R.E. Davis Chemical Corp. v. Diasonics Inc.
United States Court of Appeals for the Seventh Circuit
826 F.2d 678 (1987)
R.E. Davis Chemical Corp. (Davis, plaintiff) breached its contract to buy medical equipment from Diasonics (defendant) after the physicians Davis was building a facility for backed out; Diasonics resold the same equipment to another buyer at the identical contract price. Davis sued to recover its $300,000 down payment (less a $500 UCC-permitted offset), and Diasonics conceded the down-payment return but sought a setoff for its own lost-profit damages as a 'lost volume seller'; the trial court limited Diasonics's damages to the difference between contract and resale price under UCC Section 2-706, denying lost-profit recovery under Section 2-708(2), and Diasonics appealed.
Whether a lost volume seller may recover lost-profit damages upon a buyer's breach if it would have been both possible and profitable for the seller to make the same sale to another purchaser in addition to the resale.