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HomeCommercial CodeDiv. 2Ch. 7§ 2723 Repudiation Damages Calculation

§ 2723 Repudiation Damages Calculation

Commercial Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 2723 Repudiation Damages Calculation

Key Takeaways

  • •If someone backs out of a deal early, the money they owe is based on the price of the goods when the other person found out about the backup.
  • •If the exact price at that time or place isn't easy to find, you can use a price from a close time or nearby place, but you have to adjust for things like shipping costs.
  • •You can't surprise the other side in court with a price from a different time or place—they have to know about it ahead of time.

Example

You agree to sell 100 bikes to a store for $200 each, but the store cancels the deal a month before delivery. At the time you found out, the bikes were selling for $250 each elsewhere.

The store has to pay you the difference between the original price ($200) and the market price when they canceled ($250), so $50 extra per bike.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 2723 Repudiation Damages Calculation

(1) If an action based on anticipatory repudiation comes to trial before the time for performance with respect to some or all of the goods, any damages based on market price (Section 2708 or Section 2713) shall be determined according to the price of such goods prevailing at the time when the aggrieved party learned of the repudiation. (2) If evidence of a price prevailing at the times or places described in this division is not readily available the price prevailing within any reasonable time before or after the time described or at any other place which in commercial judgment or under usage of trade would serve as a reasonable substitute for the one described may be used, making any proper allowance for the cost of transporting the goods to or from such other place. (3) Evidence of a relevant price prevailing at a time or place other than the one described in this division offered by one party is not admissible unless and until he has given the other party such notice as the court finds sufficient to prevent unfair surprise. (Enacted by Stats. 1963, Ch. 819.)

Last verified: January 23, 2026

Key Terms

anticipatory repudiationmarket priceaggrieved partyreasonable substituteunfair surprise

Related Statutes

  • § 2708 Seller Damages For Breach
  • § 2713 Seller Breach Damages Calculation
  • § 2701 Collateral Contract Remedies
  • § 2702 Seller Rights For Insolvent Buyers
  • § 2703 Seller Remedies For Breach

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Commercial Code. Section 2723.
View Official Source