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The idea of lost volume seller arises from the Uniform Commercial Code § 2-708 (Seller's Damages for Non-acceptance or Repudiation). Subsection 1 allows a seller to recoup the difference between the market price of the item at resale and the contract price, plus damages. However, Subsection 2 specifies that if the seller is not adequately compensated through Subsection 1, than the seller is due the profits expected from the breached contract (including reasonable overhead), together with incidental damages, but "due credit for payments and proceeds of resale." However, the courts have established that in the case of a seller with an "unlimited supply" of goods, Subsection 2 is applicable for the seller, with a breached contract by a buyer, would have realized two sales rather than one. Thus, the seller is due the profits expected (including the reasonable overhead) and including any incidental damages. But, the courts have decided, that in such a case, the profit due the seller is not due any credit for resale because even if the same item is resold, it is not a true "resale," but just another sale of one of an unlimited supply of goods. This is a good case of how the judicial system is given significant leeway in the interpretation of a statute or code. Even in the world of contracts, where answers to problems are seemingly black and white, it is not always so. —Preceding unsigned comment added by 128.223.243.108 (talk)
