CHATLOS SYSTEMS, INC. V. NATIONAL CASH REGISTER CORP.
670 F.2d 1304 (3d Cir. 1982)
NATURE OF THE CASE: This was an appeal by NCR (D) for damages awarded damages to Chatlos
(P) under a breach of warranty action.
FACTS: P initiated this action in the Superior Court of New Jersey, alleging a breach of
warranty regarding an NCR 399/656 computer system it had acquired from D. The case was
removed under 28 U.S.C. 1441(a) to the United States District Court for the District of
New Jersey. The district court determined that D was liable for breach of warranty and
awarded $57,152.76 damages for breach of warranty and consequential damages in the amount of
$63,558.16. D appealed and this court affirmed the district court's findings of liability,
set aside the award of consequential damages, and remanded for a recalculation of damages
for breach of warranty. On remand, applying the 'benefit of the bargain' formula of
N.J.Stat.Ann. 12A:2-714(2) (Uniform Commercial Code 2-714(2)), the district court
determined the damages to be $201,826.50, to which it added an award of prejudgment
interest. D contends that the district court erred in failing to recognize the $46,020
contract price of the delivered NCR computer system as the fair market value of the goods as
warranted, and that the award of damages is without support in the evidence presented. D
also contests the award of prejudgment interest.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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