Amp Plus, Inc. v. Dmf, Inc.

Plain English (For Everyone)

If a business sells you something and you break the contract, they can't automatically claim they lost out on another sale. They have to prove they had the capacity to make both sales and would have profited from both. Simply reselling the item doesn't prove they lost a sale.

For Legal Practitioners

The Federal Circuit affirmed that a plaintiff seeking lost profits as a lost volume seller under UCC § 2-708(2) must affirmatively demonstrate they could and would have made the breached sale in addition to the resale. The court rejected the argument that resale alone proves lost volume status, emphasizing the need to show the resale would have occurred irrespective of the breach.

For Law Students

This case clarifies the lost volume seller doctrine under UCC § 2-708(2). A seller must prove they had the capacity and intent to make the breached sale and the resale sale independently. Reselling the goods does not automatically establish lost volume status; the seller must show they would have profited from both transactions.

Newsroom Summary

A company suing for lost profits after a contract breach must prove they could have completed both the original deal and a subsequent resale. The court ruled that simply reselling the item doesn't automatically mean the company lost out on the first sale.

Standard of Review

De novo review. The Federal Circuit reviews a district court's interpretation of contract law and its application of legal tests, such as the lost volume seller test, de novo.

Procedural Posture

The case reached the Federal Circuit on appeal from the United States District Court for the District of Delaware, which had ruled against Amp Plus, Inc. (Amp) on its claim for lost profits as a lost volume seller.

Burden of Proof

The burden of proof rests on the party claiming lost profits as a lost volume seller. Amp Plus, Inc. had to prove it met the criteria for lost volume seller status.

Legal Tests Applied

Statutory References

Key Legal Definitions

Rule Statements

To qualify as a lost volume seller, a seller must prove that it could and would have made the sale to the breaching buyer in addition to another sale.

The resale of goods to a third party does not mitigate damages if the seller would have made that sale regardless of the buyer's breach.

Remedies

The court affirmed the lower court's decision, denying Amp Plus, Inc. recovery of lost profits under the lost volume seller theory.

Scenario: You contracted to buy a custom-made piece of furniture, but later canceled the order. The furniture maker then sold the piece to someone else.

Your Rights: The furniture maker can only claim lost profits if they can prove they had the capacity to make your custom piece and another identical sale, and would have profited from both. Selling the piece to someone else doesn't automatically mean they lost profits from your canceled order.

What To Do: If you cancel a contract and the seller resells the item, ask them to prove they had the capacity to fulfill both your original order and the resale, and that they would have profited from both. If they cannot prove this, their claim for lost profits may be limited.

Is it legal for a seller to claim lost profits if they resell the goods after I breach a contract?

It depends. The seller can claim lost profits as a 'lost volume seller' only if they can prove they had the capacity to make your sale and the resale sale independently, and would have profited from both. If they cannot prove this, their damages may be limited to actual losses.

This applies under the Uniform Commercial Code (UCC) as adopted by most US states.

For Businesses that sell unique or custom goods

These businesses must maintain clear records and demonstrate their production capacity and sales strategies to prove they are lost volume sellers if a buyer breaches a contract. Simply reselling the goods after a breach will not suffice to recover lost profits.

For Buyers who breach a contract for goods

Buyers who breach a contract may have a stronger defense against claims for lost profits if the seller resells the goods. The seller must meet a higher burden of proof to show they were a lost volume seller and would have profited from both the original and resale transactions.

Q: What is Amp Plus, Inc. v. Dmf, Inc. about?

Amp Plus, Inc. v. Dmf, Inc. is a case decided by Federal Circuit on March 19, 2025.

Q: What court decided Amp Plus, Inc. v. Dmf, Inc.?

Amp Plus, Inc. v. Dmf, Inc. was decided by the Federal Circuit, which is part of the federal judiciary. This is a federal appellate court.

Q: When was Amp Plus, Inc. v. Dmf, Inc. decided?

Amp Plus, Inc. v. Dmf, Inc. was decided on March 19, 2025.

Q: What is the citation for Amp Plus, Inc. v. Dmf, Inc.?

The citation for Amp Plus, Inc. v. Dmf, Inc. is 131 F.4th 1320. Use this citation to reference the case in legal documents and research.

Q: What is a lost volume seller?

A lost volume seller is a business that, after a buyer breaches a contract, can prove they had the capacity and intent to make the sale to the breaching buyer in addition to reselling the goods to another buyer. The resale does not count as mitigation of damages.

Q: What is the difference between lost profits and actual damages for a seller?

Actual damages are typically the difference between the contract price and the market price or resale price. Lost profits, as a lost volume seller, represent the profit the seller would have made on the breached sale, assuming they could have made both sales.

Q: Is Amp Plus, Inc. v. Dmf, Inc. published?

Amp Plus, Inc. v. Dmf, Inc. is a published, precedential opinion. Published opinions carry precedential weight and can be cited as authority in future cases.

Q: What was the ruling in Amp Plus, Inc. v. Dmf, Inc.?

The court ruled in favor of the defendant in Amp Plus, Inc. v. Dmf, Inc.. Key holdings: The court held that to qualify as a "lost volume seller," a plaintiff must prove that it had the capacity to supply the demand of both the breaching buyer and the resale buyer, and that it would have satisfied the demand of both buyers absent the breach. The court found that Amp failed to present sufficient evidence to establish this dual capacity and intent.; The court held that the resale of the specialized electrical equipment to a third party did not automatically prove that Amp was a lost volume seller; rather, it was a failure to mitigate damages if the resale was made at a loss or if the resale buyer was one who would have purchased from Amp anyway.; The court held that lost profits are not recoverable when the resale of the goods to a third party effectively replaces the lost sale, thereby negating the "lost volume" aspect of the claim.; The court held that the burden of proof rests on the plaintiff to establish lost volume seller status, and Amp failed to meet this burden by not demonstrating that the resale was a "separate" transaction that would have occurred regardless of the breach.; The court affirmed the trial court's finding that Amp's damages were limited to the difference between the contract price and the resale price, plus incidental damages, because Amp did not prove it was a lost volume seller..

Q: Why is Amp Plus, Inc. v. Dmf, Inc. important?

Amp Plus, Inc. v. Dmf, Inc. has an impact score of 25/100, indicating limited broader impact. This decision clarifies the stringent evidentiary requirements for establishing "lost volume seller" status under the Uniform Commercial Code. Businesses seeking to recover lost profits in breach of contract cases involving the resale of goods must meticulously prove their capacity and intent to make both the original and the resale sale, otherwise, their recovery may be limited to actual damages from the breach.

Q: What precedent does Amp Plus, Inc. v. Dmf, Inc. set?

Amp Plus, Inc. v. Dmf, Inc. established the following key holdings: (1) The court held that to qualify as a "lost volume seller," a plaintiff must prove that it had the capacity to supply the demand of both the breaching buyer and the resale buyer, and that it would have satisfied the demand of both buyers absent the breach. The court found that Amp failed to present sufficient evidence to establish this dual capacity and intent. (2) The court held that the resale of the specialized electrical equipment to a third party did not automatically prove that Amp was a lost volume seller; rather, it was a failure to mitigate damages if the resale was made at a loss or if the resale buyer was one who would have purchased from Amp anyway. (3) The court held that lost profits are not recoverable when the resale of the goods to a third party effectively replaces the lost sale, thereby negating the "lost volume" aspect of the claim. (4) The court held that the burden of proof rests on the plaintiff to establish lost volume seller status, and Amp failed to meet this burden by not demonstrating that the resale was a "separate" transaction that would have occurred regardless of the breach. (5) The court affirmed the trial court's finding that Amp's damages were limited to the difference between the contract price and the resale price, plus incidental damages, because Amp did not prove it was a lost volume seller.

Q: What are the key holdings in Amp Plus, Inc. v. Dmf, Inc.?

1. The court held that to qualify as a "lost volume seller," a plaintiff must prove that it had the capacity to supply the demand of both the breaching buyer and the resale buyer, and that it would have satisfied the demand of both buyers absent the breach. The court found that Amp failed to present sufficient evidence to establish this dual capacity and intent. 2. The court held that the resale of the specialized electrical equipment to a third party did not automatically prove that Amp was a lost volume seller; rather, it was a failure to mitigate damages if the resale was made at a loss or if the resale buyer was one who would have purchased from Amp anyway. 3. The court held that lost profits are not recoverable when the resale of the goods to a third party effectively replaces the lost sale, thereby negating the "lost volume" aspect of the claim. 4. The court held that the burden of proof rests on the plaintiff to establish lost volume seller status, and Amp failed to meet this burden by not demonstrating that the resale was a "separate" transaction that would have occurred regardless of the breach. 5. The court affirmed the trial court's finding that Amp's damages were limited to the difference between the contract price and the resale price, plus incidental damages, because Amp did not prove it was a lost volume seller.

Q: What cases are related to Amp Plus, Inc. v. Dmf, Inc.?

Precedent cases cited or related to Amp Plus, Inc. v. Dmf, Inc.: N.Y. Gen. Oblig. Law § 2-715 (McKinney 2001); UCC § 2-706; UCC § 2-708(1); UCC § 2-708(2); Restatement (Second) of Contracts § 347.

Q: What did Amp Plus, Inc. have to prove to be considered a lost volume seller?

Amp Plus, Inc. had to prove that it could and would have made the sale to DMF, Inc. in addition to another sale. This means demonstrating they had the capacity to produce or acquire the goods and the intent to make both sales.

Q: Did Amp Plus, Inc. win their case for lost profits?

No, Amp Plus, Inc. did not win their case for lost profits as a lost volume seller. The Federal Circuit affirmed the lower court's decision, finding that Amp failed to meet the burden of proof for lost volume seller status.

Q: What is the UCC section relevant to lost profits for sellers?

Uniform Commercial Code (UCC) § 2-708(2) is relevant. It provides a remedy for sellers when a buyer breaches a contract and the standard measure of damages is inadequate, allowing for recovery of lost profits, including lost volume profits.

Q: What happens if a seller cannot prove they are a lost volume seller?

If a seller cannot prove they are a lost volume seller, their damages for a buyer's breach are typically limited to the difference between the contract price and the market price, or the contract price and the resale price, plus incidental damages, less expenses saved.

Q: Does the lost volume seller rule apply to services, or only goods?

The lost volume seller doctrine, as codified in UCC § 2-708(2), primarily applies to the sale of goods. Its application to services may vary depending on state law and specific contractual terms.

Q: What are incidental damages for a seller?

Incidental damages for a seller typically include commercially reasonable charges, expenses, or commissions incurred in stopping delivery, transporting and caring for goods after the buyer's breach, and in connection with the return or resale of the goods.

Q: What if the resale buyer paid less than the original contract price?

If the seller is a lost volume seller, the lower resale price does not necessarily reduce their lost profit claim from the original breached contract. They are entitled to the profit they would have made on the original sale.

Q: Can a seller recover lost profits if they didn't have the goods in stock when the contract was made?

Generally, yes, if the seller has a contract to acquire the goods and can demonstrate they would have acquired them and made both sales. The key is proving the capacity to acquire and sell, not necessarily having the goods on hand at the moment of contracting.

Q: What if the seller had to offer a discount to the second buyer?

If the seller is a lost volume seller, the fact that they offered a discount to the second buyer does not preclude them from recovering the full profit they would have made on the original contract. The discount is part of the economics of the second sale, not a failure to prove lost volume.

Q: What if the seller could only produce one of the items?

If the seller could only produce one item, they cannot be a lost volume seller. They would have had to choose between fulfilling the original contract or the resale contract, and the resale would then serve to mitigate damages for the breached contract.

Q: Does the lost volume seller rule apply to leases?

The UCC primarily governs the sale of goods. While principles of lost volume may be analogously applied in lease disputes, the specific legal framework and case law would differ and depend on the governing statutes for leases.

Q: How does Amp Plus, Inc. v. Dmf, Inc. affect me?

This decision clarifies the stringent evidentiary requirements for establishing "lost volume seller" status under the Uniform Commercial Code. Businesses seeking to recover lost profits in breach of contract cases involving the resale of goods must meticulously prove their capacity and intent to make both the original and the resale sale, otherwise, their recovery may be limited to actual damages from the breach. As a decision from a federal appellate court, its reach is national. This case is moderate in legal complexity to understand.

Q: If a seller resells my canceled order, does that automatically mean I don't owe them lost profits?

Not necessarily. The seller must prove they were a lost volume seller, meaning they could and would have made your sale and the resale sale independently. If they can prove this, they can still claim lost profits.

Q: How can a business best prepare to prove they are a lost volume seller?

Businesses should maintain detailed records of their production capacity, inventory levels, sales pipelines, and pricing strategies. They should also have clear policies and practices demonstrating an intent to make sales regardless of specific buyer behavior.

Q: What practical steps should a buyer take if they breach a contract and the seller resells the goods?

A buyer should request proof from the seller that they were a lost volume seller, including evidence of their capacity to make both sales and their intent to do so. This can help negotiate a fair settlement of damages.

Q: Are there any historical cases that established the lost volume seller concept?

The concept of lost volume damages has evolved through case law interpreting UCC § 2-708(2). Early cases like *Northeastern Gas Transmission Co. v. Sunray Energy, Inc.* and *Copylease Corp. v. Memorex Corp.* helped shape the understanding of this remedy.

Q: What was the docket number in Amp Plus, Inc. v. Dmf, Inc.?

The docket number for Amp Plus, Inc. v. Dmf, Inc. is 23-1997. This identifier is used to track the case through the court system.

Q: Can Amp Plus, Inc. v. Dmf, Inc. be appealed?

Potentially — decisions from federal appellate courts can be appealed to the Supreme Court of the United States via a petition for certiorari, though the Court accepts very few cases.

Q: What is the standard of review for contract interpretation in the Federal Circuit?

The Federal Circuit reviews a district court's interpretation of contract law and its application of legal tests, such as the lost volume seller test, de novo. This means they review the case anew without giving deference to the lower court's legal conclusions.

Q: What is the role of the district court in a lost volume seller case?

The district court initially hears the case, determines whether the seller has met the burden of proof for lost volume seller status, and calculates damages accordingly. The Federal Circuit then reviews the district court's legal conclusions de novo.