Okla. Stat. tit. 12A § 2-704

Current through Laws 2024, c. 378.

Section 2-704 - Seller's Right to Identify Goods to the Contract Notwithstanding Breach or to Salvage Unfinished Goods

(1) An aggrieved seller under the preceding section may

(a) identify to the contract conforming goods not already identified if at the time he learned of the breach they are in his possession or control;

(b) treat as the subject of resale goods which have demonstrably been intended for the particular contract even though those goods are unfinished.

(2) Where the goods are unfinished an aggrieved seller may in the exercise of reasonable commercial judgment for the purposes of avoiding loss and of effective realization either complete the manufacture and wholly identify the goods to the contract or cease manufacture and resell for scrap or salvage value or proceed in any other reasonable manner.

Okla. Stat. tit. 12A, § 2-704

Laws 1961, p. 96, § 2-704.

Oklahoma Code Comment

(1) Oklahoma has had no previous similar statute or decisions. This section gives the seller a remedy heretofore unknown. He may identify goods to the contract. It is important to note, however, that this is NOT for the purpose of passing title to the buyer, or to permit the seller to recover the contract price, but to permit him to sell them on open market to determine the amount of his damages under Section 2-706.

(2) Oklahoma has had no previous similar statute or decisions. This is a rewording of the Uniform Sales Act (not enacted by Oklahoma). At times, unfinished goods have reached the point of no return: the salvage value of the component parts is slight, and the cost of completion is less than the amount that the value will be increased by completion. In such cases the seller may in the exercise of reasonable commercial judgment complete the goods. In most cases, the completion will in fact minimize damages but a buyer who has in fact exercised reasonable judgment shall not be penalized, and shall not forfeit his rights to damages, if the completion in fact increases damages slightly. For illustration, if damages by salvage of unfinished goods would be $1.00 per unit, but the manufacturer decided to complete the goods, but upon completion the market price had declined and the damages were therefore $1.10 per unit, the seller may recover damages based upon the $1.10 measure. Note, however, that under this section the seller is not required to complete the goods, even though the damages would be minimized by so doing. He may cease production and resell for scrap or salvage