Teradyne, Inc. v. Teledyne Industries
United States Court of Appeals for the First Circuit
676 F.2d 865 (1982)
Teradyne (plaintiff) contracted to sell Teledyne (defendant) a transistor test system for $98,400 less a discount, but Teledyne cancelled the deal and offered to buy a cheaper substitute system instead; Teradyne refused that offer and sued for breach, eventually reselling the original system to another buyer. A special master calculated damages as Teradyne's lost profit minus costs saved due to the breach, arriving at $75,392, without crediting Teledyne for the substitute-system offer or treating Teradyne's employee wages as a saved cost, and the trial court adopted that report; Teledyne appealed.
Whether a seller who is able to resell goods after a buyer's breach is still entitled to recover its lost profit, minus the production and selling costs it saved because of the breach.