The starting expectation may be wrong
A party coming from Uzbek law expects, on a breach, that "they still have to deliver". Article 330 of the Civil Code supports that: for defective performance, paying money does not release the debtor from performing in kind.
The American system starts from the opposite place. The main answer is money. Compelling delivery of the goods (§ 2-716) is the exception, not the rule.
All of what follows is Article 2 of the UCC, so it is for the sale of goods and it is the uniform text. If yours is a services contract, none of it is yours.
For the buyer: two routes
Route 1 — cover (§ 2-712)
If the seller does not deliver, the buyer may cover: in good faith and without unreasonable delay, make any reasonable purchase of substitute goods, or contract to buy them.
The buyer then recovers the difference between the cost of cover and the contract price, together with incidental or consequential damages, less expenses saved because of the breach.
Subsection (3) matters: failing to cover does not bar the buyer from any other remedy.
Route 2 — the market-price difference (§ 2-713)
Without cover, the measure is the difference between the market price at the time the buyer learned of the breach and the contract price, together with incidental and consequential damages, less expenses saved.
Where the market price is taken: at the place for tender; and, in cases of rejection after arrival or revocation of acceptance, at the place of arrival.
Note the difference in timing. Section 2-712 looks at the actual purchase; § 2-713 looks at when the buyer learned of the breach. On a rising market those two diverge substantially.
Where the goods were accepted (§ 2-714)
If the buyer accepted the goods, then found a non-conformity and gave notice, the measure 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.
For the seller: § 2-708
On the buyer's non-acceptance or repudiation, the measure is the difference between the market price at the time and place for tender and the unpaid contract price, together with incidental damages, less expenses saved.
Subsection (2) is the important addition. If that measure is inadequate to put the seller in as good a position as performance would have done, the measure is the profit (including reasonable overhead) the seller would have made from full performance, with due allowance for costs reasonably incurred and due credit for payments or resale proceeds.
This is the rule that handles the lost-volume seller: where the seller could supply any number of identical goods, reselling to someone else does not erase the loss — they would have made two sales, not one.
Getting the goods themselves: § 2-716
(1) Specific performance may be decreed where the goods are unique or in other proper circumstances.
"Other proper circumstances" is left open, and that is case law — none of which is cited here.
Subsection (3) adds another route: the buyer has a right of replevin for goods identified to the contract if after reasonable effort they cannot cover, or the circumstances reasonably indicate that such effort will be unavailing.
Compare: in Uzbekistan performance in kind is the default (art. 330); in the US it is the exception. This matters when drafting: if it is the goods you need, put in a clause identifying them as unique or expressly providing for specific performance.
An agreed sum fixed in advance: § 2-718
This section works fundamentally differently from an Uzbek neustoyka.
(1) Damages for breach by either party may be liquidated in the agreement but only at an amount which is reasonable in the light of the anticipated or actual harm caused by the breach, the difficulties of proof of loss, and the inconvenience or nonfeasibility of otherwise obtaining an adequate remedy. A term fixing unreasonably large liquidated damages is void as a penalty.
So there are two outcomes and nothing in between:
- the sum is reasonable — the clause works in full;
- the sum is unreasonably large — it disappears entirely, and you fall back on ordinary damages.
Uzbekistan is not like this. Under art. 326 a disproportionate neustoyka is reduced by the court and the claim survives. So the same protective instinct, drafted the same way, produces different results: a reduced figure in Uzbekistan, nothing in the US.
One further divergence: under art. 260 a creditor claiming a neustoyka need not prove loss. Section 2-718 ties reasonableness to anticipated or actual harm — so loss becomes a subject of argument anyway.
Limiting the remedies: § 2-719
The agreement may provide remedies in addition to or in substitution for those in the UCC — for instance limiting the buyer to return of the goods and repayment of the price, or to repair and replacement of non-conforming goods or parts.
Three limits:
- (1)(b) Resort to the stated remedy is optional unless it is expressly agreed to be exclusive. Without the word, the other remedies stay open;
- (2) Where circumstances cause an exclusive or limited remedy to fail of its essential purpose, the Act's remedies become available again. In practice: a repair-only clause stops working if the seller cannot repair;
- (3) Consequential damages may be limited or excluded unless the limitation is unconscionable. For consumer goods, limiting damages for injury to the person is prima facie unconscionable; where the loss is commercial, it is not.
When drafting
- Keep an agreed sum within "reasonable" and document how you calculated it. Section 2-718 can leave you with nothing.
- Write the words "exclusive remedy" — otherwise your limitation is merely an extra option (§ 2-719(1)(b)).
- Leave a fallback. Under § 2-719(2) a single remedy that fails brings the whole limitation down.
- If it is the goods you want, say so. Do not assume § 2-716.
- Cover quickly, and document it. Section 2-712 requires good faith and no unreasonable delay; hesitating puts you back into the market-price argument under § 2-713.