Case Citation
Legal Case Name

TERADYNE, INC. v. TELEDYNE INDUSTRIES, INC. Case Brief

United States Court of Appeals, First Circuit1982
676 F.2d 865

Why Top Law Students (And Those Aspiring to Be) Use LSD+ Briefs

Let's be real, law school is a marathon. Our exclusive Flash-to-Full case system is designed by Harvard Law School and MIT grads to match your pace: Quick summaries when you're slammed, detailed analysis when you need to go deep. Only LSD+ offers this kind of flexibility to genuinely fit your study flow.

Adaptive Case Views

Toggle between Flash, Standard, and Expanded. Get what you need, when you need it.

Exam-Ready IRAC Format

We deliver the precise structure professors look for in exam answers.

Complex Cases, Clarified

We break down dense legal reasoning into something digestible, helping you grasp core concepts.

Case Brief Summary & Legal Analysis

General Brief
4 min read

tl;dr: A buyer breached a contract for a complex machine. The seller, a “lost volume seller,” resold the unit. The court addressed how to calculate lost profits under UCC § 2-708(2), clarifying that direct labor costs for post-fabrication handling, not just materials, must be deducted from the contract price.

Legal Significance: This case clarifies the calculation of a “lost volume seller’s” damages under UCC § 2-708(2). It establishes that direct labor costs for employees like testers and installers must be deducted from the contract price to determine lost profit, distinguishing them from general overhead.

TERADYNE, INC. v. TELEDYNE INDUSTRIES, INC. Law School Study Guide

Use this case brief structure for your own legal analysis. Focus on the IRAC methodology to excel in law school exams and cold calls.

Case Facts & Court Holding

Key Facts & Case Background

Plaintiff Teradyne, Inc. contracted to sell a T-347A transistor test system to defendant Teledyne Industries, Inc. for $98,400. Teledyne repudiated the contract. Teradyne, a manufacturer with the capacity to produce more units than it could sell, was a “lost volume seller.” It subsequently resold the specific unit intended for Teledyne to another customer. Teradyne sued for lost profits under UCC § 2-708(2). In calculating damages, Teradyne deducted only the material and fabrication costs as listed in its internal inventory catalog, which was prepared for tax purposes and showed low valuations. Teradyne argued that other labor costs—for employees involved in testing, shipping, installation, and servicing—were fixed overhead and should not be deducted, as these costs would have been incurred regardless of the single Teledyne sale. Teledyne countered that these were variable, direct costs that should have been deducted to accurately reflect the profit lost on the specific sale. A master, affirmed by the district court, sided with Teradyne, awarding it $75,392 in damages based on its calculation.

Court Holding & Legal Precedent

Issue: In calculating a lost volume seller’s damages under UCC § 2-708(2), must direct labor costs for employees who handle the product post-fabrication, such as testers and installers, be deducted from the contract price as costs saved rather than being treated as part of “reasonable overhead”?

Yes. The court held that wages and fringe benefits for employees who Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupid

Master Every Case Faster

Unlock premium legal analysis that helps you quickly understand complex cases, designed by Harvard Law and MIT graduates. It's about working smarter, not just harder.

Start 14-Day Free Trial

Thousands of students are already saving time and gaining clarity. Why not you?

IRAC Legal Analysis

Premium Feature Unlock

Complete IRAC Analysis for Higher Grades

IRAC (Issue, Rule, Analysis, Conclusion) is the exact format professors want to see in your exam answers. Our exclusive Flash-to-Full briefs combine holding, analysis, and rule statements formatted to match what A+ students produce in exams. These structured briefs help reinforce the essential legal reasoning patterns expected in law school.

Legal Issue

In calculating a lost volume seller’s damages under UCC § 2-708(2), must direct labor costs for employees who handle the product post-fabrication, such as testers and installers, be deducted from the contract price as costs saved rather than being treated as part of “reasonable overhead”?

Conclusion

This case provides a crucial interpretation of UCC § 2-708(2), refining the Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo conse

Legal Rule

Under UCC § 2-708(2), a lost volume seller whose damages under § Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, s

Legal Analysis

The court first affirmed that UCC § 2-708(2) was the appropriate remedy. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur

Flash-to-Full Case Opinions

Flash Summary

  • For a “lost volume seller,” UCC § 2-708(2) damages are the
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt

Master Every Case Faster

Unlock premium legal analysis that helps you quickly understand complex cases, designed by Harvard Law and MIT graduates. It's about working smarter, not just harder.

Start 14-Day Free Trial

Thousands of students are already saving time and gaining clarity. Why not you?