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Keywords

contractbreach of contracttortplaintiffdamagessummary judgmentcorporationrestitution

contracttortdamagessummary judgmentcorporation

Related Cases

R.E. Davis Chemical Corp. v. Diasonics, Inc., 826 F.2d 678, 4 UCC Rep.Serv.2d 369

Facts

Diasonics, a California corporation, entered into a contract with R.E. Davis Chemical Corp., an Illinois corporation, for the sale of medical diagnostic equipment. Davis paid a $300,000 deposit but later breached the contract by refusing to take delivery of the equipment after its own contract with two doctors was breached. Diasonics resold the equipment to a third party for the same price. Davis then sought restitution of its down payment, leading to Diasonics' counterclaim for lost profits and a third-party complaint against the doctors for tortious interference.

Diasonics, a California corporation, entered into a contract with R.E. Davis Chemical Corp., an Illinois corporation, for the sale of medical diagnostic equipment.

Issue

The main legal issues were whether Diasonics was entitled to recover lost profits as a lost volume seller under Illinois law and whether it could establish a claim for tortious interference against the doctors.

Rule

Under Illinois law, a lost volume seller can recover lost profits under UCC § 2-708(2) if the measure of damages under § 2-708(1) is inadequate. Additionally, to establish tortious interference, a plaintiff must show intentional inducement of a breach of contract.

Under Illinois law, a lost volume seller can recover lost profits under UCC § 2-708(2) if the measure of damages under § 2-708(1) is inadequate.

Analysis

The court analyzed the provisions of the UCC and determined that Diasonics, as a lost volume seller, could seek damages under § 2-708(2) for lost profits. The court noted that the district court's interpretation limiting Diasonics to damages under § 2-706 was incorrect. However, the court also found that Diasonics failed to allege sufficient facts to support its tortious interference claim against the doctors, as it did not demonstrate that the doctors intended to induce Davis to breach its contract with Diasonics.

The court analyzed the provisions of the UCC and determined that Diasonics, as a lost volume seller, could seek damages under § 2-708(2) for lost profits.

Conclusion

The appellate court affirmed the dismissal of Diasonics' third-party complaint against the doctors but reversed the grant of summary judgment in favor of Davis, remanding the case for further proceedings to determine Diasonics' damages under § 2-708(2).

The appellate court affirmed the dismissal of Diasonics' third-party complaint against the doctors but reversed the grant of summary judgment in favor of Davis.

Who won?

Diasonics, Inc. prevailed in part as the appellate court reversed the summary judgment in favor of Davis, allowing Diasonics to seek lost profits. However, it did not prevail on the tortious interference claim against the doctors.

Diasonics, Inc. prevailed in part as the appellate court reversed the summary judgment in favor of Davis.

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