What type of damages is a seller entitled to recover when a buyer breaches a purchase contract?

When a buyer breaches a purchase contract, the seller is entitled to recover damages that reflect their actual loss resulting from the breach. This typically includes both incidental damages and any difference in price between the contract price and the market price at the time of breach.

Incidental damages refer to costs incurred by the seller as a consequence of the breach, such as costs related to securing a replacement buyer or expenses to store the goods. The difference in price is important because if the market price at the time of breach is lower than the contract price, the seller suffers a loss.

By combining incidental damages with the price difference, the seller is fairly compensated for both the expenses directly associated with the breach and the loss incurred due to the buyer’s failure to fulfill the contract. This approach ensures that the seller is restored to the position they would have been in had the breach not occurred, in accordance with principles of contract law. Therefore, the combination of these damages provides a comprehensive remedy for the seller.