Last Updated on December 11, 2022 by Anda Malescu
Can a seller sue a buyer for breach of contract in the United States? The simple answer is yes, a seller can sue a buyer for breach of contract just like a buyer can sue a seller in the case of a breach of contract. When a seller enters into a contract with a buyer expects the buyer to fulfill the terms of the contract in the same way the seller does.
However, in certain situations, buyers breach the contract, and while the reasons for breaching are many, the reality is that buyers breach a contract with the seller when they decide that the cost of performing the contract is higher than the cost he or she has to pay for breaching. In such situations, sellers can sue for breach of contract and collect damages pursuant to the state law governing the contract and the transaction. Contracts, generally and contracts for the sale of goods are governed by state law and the Uniform Commercial Code (UCC).
In the case of contracts for the sale of goods, the UCC provides that when a buyer wrongfully rejects or refuses to accept the goods, or fails to make a payment due on or before delivery of the goods (including check that cannot be processed, failure to furnish an agreed letter of credit, and others) or cancels the entire contract or part of it, then the seller is entitled to the following remedies for any breach of contract by the buyer with respect to the goods directly affected or the entire contract:
• Withhold delivery of such goods;
• Stop delivery by any carrier that has the goods in custody;
• Resell and recover damages;
• Recover damages for non-acceptance or in a proper case the price;
• Cancel
Further, at the time of breach of contract for the sale of goods by the buyer, a seller can identify as part of the contract any conforming finished goods in his or her possession or control, regardless of their resalability, and use reasonable judgment as to completing unfinished goods. Therefore, the primary remedy here, is that the goods are available for resale, and in the special case in which resale is not practicable, the seller is allowed to sue and recover for the price which would then be necessary to give the seller the value of his contract.
Under the Uniform Commercial Code Article 2 for contracts involving the sale of goods, in the case the buyer breaches the contract, the seller has the express power to complete manufacture or procurement of goods for the contract, unless the exercise of reasonable commercial judgement as to the facts as they appear at the time the seller learns of the breach makes it clear that such action will result in a material increase in damages. And the burden is on the buyer to show that the commercially unreasonable nature of the seller’s action in completing manufacture.
In the case of contracts for services or otherwise governed by the common law of the state, the seller can sue a buyer for breach of contract and state law applies. Generally, when the buyer breaches the contract, the seller is entitled to all remedies to put him or her in the same position he or she would have been had the buyer performed. The remedies available to the seller for breach of contract include money damages, liquidated damages, specific performance, rescission and restitution.
Can a seller sue a buyer for breach of contract? Yes, and it is recommended that a seller stops performing on the contract when a buyer breached and sues for remedies available either under the UCC or at common law.
Contact us, your business attorney in Miami, Florida USA to help you with your breach contract case and discuss when can a seller sue a buyer for breach of contract in the United States or schedule a consultation.
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