## Facts

- Clyde Sprague, a Washington logger, purchased a U.S. Forest Service timber sale (“Flip Blowdown”) and was financially strained from a prior buyer’s default.
- Sumitomo Forestry Company, Ltd., a log exporter, negotiated to buy logs from Sprague; Sprague stressed he could not withstand another breach and needed completion in 1980 to meet other commitments.
- The parties signed a short written contract drafted by Sumitomo; at Sprague’s insistence it specified delivery in 1980.
- Sprague began harvesting and by early October 1980 had cut about 100,000 board feet to Sumitomo’s specifications.
- In mid-October 1980, Sumitomo unconditionally canceled the contract due to market changes.
- Sprague refused to sign a cancellation agreement and later resold the logs to mitigate losses, without giving Sumitomo notice of his intention to resell.
- A jury awarded Sprague damages including (1) the contract–resale price differential and (2) “incidental damages,” including $171,200 for 11 weeks of lost logging time that delayed performance of Sprague’s separate contract with Mt. Baker Plywood.

## Issues

1. Whether a seller who resells after the buyer’s breach may recover contract-based price differential damages despite failing to give the buyer notice of intent to resell under RCW 62A.2-706(3).
2. Whether lost logging-time damages tied to delay in a separate third-party contract are recoverable as the seller’s “incidental damages” under RCW 62A.2-710.

## Decision

- The Washington Supreme Court affirmed the judgment except for the lost logging-time component, which it held should have been excluded.
- The court held Sprague’s failure to satisfy RCW 62A.2-706’s resale-notice requirement barred recovery under that specific resale remedy, but did not bar recovery under RCW 62A.2-708(1).
- The court upheld the price-differential award on the theory that the resale price could be used as evidence of market price for RCW 62A.2-708(1) damages.
- The court held the 11-week lost logging-time award was consequential (tied to a separate contract) and therefore not recoverable as “incidental” damages under RCW 62A.2-710.

## Legal Principles

- U.C.C. seller remedies are generally cumulative; failure to meet the conditions of one remedy (e.g., resale under RCW 62A.2-706) does not foreclose an alternative measure authorized by statute (e.g., market-price damages under RCW 62A.2-708(1)).
- Under RCW 62A.2-708(1), a seller may recover the difference between the market price at the time and place for tender and the unpaid contract price, plus permitted incidental damages.
- A resale price may be admissible evidence of market price when supported by testimony that the resale price reflects the relevant market at the pertinent time.
- “Incidental damages” under RCW 62A.2-710 cover commercially reasonable expenses directly associated with handling the goods after breach (e.g., stopping delivery, care, custody, return, resale), not business-interruption losses attributable to the seller’s separate third-party obligations.
- Losses stemming from the seller’s special circumstances and third-party contracts are consequential in character and are not recoverable as incidental damages under RCW 62A.2-710.

## Conclusion

The court allowed a seller to recover market-price damages measured similarly to a contract–resale differential despite noncompliance with the statutory resale-notice requirement, but disallowed lost logging-time damages because they were consequential losses linked to a separate third-party contract rather than incidental expenses associated with the goods.


Sprague v. Sumitomo Forestry Co., 104 Wn.2d 751, 709 P.2d 1200 (Wash. 1985)