Damages

The following summary of a precedent-setting reparation decision issued under the Perishable Agricultural Commodities Act (PACA) is intended to help companies understand their rights and responsibilities under PACA. The names of the companies involved have been changed, but the key facts and core reasoning PACA used to reach its decision are presented.

Seller, Inc.
(Miami, Florida)

v.

Buyer, Inc.
(Dallas, Texas)
58 A.D. 1095,
decided November 1, 1999

Seller, Inc. (Seller) shipped five truckloads of mixed fruit and vegetables from Miami, FL to Buyer, Inc. (Buyer) in Dallas, TX. Upon arrival in Dallas, the Buyer accepted delivery of the product but paid only $1,319.00, leaving a balance due of $5,325.00. The Buyer alleged some of the product received did not comply with contract requirements. The Seller denied having breached the sales agreement.

A Buyer who accepts produce, PACA explained, becomes liable to the Seller for the agreed upon purchase price, less any damages resulting from a breach of contract by the Seller. The burden of proof to show a breach and damages rests with the Buyer. The Buyer, however, failed to submit any evidence to support a contract breach (e.g., inspection certificates, temperature tapes, trouble notice); consequently, PACA held that the Buyer was liable to the Seller for the unpaid balance of the agreed purchase price for the accepted five mixed truckloads, totaling $5,325.00

The Seller also submitted receipts showing it incurred $50.00 in bank charges for returned (insufficient funds) checks remitted by the Buyer, and PACA found that the Seller was entitled to reimbursement for the bank charges as consequential damages. The Seller was awarded payment of $5,375.00, plus interest.

These summaries are not issued by the USDA, nor the PACA Branch, and should not be mistaken for an official government statement or release.