Supreme Court of Kansas,
51 Kan. 728, 840 P.2d 471 (1992)
Justice McFarland delivered opinion
Facts:
- April 1988, Tongish enters contract with Decatur Coop Assoc (Coop), agreeing to grow 160 acres of sunflower seeds to be purchased by Coop at $13 per hundredweight for large seeds and $8 per hundredweight for small seeds; crop to be delivered in increments of 1/3
- Coop had contract to deliver seeds to Bambino Bean & Seed, Inc., with only anticipated profit being the handling fee
- Oct. & Nov. Tongish delivers seeds
- Dispute in Jan. 1989 over amount of dockage fees charged against Tongish's seeds; resolved by Coop issuing addtl. check to Tongish reflecting a lower dockage charge
- Due to short crop, bad weather, and other factors, market price of sunflower seeds in Jan. 1989 was double that set forth in Tongish/Coop contract
- Jan. 1989, Tongish notifies Coop he would not deliver any more seeds
- Tongish goes on to sell seeds to Danny Thomas ($20 per...) recvng $5,153.13 more than the Coop contract price
- Thomas paid for 1/2 the seeds, Tongish files suit to collect balance, Thomas pays and is dismissed from action
- Coop intervenes in action, seeking damages for Tongish's breach of contract
- Damages awarded to Coop $455.51, the computed loss of handling charge / Coop appeals
- Ct of Appeals reversed district ct and remanded case to district ct to determine and award damages pursuant to K.S.A. 84-2-713
Whether or not should use UCC K.S.A. 84-1-106 or K.S.A. 84-2-173 when computing damages for breach of contract for nondelivery of contracted-for seeds (i.e., whether the buyer is entitled to its actual lost profit or the difference between the market price and the contract price).
Also, when two remedies (one specific, one general) are available, which option prevails?
Holding: Should use 84-2-713 when computing damages
When there are two conflicting statutes, one dealing generally and one specifically with a subject, the specific statute controls unless it appears the legislature intended to make the general act controlling. / Kansas Supreme Ct said to read both and try to "harmonize" the two.
Reasoning:
- Ct adopts portion of the analyses and rationale of the Ct of Appeals
- K.S.A. should prevail as the more specific statute according to statute rules of construction
- in situations where the buyer has made a resale contract for the goods, which the seller knows about, it may be appropriate to limit 2-713 damages to actual loss but does not want to reward seller for bad faith breach of contract
- may not reflect actual loss to a buyer, it encourages a more efficient market and discourages the breach of contracts
- damages computed under K.S.A. encourage the honoring of contracts and market stability
***SALES CONTRACTS: THE UNIFORM COMMERCIAL CODE***
§1-106. Remedies to be liberally administered
(1) The remedies provided by this Act shall be liberally administered to the end that the aggrieved party may be put in as good a position as if the other party had fully performed but neighter consequential or special nor penal damages may be had except as specifically provided in this Act or by other rule of law
§2-712. "Cover"; Buyer's procurement of substitute goods
§2-713. Buyer's damages for non-delivery or repudiation
(1) Subject to provisions of teh Article with respect to proof of market price (Section 2-723), the measure of damages for non-delivery or repudiation by the seller is the difference between the market price at the time when the buyer learned of the breach and the contract price together with any incidental and consequential damages provided in this Article (Section 2-715), but less expenses saved in consequence of the seller's breach.
(2) Market price is to be determined as of the place for the tender or, in cases of rejection after arrival or revocation of acceptance, as of the place of arrival.
§2-715. Buyer's incidental and consequential damages
§2-717. Deduction of damages from the price
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