Peace River Seed Co-Op v. Proseeds Marketing

An aggrieved seller who has resold goods can recover the difference between contract price and market price under ORS 72.7080(1), even when market price damages would exceed resale damages under ORS 72.7060.

Peace River Seed Co-Op (Peace River) first appealed the trial courts decision, arguing that the court erroneously accepted the prima facie case for market price damages, but proceeded to award resale price damages without legal basis, and further, that the court disallowed recovery of attorney fees. The Court of Appeals reversed, holding that Peace River could recover the market price damages, and reversed the trial court's decision on attorney fees. Peace River and Proseeds Marketing (Proseeds) entered contracts in which Proseeds bought, from Peace River, the total production of grass seed for for a fixed price over two years. Proseeds was required under these contracts to provide shipping and delivery instruction to Peace River, which it declined to do when the price of grass seed dropped dramatically. As a result, Peace River canceled the contracts and attempted to mitigate damages by reselling the grass seed for a lower price. These contracts incorporated the NORAMSEED Rule, which provided that the UCC apply to all domestic transactions, and not allow the award of attorney fees. The Court agreed with Peace River, holding that Peace River was entitled to market price damages, even if they exceeded resale price damages. A seller who resells goods is not precluded from using market price, even if that would lead to a larger recovery. Reversed and remanded for damages; denial of attorney fees affirmed.