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AMI 2522 Buyer's Consequential Damages

Arkansas Supreme Court Committee On Jury Instructions-Civil

Ark. Model Jury Instr., Civil AMI 2522
Arkansas Model Jury Instructions-Civil
November 2021 Update
Arkansas Supreme Court Committee On Jury Instructions-Civil
Chapter 25. UCC Sales Contracts
AMI 2522 Buyer's Consequential Damages
Consequential damages resulting from a breach by (seller) include:
[any loss resulting from general or particular requirements and needs of which (seller) at the time of contracting had reason to know (and which could not reasonably be prevented by acquiring substitute goods or otherwise)]
[and][injury to person or property proximately caused by the breach. (In this regard you may consider [any of] the following elements of damage sustained which you find were proximately caused by the breach: (Insert the elements))].
Whether [this][any of these] element(s) has been proved by the evidence is for you to determine.
NOTE ON USE
When consequential damages are in issue in cases governed by Article 2 of the Uniform Commercial Code, use this instruction, not AMI 2443.
Use the alternative clause in the first bracketed element when there is an issue as to whether the claimed loss could reasonably have been prevented.
When the second element is submitted, use any pertinent elements of damages from AMI Chapter 22. For a measure of damages for the lost profits as consequential damages, see AMI 2443.
COMMENT
This instruction is based on Ark. Code Ann. § 4-2-715(2). In Tremco, Inc. v. Valley Aluminum Prods. Corp., 38 Ark. App. 143, 145, 831 S.W.2d 156, 158 (1992) the court stated that “[c]onsequential damages resulting from a seller's breach include any loss resulting from general or particular requirements and needs of which the seller at the time of contracting had reason to know and which could not reasonably be prevented by cover or otherwise.” See also, Smith v. Russ, 70 Ark. App. 23, 13 S.W.3d 920 (2000) (at the time of contracting, there was no evidence that seller had reason to know the particular needs of the buyer).
The tacit agreement rule for the recovery of consequential damages is inapplicable to cases under the Uniform Commercial Code. Ark. Code Ann. § 4-2-715, Comment 2; Morrow v. First Nat. Bank of Hot Springs, 261 Ark. 568, 572, 550 S.W.2d 429, 431 (1977) (“The tacit agreement test, to be sure, has been questioned and was rejected by the draftsmen of the Uniform Commercial Code.”); Lewis v. Mobil Oil Corp., 438 F.2d 500, 510 (8th Cir. 1971); H. Brill, Law Of Damages § 4.4 (5th ed.) (“Although the Uniform Commercial Code has rejected the tacit agreement doctrine, the Arkansas Supreme Court has continued to adhere to the doctrine in non-Code contractual cases.”); See also, Phillip M. Brick, Jr., Note, Agree to Disagree: The Inequity of Arkansas’s Tacit-Agreement Test as Seen in Deck House, Inc. v. Link, 62 Ark. L. Rev. 361, 375 (2009) (“Because Arkansas has adopted the UCC, it appears that ‘[t]he tacit agreement rule does not apply to contracts involving the sale of goods.’”) (quoting Coorstek, Inc. v. Elec. Melting Servs. Co., No. 4:06CV001726-JMM, 2008 WL 160620, at *6 (E.D. Ark., Jan. 15, 2008)).
The failure to cover can bar recovery of consequential damages that could reasonably have been prevented thereby. See Ark. Code Ann. § 4-2-715(2)(a). The doctrine of avoidable consequences, under which one cannot recover damages flowing from consequences that might reasonably have been avoided, requires only reasonable diligence and ordinary care, and does not require large expense. Lake Village Implement Co., Inc. v. Cox, 252 Ark. 224, 231, 478 S.W.2d 36, 42 (1972).
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