CMT Highway, LLC, an Iowa Limited Company v. Logan Contractors Supply, Inc., an Iowa Corporation

Summary

The Iowa Supreme Court reviews a dispute arising from a seller’s breach of contracts for road-construction materials and the buyer’s purchase of substitute goods. The court holds that a buyer exercising the Iowa Code section 554.2712 cover remedy is not required to accept the breaching seller’s higher-priced offer, while remaining subject to the common-law duty to mitigate damages. The court affirms the finding that the buyer’s purchases from other vendors at prevailing market prices were reasonable and remands for related judgment adjustments consistent with the court of appeals’ disposition.

Holdings

1. An aggrieved buyer is not required to deal with the breaching seller in exercising its right to cover under Iowa Code section 554.2712, even when the breaching seller's offer is the least costly alternative to the original agreement.
2. Substantial evidence supported the district court's finding that Logan Contractors reasonably mitigated its damages by rejecting CMT's unilateral price increase and purchasing substitute goods from other manufacturers.
3. Section 554.2712 does not require the buyer to select the cheapest substitute goods; it requires a reasonable purchase made in good faith and without unreasonable delay.

Questions Presented

1. Whether an aggrieved buyer exercising the cover remedy under Iowa Code section 554.2712 is required to accept the breaching seller's offer to provide the same goods at a higher price.
2. Whether substantial evidence supported the district court's finding that Logan Contractors reasonably mitigated its damages by purchasing substitute goods from other vendors at then-current market prices rather than accepting CMT's lower-priced offer.
3. Whether a buyer's cover purchases must be the cheapest available substitute goods under Iowa Code section 554.2712.

Disposition

reversed_and_remanded