National Controls, Inc. v. Commodore Business Machines, Inc.
California Court of Appeal, First District
209 Cal.Rptr. 636 (1985)
National Controls, Inc. (NCI) (plaintiff), an electronic-scale manufacturer, contracted to sell 900 scales to Commodore Business Machines (defendant) over four months, but Commodore repudiated after accepting only 50, prompting NCI to resell the remaining 850 to an existing customer, National Semiconductor; NCI presented evidence it had been operating at only 40 percent production capacity when manufacturing for Commodore. A jury found Commodore liable for breach and awarded NCI its full lost profits from the Commodore transaction, without offsetting the profits NCI separately earned reselling to National Semiconductor, and Commodore appealed.
Whether, where a buyer repudiates a contract for goods that the seller then resells to an existing customer that would have purchased such goods without regard to the other buyer's breach, the seller is entitled to recover profits lost from the first buyer's repudiation without any deduction for profits earned in the resale.