Lost volume seller is a legal term in the law of contracts. Such a seller is a special case in contract law. Ordinarily, a seller whose buyer breaches a contract and refuses to purchase the goods can recover from the breaching buyer only the difference between the contract price and the price for which the seller ultimately sells the goods to another buyer (plus, under some circumstances, incidental damages).
In the case of a lost volume seller, the seller goes on to sell the goods to someone else, usually for the same price. Under the usual measure of damages, such a seller would have no damages (the contract price less the sale price to the other customer is zero) and the breaching buyer would have no liability.
The objective of the law of contracts with respect to damages is to put the aggrieved party in as good a position as the aggrieved party would have been in if the breaching party had fully performed. The ordinary measure of damages fails to put the lost volume seller in as good a position as the lost volume seller would have been had the breaching buyer fully performed. The lost volume seller would have had the profit from two sales if the first buyer had performed instead of the profit from only one sale as a result of the first buyer’s breach. In such a case, certain law (including Article 2 of the Uniform Commercial Code in the United States) permits the aggrieved seller to recover the lost profit that the seller would have made had the buyer not breached (plus, under some circumstances, incidental damages).
Lost volume sellers tend to be those whose capacity to sell or to produce or acquire the subject goods is sufficiently large to meet the demands of all customers who seek to buy those goods. The term generally arises in the context of a breach of contract action in which the selling party seeks to recover against a breaching buyer who repudiates his or her promise to buy. For a lost volume seller, the failure to make one sale (i.e., due to the buyer's breach) reduces the seller's profits by the amount of profit that would accrue from that sale. (For legal definition and application of "lost volume sellers" see legal citations below. Typically the citation will give results in google.)
Famous quotes containing the words lost, volume and/or seller:
“Don’t matter how much money you got, there’s only two kinds of people: there’s saved people and there’s lost people.”
—Bob Dylan [Robert Allen Zimmerman] (b. 1941)
“Although volume upon volume is written to prove slavery a very good thing, we never hear of the man who wishes to take the good of it, by being a slave himself.”
—Abraham Lincoln (1809–1865)
“No more astounding relic of the subjection of women survives in western civilization than the status of the prostitute.... In connection with what other illegal vice is the seller alone penalized, and not the buyer?”
—Crystal Eastman (1881–1928)