Friday, August 01, 2003

Measure of damages for anticipatory breach of natural gas sales contract

Yesterday, the Fourth Circuit in Hess Energy, Inc. v. Lightning Oil Co., Ltd., in an opinion by Judge Niemeyer joined by Judges Traxler and Wilkinson, held that the proper measure under Virginia's UCC for the anticipatory breach of a contract to sell natural gas, was the difference between the contract price and the time when the gas was to be delivered, rather than the difference between the contract price and the time when the buyer learned of the breach, applying Va. Code 8.2-713 and citing, among other things, Corbin on Contracts, which says in part "When the seller of goods has promised delivery at a future time and prior thereto repudiates his contract, the buyer is not required to go into the market at once and make another
contract for future delivery . . . ."

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