## Facts

- David E. Dangerfield, a potato broker, contracted to buy from Dean Markel, a potato grower, 25,000 cwt. of “chipping” potatoes at $1.90 per cwt. during the 1972–1973 shipping season, with delivery in installments.
- In February 1973, Markel refused to deliver the remaining 15,055 cwt. as market prices were rising.
- To meet its obligations to potato processors, Dangerfield bought substitute potatoes on the open market from multiple sellers, generally obtaining only one delivery from each.
- The substitute purchases were made over about 38 days after the breach.
- The district court awarded Dangerfield $47,510.16 as cover damages (the aggregate amount paid above the contract price for substitutes), plus interest and costs.
- The court also allowed Markel a setoff of $3,840.68 (plus interest) for amounts Dangerfield withheld on potatoes already delivered.
- Dangerfield sought additional incidental and consequential damages for alleged financial hardship and harm to business reputation and growth, which the district court denied.

## Issues

1. Whether Dangerfield’s substitute purchases over a 38-day period qualified as “cover” made in good faith and without unreasonable delay under U.C.C. § 2-712, and whether the trial court properly calculated cover damages.
2. Whether Dangerfield proved entitlement to additional incidental and consequential damages under U.C.C. § 2-715 beyond the cover differential.

## Decision

- The North Dakota Supreme Court affirmed the district court’s award of $47,510.16 in cover damages.
- The court held that Dangerfield’s staged purchases in a rising market constituted reasonable cover made in good faith and without unreasonable delay, considering the installment delivery structure and the perishable nature of potatoes.
- The court affirmed the setoff of $3,840.68 (plus interest) in favor of Markel.
- The court rejected Dangerfield’s cross-appeal for additional incidental and consequential damages due to insufficient proof of causation and amount.

## Legal Principles

- Under U.C.C. § 2-712, a buyer may recover the difference between the cost of reasonable substitute purchases and the contract price if cover is made in good faith and without unreasonable delay.
- The reasonableness of cover depends on commercial context, including installment delivery terms, market availability, and practical constraints for perishable goods; cover need not be an immediate single purchase of the entire undelivered quantity.
- Under U.C.C. § 2-715, incidental and consequential damages require proof of causation and reasonably certain amounts; generalized claims of reputational harm or business loss are insufficient.
- Courts may deny consequential damages where the asserted losses are speculative or risk duplicating compensation already provided by cover damages.

## Conclusion

The court upheld cover damages based on Dangerfield’s commercially reasonable, good-faith substitute purchases made over time after Markel’s nondelivery, but denied additional incidental and consequential damages because Dangerfield did not prove specific, nonduplicative losses with adequate evidence.


Dangerfield v. Markel, 278 N.W.2d 364 (N.D. 1979)