounting should show a breakdown of sales of individual lots of produce with the number of containers sold at each price and the date on which sales of each lot took place.

The first and best method of ascertaining the value the goods would have had if they had been as warranted is to use the average price as shown by USDA Market News Service Reports. If applicable market prices are not available, the delivered (F.O.B. plus freight) value of the goods may be used as a measure of the value as warranted.

Buyer’s Damages Where Goods Are Rightfully Rejected

Where a buyer rightfully rejects, the buyer may either "cover" or recover damages for non-delivery.

"Cover" refers to the buyer’s purchase of goods in substitution for that due from the seller. When such purchase is made in good faith and without unreasonable delay, the buyer may recover the difference between the cost of the cover purchase and the contract price. The substitute goods need not be identical with those involved but commercially usable as reasonable substitutes under the circumstances of the particular case.

You can also access the article by clicking (Here)

The section in Education and Training, Unit 2: Rights and Responsibilities that further speaks to this issue “Buyer’s Damages Where Goods Are Accepted” may be read on the PACA website or above:

As always if you have any questions please don’t hesitate to pick up the phone and give me a call. My direct line is (949) 885-2269.

WG Staff Contact

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