Huntington Beach School District v. Continental Information Systems Corp.
United States Court of Appeals for the Ninth Circuit
621 F.2d 353 (1980)
The Huntington Beach school district (school) (plaintiff) accepted Continental Information Systems' (CIS) (defendant) winning bid for a new computer, letting the runaway second-place bid (only about $12,400 higher) expire once CIS was expected to deliver; CIS then failed to deliver the computer by the promised date. The school opened a new round of bidding, ultimately paying about $59,425 more than the original CIS contract price for a replacement. The district court found the school acted reasonably and in good faith overall, but limited its damages to the smaller $12,400 gap, reasoning it would have been more reasonable to simply accept the expiring second-best bid before it lapsed; the court also separately awarded the school damages for three months of peripheral-equipment rental made necessary by CIS's non-delivery.
Whether a buyer who reasonably and in good faith chooses one method of covering a seller's non-delivery may recover the full difference between the contract price and the cover price, even if, viewed with hindsight, another cover method would have cost less.