KANSAS OFFICE of
  REVISOR of STATUTES

  

Home >> Statutes >> Back


Click to open printable format in new window.Printable Format
 | Next

84-2-706. Seller's resale including contract for resale. (1) Under the conditions stated in section 84-2-703 on seller's remedies, the seller may resell the goods concerned or the undelivered balance thereof. Where the resale is made in good faith and in a commercially reasonable manner the seller may recover the difference between the resale price and the contract price together with any incidental damages allowed under the provisions of this article (section 84-2-710), but less expenses saved in consequence of the buyer's breach.

(2) Except as otherwise provided in subsection (3) or unless otherwise agreed resale may be at public or private sale including sale by way of one or more contracts to sell or of identification to an existing contract of the seller. Sale may be as a unit or in parcels and at any time and place and on any terms but every aspect of the sale including the method, manner, time, place and terms must be commercially reasonable. The resale must be reasonably identified as referring to the broken contract, but it is not necessary that the goods be in existence or that any or all of them have been identified to the contract before the breach.

(3) Where the resale is at private sale the seller must give the buyer reasonable notification of his intention to resell.

(4) Where the resale is at public sale

(a) only identified goods can be sold except where there is a recognized market for a public sale of futures in goods of the kind; and

(b) it must be made at a usual place or market for public sale if one is reasonably available and except in the case of goods which are perishable or threaten to decline in value speedily the seller must give the buyer reasonable notice of the time and place of the resale; and

(c) if the goods are not to be within the view of those attending the sale the notification of sale must state the place where the goods are located and provide for their reasonable inspection by prospective bidders; and

(d) the seller may buy.

(5) A purchaser who buys in good faith at a resale takes the goods free of any rights of the original buyer even though the seller fails to comply with one or more of the requirements of this section.

(6) The seller is not accountable to the buyer for any profit made on any resale. A person in the position of a seller (section 84-2-707) or a buyer who has rightfully rejected or justifiably revoked acceptance must account for any excess over the amount of his security interest, as hereinafter defined (subsection (3) of section 84-2-711).

History: L. 1965, ch. 564, ยง 102; January 1, 1966.

KANSAS COMMENT, 1996

1. This section provides the preferred measure of damages in cases involving any breach or anticipatory repudiation by the buyer. It bases damages on the price at which the seller resells the goods, rather than relying on a nebulous market price. Under this section, the seller resells the goods on its own behalf, irrespective of whether title has passed, as a remedial right resulting from the buyer's breach. Under subsection (1), a proper resale entitles the seller to recover the contract price less the resale price, plus any incidental damages and less any expenses saved as a consequence of the breach.

2. A resale under this section must be carried out in a commercially reasonable manner. See Sharp Elec. Corp. v. Lodgistix, Inc., 802 F. Supp. 370 (D. Kan. 1992). The requirements for resale are set out in some detail in subsections (2), (3), and (4). Compare 84-9-504 (requirements for sale by foreclosing secured creditor). Under these provisions, the seller is given considerable flexibility. For private resales, the seller must (1) reasonably identify the resale as referring to the broken contract; (2) give the buyer reasonable notice of its intention to resell; and (3) conduct the sale in good faith and so that every aspect, including the time, place, and terms, is commercially reasonable. For public resales (i.e., auctions), the seller must (1) reasonably identify the resale as referring to the broken contract; (2) sell only identified goods unless there is a recognized market for public sales of futures in the goods; (3) sell at a usual place for public sale, if there is one; (4) give the buyer reasonable notice of the time and place of the resale; (5) display the goods or permit reasonable inspection of them; and (6) conduct the sale in good faith and so that every aspect, including the time, place, and terms, is commercially reasonable. If the buyer fails to comply with the requirements for resale, it must use the market damages measure of 84-2-708.

3. Subsection (5) protects purchasers of the resold goods against claims by the original buyer, even if the seller fails to follow the requirements of this section in conducting the resale. Subsection (6) continues the Code's policy of de-emphasizing title by providing that the seller is not accountable to the buyer for any profit made on resale.

4. Resale under this section is not mandatory; a seller may resort to market damages under 84-2-708. Even a seller that resells may be entitled to market damages under that section. See Wendling v. Puls, 227 K. 780, 610 P.2d 580 (1980). But see Sharp Elec. Corp. v. Lodgistix, Inc., supra (resale does not per se preclude market damages, but bars recovery on facts of case).

Law Review and Bar Journal References:

The restrictions in (4) are merely to insure action in good faith and in a commercially reasonable manner, Keith Hey, 7 W.L.J. 35, 44 (1967).

"Uniform Commercial Code: Aspects of a Commercially Reasonable Sale of Repossessed Property," Jon D. Graves, 19 W.L.J. 123, 134, 140 (1979).

CASE ANNOTATIONS

1. Under facts, seller entitled to recover difference between contract price and resale price. Sharp Electronics Corp. v. Lodgistix, inc., 802 F. Supp. 370, 371, 375, 376, 377, 379, 381 (1992).


 | Next

CURRENT SESSION
  A Summary of Special Sessions in Kansas
  Bill Brief for Senate Bill No. 1
  Bill Brief for House Bill No. 2001

LEGISLATIVE COORDINATING COUNCIL
  6/03/2024 Meeting Notice Agenda
  LCC Policies

REVISOR OF STATUTES
  Chapter 72 Statute Transfer List
  Kansas School Equity & Enhancement Act
  Gannon v. State
  Information for Special Session 2021
  General Info., Legal Analysis & Research
  2023 Amended & Repealed Statutes
  2022 Amended & Repealed Statutes
  2021 Amended & Repealed Statutes
  2020 Amended & repealed Statutes
  2019 Amended & Repealed Statutes

USEFUL LINKS
Session Laws

OTHER LEGISLATIVE SITES
Kansas Legislature
Administrative Services
Division of Post Audit
Research Department