Cargill, Inc. v. Stafford

553 F.2d 1222 (10^th Cir. 1977)

Dawson, p. 61-62

Facts: Stafford repudiated his contract to sell wheat to Cargill prior to the date of performance. Cargill sued for breach.

Issue: On what date should damages be calculated?

Rule: The time the buyer “learned of the breach” ought to be taken to mean the “time of performance” in anticipatory repudiation cases. But a buyer may “cover” by “the reasonable purchase of substitute goods, without unreasonable delay”.

Analysis: Combining the two rules above, the court found that a buyer may urge performance “for a reasonable time” before having a duty to cover if possible. If Cargill had a valid reason for failing to cover, the damages should be based on the price on the date of performance. If Cargill did not have a valid reason, damages must be based on the date of repudiation.

Conclusion: The court remanded the case to determine if Cargill had a valid reason to fail to cover.

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