## Facts

- A coke supplier agreed to sell and deliver 36,621 tons of Connellsville coke to a furnace operator at $1.20 per ton in equal daily installments on working days during 1880, delivered on rail cars at the supplier’s works.
- The supplier delivered 3,765 tons, then notified the buyer on February 13, 1880, that he had rescinded the contract and would make no further deliveries.
- The buyer sued for breach in late February 1880.
- After the repudiation, the buyer entered a new forward contract on February 27, 1880, for delivery of the remaining 29,587 tons during the balance of 1880 at $4.00 per ton.
- The coke market later declined substantially, reaching about $1.30 per ton in May 1880.
- The trial court calculated damages by comparing the contract price to the market price on each day delivery was due, awarding $22,179.
- The buyer moved for a new trial, seeking damages measured by the difference between the original contract price and the higher price in the substitute forward contract.

## Issues

1. In an installment forward contract for goods repudiated after partial performance, is the buyer’s damages measure based on the price in a substitute forward contract or on market price at the time and place each installment should have been delivered?
2. Does an anticipatory repudiation permit measuring damages as of the buyer’s substitute contract date rather than the scheduled delivery dates?

## Decision

- The court denied the motion for a new trial.
- The buyer was not entitled to recover damages measured by the difference between the original contract price and the substitute forward contract price.
- The proper measure was the sum, across all missed installments, of the difference between the contract price and the market price at the place of delivery on each date delivery was due.

## Legal Principles

- For a seller’s failure to deliver goods, the ordinary damages measure is the difference between the contract price and the market value at the time and place delivery should have occurred.
- In an installment contract, damages are computed by reference to market prices on the several scheduled delivery dates for the missed installments.
- A buyer’s voluntary decision to enter a substitute forward contract does not, by itself, set the breaching seller’s damages; the seller’s liability is not increased by the buyer’s independent risk-allocation decision in a volatile market.
- An anticipatory repudiation does not necessarily shift the valuation date to the repudiation date or to the date of the buyer’s substitute contract; absent a contrary governing rule, damages may remain tied to the times performance was due.

## Conclusion

The court held that, despite the seller’s anticipatory repudiation, damages for non-delivery under a year-long installment contract were limited to contract price minus market price on each scheduled delivery date, and the buyer could not substitute the higher price of its replacement forward contract as the damages benchmark.


Missouri Furnace Co. v. Cochran, 8 F. 463 (C.C.W.D. Pa. 1881)