Chapter 72 of Oregon's Revised Statutes governs contract law throughout the state, including the requirements of contract formation and remedies for breach of contract. In Oregon, contract formation requires offer, acceptance, mutual assent and consideration. When a party is in breach of contract, the non-breaching party has specific remedies available. Non-breaching sellers have different remedies than non-breaching buyers.
Oregon Contract Law Overview
Oregon requires offer, acceptance and consideration in the formation of a contract. Contracts are legally enforceable bargained-for exchanges. In a bargained-for exchange, a promisor requires something from a promisee in return for a promise. What the promisor receives in return is the price of the promise; the price of the promise is known as "consideration." Breach of contract occurs when either a promisor or a promisee fails to perform his part of the bargain. The remedies for breach of contract depend on the type of breach involved. Oregon recognizes verbal contracts; however, contracts for the sale of goods worth $500 or more must be in writing, pursuant to Chapter 72 Section 72.2010(1) of Oregon's Revised Statutes.
Types of Remedies for Breach
Breach of contract occurs when a party fails to deliver his part of the exchange. Sometimes, expectancy damages are awarded to a non-breaching party. The purpose of awarding expectancy damages is to compensate an injured party so he is placed in the same position he would have been had the breaching party performed the contract. Non-breaching parties may also recover incidental and consequential damages. Incidental damages consist of expenses or charges incurred by a seller for having to stop delivery of goods. Consequential damages are reasonably foreseeable damages arising out of non-receipt of goods. According to Section 72.7150, buyers may recover both incidental and consequential damages.
Remedies for Buyers
Pursuant to Chapter 72 Section 72.7110(1)(a) and Section 72.7110(1)(b), a buyer has specific remedies if a seller fails to deliver promised goods or when a buyer rejects a seller's goods because the goods are nonconforming. Buyers can recover damages where a seller failed to deliver them. A buyer may also "cover," meaning he can seek similar goods from a another seller for roughly the same price. According to Chapter 72 Section 72.7110(2)(b), if goods are unique, so as to make it impossible to get them from any other seller, a buyer may seek specific performance from the seller with whom he contracted.
Remedies for Sellers
Pursuant to Chapter 72 Section 72.7030(1) of Oregon's Revised Statutes, sellers may refuse to deliver goods where a buyer has failed to pay before a delivery date. Sellers may also resell the goods to another buyer. Sellers have the right to recover damages where a buyer unjustifiably rejected goods; the damage amount is the difference between the market price and the contract price and any incidental damages incurred. Sellers may also cancel the entire contract, pursuant to Section 72.7030(6).
- OregonLaws.org: Section 72.2010: Formal Requirements: Statute of Frauds
- OregonLaws.org: Section 72.7110: Buyer’s Remedies in General
- OregonLaws.org: Section 72.7150: Buyer’s Incidental and Consequential Damages
- OregonLaws.org: Section 72.7130: Buyer’s Damages for Nondelivery or Repudiation
- OregonLaws.org: Section 72.7030: Seller’s Remedies in General