Colorado § 4-2-714 - Buyer's damages for breach in regard to accepted goods.

§ 4-2-714. Buyer's damages for breach in regard to accepted goods.

(1) Where the buyer has accepted goods and given notification (subsection (3) of section 4-2-607), he may recover as damages for any nonconformity of tender the loss resulting in the ordinary course of events from the seller's breach as determined in any manner which is reasonable.

(2) The measure of damages for breach of warranty is the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted, unless special circumstances show proximate damages of a different amount.

(3) In a proper case, any incidental and consequential damages under section 4-2-715 may also be recovered.

Source: L. 65: p. 1340, § 1. C.R.S. 1963: § 155-2-714.

ANNOTATION

I. General Consideration.

II. Buyer May Recover.

III. Measure of Damages.

I. GENERAL CONSIDERATION.

Annotator's note. Since § 4-2-714 is similar to repealed §§ 121-1-69(1)(c), (6), and (7), C.R.S. 1963, §§ 121-1-69(1)(b), (6), and (7), CRS 53, and CSA, C. 143A, §§ 69(1)(b), (6), and (7)(uniform sales act), relevant cases construing those provisions have been included in the annotations to this section.

Applied in Duncan v. Schuster-Graham Homes, Inc., 194 Colo. 441, 578 P.2d 637 (1978); Western Conference Resorts, Inc. v. Pease, 668 P.2d 973 (Colo. App. 1983).

II. BUYER MAY RECOVER.

The acceptance and retention of goods by a purchaser does not defeat his action for damages for breach of warranty. Platte Valley Motor Co. v. Wagner, 130 Colo. 365, 278 P.2d 870 (1954).

This section permits acceptance and retention of the goods and maintenance of an action for breach of warranty. Comet Indus., Inc. v. Best Plastic Container Corp., 222 F. Supp. 723 (D. Colo. 1963).

Seller still liable for misrepresentation. Acceptance of goods does not relieve seller from liability for damages caused by misrepresentation where there is an express warranty. Schlottman v. Pressey, 195 F.2d 343 (10th Cir. 1952), rev'g 96 F. Supp. 979 (D. Colo. 1951).

When a buyer's claim is based exclusively upon an express warranty, the measure of damages is the loss directly and naturally resulting in the ordinary course of events from the breach of warranty as provided in subsection (1) of this section. Schlottman v. Pressey, 195 F.2d 343 (10th Cir. 1952).

Seller is bound to foresee injuries which follow a breach of contract in the usual course of events, and it is not necessary for a buyer to show specifically that the seller had knowledge of the facts. Thus when the goods are sold for consumption and use, the seller is then held to foresee and anticipate injuries which may result from breach of the contract of sale if the goods are put to their customary consumption and use; such injuries are said to be the natural result of the breach. Schlottman v. Pressey, 195 F.2d 343 (10th Cir. 1952).

A buyer is within his rights in asserting a recoupment remedy for those damages which are directly and naturally attributable to the deficiencies of the goods; other damages directly and naturally resulting from the breach of warranty can be claimed by way of counterclaim. Comet Indus., Inc. v. Best Plastic Container Corp., 222 F. Supp. 723 (D. Colo. 1963).

When the buyer has encumbered the title and is not able effectively to transfer the goods to the seller, then buyer's remedy is for damages pursuant to this section. Moeller Mfg., Inc. v. Mattis, 33 Colo. App. 300, 519 P.2d 1218 (1974).

Award of replacement cost of defective part insufficient. Where there is a "latent defect" which cannot be corrected simply by replacing a defective part and awarding the costs of replacing that part would not make the aggrieved party whole, an award of the entire value of the product damaged is appropriate. Gibbons v. Windish, Inc., 662 P.2d 500 (Colo. App. 1983).

Under "special circumstances", consequential damages may be recovered. Prutch v. Ford Motor Co., 40 Colo. App. 129, 574 P.2d 102 (1977), rev'd on other grounds, 618 P.2d 657 (Colo. 1980).

Where a buyer's use of a product which he knows is defective is foreseeable, the seller's liability for consequential damages is not cut off. Prutch v. Ford Motor Co., 40 Colo. App. 129, 574 P.2d 102 (1977), rev'd on other grounds, 618 P.2d 657 (Colo. 1980).

III. MEASURE OF DAMAGES.

The proper measure for breach of warranty of quality is the difference between the value of the goods at the time of delivery to the buyer and the value they would have had had they complied with the warranty. Comet Indus., Inc. v. Best Plastic Container Corp., 222 F. Supp. 723 (D. Colo. 1963); Converse v. Zinke, 635 P.2d 882 (Colo. 1981).

The basic measure of damages for breach of warranty under subsection (2) is the difference between the value of the goods accepted and the value of the goods as warranted. Prutch v. Ford Motor Co., 40 Colo. App. 129, 574 P.2d 102 (1977), rev'd on other grounds, 618 P.2d 657 (Colo. 1980).

Any duty buyers may have to mitigate their damages is fully discharged by repeated efforts to persuade the seller to repair the goods. Cherokee Inv. Co. v. Voiles, 166 Colo. 270, 443 P.2d 727 (1968).

Buyer may recover full obligation while retaining goods where no salvage value. The argument that buyers, by recovering their full obligation while still retaining inoperative goods, are placed in a better position than they contracted for is not supported where there is not any evidence indicating that the goods in their present condition have any salvage value. Cherokee Inv. Co. v. Voiles, 166 Colo. 270, 443 P.2d 727 (1968).

Section clearly permits approximations as to extent of damage, providing the fact of damage or lost profits is certain. Eccher v. Small Bus. Admin., 643 F.2d 1388 (10th Cir. 1981).

Court's determination of damages will not be disturbed on appeal unless clearly erroneous. Eccher v. Small Bus. Admin., 643 F.2d 1388 (10th Cir. 1981).

Applied in Pawa Box Sales Grp. v. Roofer Elecs. Tech. (Shanwei) Co., 754 F. Supp. 3d 1081 (D. Colo. 2024).