## Facts

- Trinidad Bean & Elevator Company (Trinidad), a commercial grain-elevator operator, entered a written agreement in April 1988 to buy 1,875 hundredweight of dried edible navy beans from farmer Elmo Frosh, with delivery due after completion of Frosh’s 1988 harvest.
- The contract form mistakenly listed two alternative payment options: (1) \$16.25 per hundredweight, payable in January 1989, or (2) \$16 per hundredweight, with payment split between December 1988 and harvest completion.
- After the contract reached Trinidad’s Denver office, Trinidad personnel noticed the mistake and prepared a replacement page limiting the payment term to a single option, but Frosh never signed a corrected contract page.
- Frosh testified that around May 1, 1988, he told Trinidad’s elevator manager to “tear up the contract,” which Trinidad treated as a repudiation.
- At the time of that asserted repudiation, the market price for navy beans was about the same as the contract price (roughly \$16 per hundredweight).
- As the season progressed, drought conditions caused navy bean prices to rise sharply—approximately doubling by late August/early September and increasing further by late September.
- Frosh later took additional steps consistent with cancellation, including returning to the elevator to ask if the contract had been torn up and sending a letter stating he felt the contract was void.
- Frosh did not deliver any beans when the harvest was completed in mid-October 1988.
- Trinidad did not purchase substitute beans promptly after the asserted repudiation; instead, it sued Frosh for damages for nondelivery under UCC Article 2.
- At trial, the court instructed the jury that a contract existed, described damages as the beans’ price at the time of performance (harvest) minus the contract price, and also instructed that Frosh could argue mitigation based on Trinidad’s failure to “cover” within a commercially reasonable time after repudiation.
- The jury returned a general verdict for Frosh.

## Issues

1. Under UCC § 2-713(1), is the buyer’s measure of damages for nondelivery/repudiation the market-price differential at the time the buyer learned of the breach (including learning of anticipatory repudiation), rather than at harvest?
2. Even though UCC § 2-712 makes cover optional, may a jury consider the buyer’s failure to cover within a commercially reasonable time as mitigation that limits recoverable damages?

## Decision

- The Nebraska Court of Appeals affirmed the judgment on the jury’s general verdict for Frosh.
- The court concluded that the challenged instructions, considered as a whole and in light of the evidence, did not warrant reversal.
- The evidence allowed the jury to find that Trinidad learned of Frosh’s repudiation at a time when the market price and contract price were essentially equal, permitting a finding of no § 2-713 market-differential damages.
- The court also approved allowing the jury to consider whether Trinidad’s delay in obtaining substitute beans after repudiation was commercially unreasonable and therefore limited any claimed loss as avoidable.

## Legal Principles

- UCC § 2-713(1) measures a buyer’s damages for nondelivery or repudiation as the difference between the market price at the time the buyer learned of the breach and the contract price, plus incidental and consequential damages, less expenses saved.
- For anticipatory repudiation, “the time when the buyer learned of the breach” can be the time the buyer learned of the repudiation, not necessarily the contract’s later performance date.
- UCC § 2-712 permits (but does not require) cover; a buyer may seek § 2-713 damages even without covering.
- Even when cover is optional, mitigation principles can limit recovery to losses caused by the seller’s breach rather than losses the buyer could have avoided through commercially reasonable action after learning of repudiation.
- A general defense verdict will be upheld where the evidence supports a finding that the buyer suffered no compensable market differential at the relevant time, or that claimed losses were avoidable due to an unreasonable delay in responding to repudiation.

## Conclusion

The court affirmed a defense verdict because the jury could reasonably find that Trinidad learned of Frosh’s repudiation when market and contract prices were the same, yielding no recoverable market-differential damages under UCC § 2-713(1), and could also consider Trinidad’s failure to obtain substitute beans within a commercially reasonable time as mitigation limiting any later price-based loss.


Trinidad Bean & Elevator Co. v. Frosh, 494 N.W.2d 347 (1992)