UCC § 2-714
Buyer's Damages for Breach in Regard to Accepted Goods
(1) Where the buyer has accepted goods and given notification (subsection (3) of Section 2-607) he may recover as damages for any non-conformity of tender the loss resulting in the ordinary course of events from the seller’s breach as determined in any manner which is reasonable. (2) The measure of damages 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. (3) In a proper case any incidental and consequential damages under the next section may also be recovered.
Professor's notes
Section 2-714 governs the buyer's damages when the buyer has accepted goods but they are nonconforming. Subsection (1): the buyer may recover for any nonconformity in a manner that is reasonable. Subsection (2): the measure for breach of warranty is the difference at the time and place of acceptance between the value of the goods as accepted and the value they would have had if they had been as warranted, unless special circumstances show proximate damages of a different amount. Subsection (3): in appropriate cases the buyer may also recover incidental and consequential damages under § 2-715.
The doctrinal move is to give the buyer who has accepted nonconforming goods a damages remedy tied to the value differential, not to rejection or return. Once goods are accepted, the buyer cannot reject them; the remedy for post-acceptance nonconformity is § 2-714 damages plus possible revocation of acceptance under § 2-608. The value-as-warranted minus value-as-accepted formula is the warranty analog to the expectation measure: it restores the benefit of the bargain.
Paradigm: Buyer contracts for a machine warranted to produce 1,000 units per hour. The machine actually produces 600 units per hour. A machine producing 1,000 units/hour would be worth $50,000; a machine producing 600 units/hour is worth $30,000. Under § 2-714(2), buyer recovers $20,000 — the difference in value at the time and place of acceptance. If the defective machine caused consequential losses (spoiled inventory, lost production contracts), § 2-715 may add to that recovery.
Students applying § 2-714 often use cost-of-repair rather than value-differential as the baseline. The section says value differential; cost of repair is a permissible proxy only when it equals or approximates the value differential. Ask: is this different from the Peevyhouse question in Chapter 25? There, the cost-of-performance versus diminution-in-value choice is contested; § 2-714(2) resolves it in favor of value differential for warranty breach, though courts still have to apply the "special circumstances" escape valve in the subsection's second clause.
Connect to UCC § 2-715 (incidental and consequential damages), UCC § 2-608 (revocation of acceptance), UCC § 2-719 (contractual modification of remedy), R2d § 347 (expectation damages), and the Chapter 25 materials on Carlson v. General Motors and the Daughtrey v. Ashe / warranty-in-fact cases from Chapter 18.
Text
UCC § 2-714. Buyer’s Damages for Breach in Regard to Accepted Goods.
(1) Where the buyer has accepted goods and given notification (subsection (3) of Section 2-607) he may recover as damages for any non-conformity of tender the loss resulting in the ordinary course of events from the seller’s breach as determined in any manner which is reasonable.
(2) The measure of damages 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.
(3) In a proper case any incidental and consequential damages under the next section may also be recovered.
Source: UCC Article 2 (post-2022 amendments), as in the LawJ statutory corpus.