Tesoro Petroleum Corp. v. Holborn Oil Co., Ltd.
New York Supreme Court, New York County
547 N.Y.S.2d 1012 (1989)
Holborn (defendant) repudiated its contract to buy 10 million gallons of gasoline from Tesoro (plaintiff) at $1.30/gallon after market prices fell to $0.80/gallon, and Tesoro, having only enough gasoline for the one shipment, resold it to a substitute buyer for $1.10/gallon; Tesoro sued for breach and sought market-price damages of roughly $5 million, while Holborn argued for resale-price damages of roughly $2 million, and both parties moved for summary judgment on damages.
Whether, under the UCC, if a seller has resold goods intended for a breaching buyer in a substitute transaction, the proper measure of damages is the difference between the contract price and the resale price.