Florida Contract Remedies for Founders: What Really Happens When a Deal Breaks

If you’re building a company in Florida, you are living in contracts: sales agreements, supplier deals, SaaS terms,
licensing, manufacturing, and more. Most of the time, these documents sit quietly in the background while you run
the business. But when something breaks – a shipment doesn’t arrive, a buyer refuses to pay, or a key counterparty
goes sideways – the real question is:

“What can I actually do about it?”

Florida has adopted Article 2 of the Uniform Commercial Code (UCC) for contracts involving the
sale of goods (Chapter 672, Florida Statutes). For everything else, Florida courts rely heavily on the
Restatement (Second) of Contracts and general common-law principles.

This article walks through the major contract remedies that matter to founders, operators, and investors in Florida:

Buyer’s remedies under the UCC (when your vendor or supplier fails)
Seller’s remedies under the UCC (when your customers fail)
How risk of loss and insurance interact with damaged or destroyed goods
Equitable remedies: reformation, rescission, and cancellation
Declaratory judgment when the real issue is “what does this contract even mean?”

1. Why “Money Damages” Are Only the Starting Point

The baseline remedy in contract law is money damages: the court tries to put the nonbreaching party in the position
they would have been in if the contract had been properly performed.

In practice, founders usually care about a narrower set of questions:

Can I walk away from this deal?
Can I get my money back?
Can I enforce the deal and force the other side to perform?
Can I get compensated for the downstream damage to my business?

The UCC and Florida common law give you a toolkit that goes beyond “just sue for money.” Depending on the facts, you
may be able to cancel the contract, “cover” by getting substitute goods, seek specific performance, reclaim or
replevy goods, or ask a court to unwind or rewrite the agreement entirely.

2. Buyer’s Remedies Under the UCC (When Your Vendor Fails You)

Think of yourself as the buyer when your company purchases goods: inventory, components, hardware,
manufactured product runs, etc. When the seller fails to deliver, delivers late, or delivers junk, Florida’s
version of UCC Article 2 gives you structured options.

2.1. Failure to Tender or Deliver

If the seller does not tender conforming goods when they’re supposed to, you’re not stuck. You can:

2.1.1. Cancel the Contract and Recover Payments

If the breach is substantial – especially with installment contracts where each delivery is part of a long-term
relationship – you can:

Cancel the contract if the breach goes to the whole deal; and
Recover any payments you already made for the undelivered goods.

Cancellation is particularly important when you need to pivot quickly to another supplier without being dragged
backward by a broken contract.

2.1.2. Security Interest in Goods You Already Hold

If you rightfully reject goods or justifiably revoke acceptance, you gain a
security interest in those goods for:

The amount you’ve already paid; and
Reasonable expenses you incurred (inspection, transportation, storage, etc.).

That security interest lets you hold the goods and, if necessary, resell them in a commercially reasonable way to
recoup your losses – similar to what an aggrieved seller could do.

2.1.3. Damages: Market Price vs. Contract Price

Another core remedy: you can recover the difference between the
market price at the time and place of tender and the
contract price, plus incidental and consequential damages.

If the seller breaches early (anticipatory repudiation), the key time is when you learn of the breach. That matters
when the market is moving and the cost of replacement goods is fluctuating.

2.1.4. “Cover” – Buying Substitute Goods

In startup terms, “cover” is the “go get a replacement supplier now” remedy. You can:

Purchase reasonably substitute goods in good faith and without unreasonable delay; and
Recover the difference between the cover price and the
contract price, plus incidental and consequential damages.

Cover is often the most practical remedy for operators because you’re solving the business problem and preserving
legal claims at the same time.

2.1.5. Specific Performance for Unique Goods

If the goods are unique – or if you truly cannot reasonably cover on the market – you may be able
to seek specific performance, asking the court to order the seller to actually deliver the goods.

Think: custom tooling, specially fabricated components, or one-off assets where “just buy another one” is not
realistic.

2.1.6. Replevin: Physically Recovering the Goods

Florida’s UCC also allows a buyer to seek replevin – a court order to obtain the actual goods –
when:

You’ve made at least partial payment for identified goods; and
The seller becomes insolvent shortly after taking your payment, or the goods are for family, personal, or
household use and the seller repudiates or fails to deliver; or
You cannot reasonably “cover,” or circumstances make cover basically impossible.

In many founder deals, replevin comes up when you’re trying to get your hands on inventory or specialized equipment
that’s already been earmarked for you but is being held back by a distressed or dishonest counterparty.

2.2. Nonconforming Goods: Reject, Accept, or Something in Between

If the goods or the tender are nonconforming – defective, incomplete, late, or otherwise off-spec – you have
choices:

Accept all of the goods;
Reject all of the goods; or
Accept some commercial units and reject the rest.

You have a right to inspect first. If you’re required to pay before inspection (e.g., some COD or CIF terms),
payment doesn’t count as acceptance if there was no realistic opportunity to inspect.

2.2.1. Rejection

To make a valid rejection, you must:

Notify the seller of the rejection;
Do so within a reasonable time; and
Reject before acceptance.

After a rightful rejection:

You’re entitled to get back any payments you’ve made;
You must hold the goods for a reasonable time so the seller can retrieve them;
If you’re a merchant buyer, you may need to store, ship, or even resell them on the seller’s account in certain
circumstances, especially if the goods are perishable; and
You must give notice of breach in a reasonable time to preserve your damage claims.

2.2.2. Acceptance and Damages for Nonconforming Goods

You accept goods when you:

Expressly say you accept them;
Use them; or
Fail to reject within a reasonable time.

If you accept nonconforming goods, you can’t later reject them, but you can still pursue damages. The usual measure
is:

Value as warranted – Value as accepted = Damages

In real-world terms, this is often the cost to repair or replace the defective goods, plus
appropriate incidental and consequential damages.

2.2.3. Revocation of Acceptance

You can revoke acceptance (essentially a “late rejection”) when:

The nonconformity substantially impairs the value of the goods to you; and
You either:
- Accepted on the reasonable assumption the seller would cure, and they didn’t; or
- Accepted without discovering the defect, and your acceptance was reasonably induced by difficulty in
  discovering it or by the seller’s assurances.

Revocation must be timely and must occur before there is a substantial change in the goods not caused by the defect.
After revocation, your rights look a lot like they do after rightful rejection: you can seek a refund and damages
based on market/cover plus incidental and consequential losses.

2.2.4. Seller’s Right to Cure

On the other side, a seller may have a right to cure if:

The contract time for performance has not yet expired; or
The seller reasonably believed you would accept despite the nonconformity.

If the seller gives notice and then tenders conforming goods in time, the cure “fixes” the tender and you cannot
reject on the same basis.

3. Seller’s Remedies Under the UCC (When Your Customer Fails You)

Now flip the script: your company is the seller. You deliver goods, and your customer doesn’t pay,
wrongfully rejects, or goes dark. Florida’s UCC gives you several levers to pull.

3.1. Action for the Price

You can sue for the full contract price when:

The buyer has accepted the goods and failed to pay;
The goods are lost or damaged after risk of loss has passed to the buyer and the buyer won’t pay; or
The goods are identified to the contract, the buyer fails to pay, and you cannot resell them at a reasonable
price despite reasonable effort (or it’s clear that trying to resell would not work).

3.2. Reclaiming Goods

A seller may reclaim goods in two common scenarios:

3.2.1. Insolvent Buyer

If an insolvent buyer receives goods on credit, and you discover the insolvency, you can demand return of the goods
within 10 days of the buyer’s receipt. If the buyer misrepresented solvency in writing within
three months before delivery, the 10-day limit may not apply.

This right is subject to the rights of a buyer in the ordinary course of business or other
good-faith purchaser, and exercising it typically forecloses other remedies as to those goods.

3.2.2. Dishonored Check

If your customer pays with a check that bounces, you may reclaim the goods within a reasonable time, again subject
to any rights acquired by good-faith purchasers.

3.3. Stopping Goods in Transit

If the buyer breaches or becomes insolvent before delivery, you can stop the goods in transit. The details get
technical, but the headline is:

You may instruct the carrier to stop delivery; and
Your right to do so can depend on the shipment size and whether the buyer has already received title, documents
of title, or acknowledgment of rights from the carrier or bailee.

3.4. Wrongful Rejection by the Buyer

If the buyer wrongfully rejects or revokes acceptance without basis, you have several remedies:

Damages: contract price minus market price at the time and place for tender, plus incidental
damages, minus expenses saved;
Lost profits: if you are a lost-volume seller (e.g., you could have sold to both the breaching
buyer and the resale buyer), you can recover the profit you lost on the original deal; and
Resale: you may resell the goods in a commercially reasonable manner and sue for contract price
minus resale price plus incidental damages (with notice requirements for private resales).

In some situations, you may again be able to sue directly for the price if resale is impractical or impossible.

4. Risk of Loss and Insurable Interest

Founders running product businesses tend to care a lot about this practical question:
who eats the loss when something gets damaged or destroyed?

4.1. Risk of Loss When Nobody Has Breached

If the contract does not allocate risk and neither party has breached:

In a shipment contract (“FOB seller’s place of business”), risk passes to the buyer when the
seller delivers goods to the carrier with proper documentation and notice.
In a destination contract (“FOB buyer’s place of business”), risk passes when the goods are
tendered at the specified destination.
Where goods are held by a bailee (e.g., a warehouse), risk passes when the buyer receives a negotiable document
of title or the bailee acknowledges the buyer’s right.
In other situations, if the seller is a merchant, risk generally passes when the buyer takes physical
possession; if the seller is not a merchant, risk passes on tender of delivery.

4.2. Risk of Loss When There Is a Breach

If the seller delivers nonconforming goods, the risk stays with the seller until cure or
acceptance.
If the buyer breaches after goods are identified but before risk passes, risk can shift to the buyer to the
extent the seller lacks insurance coverage.

4.3. Destruction or Damage of Identified Goods

For specifically identified goods:

If they are totally destroyed through no fault before risk passes, both parties are excused – no one has to
perform, and no one is liable for breach.
If they are damaged but not destroyed, the buyer can walk away or accept at a reduced price with no further
claims.

4.4. Insurable Interest

Both sides may have an insurable interest in the same goods at different points:

The seller has an insurable interest as long as they retain title or a security interest.
The buyer obtains an insurable interest when the goods are identified to the
contract (not just when they are delivered).

That means there are windows where both parties could (and sometimes should) be carrying insurance on the same
goods.

5. Equitable Remedies: Reformation, Rescission, and Cancellation

Not every founder problem is best solved by a check from the other side. Sometimes the contract itself is the
problem – it doesn’t say what everyone thought it said, or it never should have been signed in the first place.

5.1. Reformation (Fixing the Document)

Reformation is a remedy where the court rewrites the contract to match the parties’ true agreement
when the written document doesn’t accurately reflect it because of:

Mutual mistake;
Unilateral mistake plus fraud or inequitable conduct; or
Similar formation defects.

This is useful where everyone actually agreed on a deal but the language, by error, says something materially
different and one party is trying to weaponize that mistake.

5.2. Rescission (Unwinding the Deal)

Rescission is the “unmaking” of the contract. It aims to restore both sides to their pre-contract
position. Grounds can include:

Mistake;
Fraud;
Duress or undue influence;
Lack of capacity; or
Substantial failure of consideration.

As a practical matter, if you want rescission, you generally must be prepared to
tender back what you received. You can’t keep the benefits of a contract you’re asking the court to
unwind.

5.3. Cancellation (UCC Sales Contracts)

Under the UCC, either party can cancel a sales contract when the other materially breaches.
Cancellation:

Ends the future performance obligations under the contract; but
Does not wipe out your right to monetary damages for the breach.

5.4. Limits on Equitable Remedies

Equitable remedies are off the table or limited when:

The property has already been transferred to a bona fide purchaser for value without notice of
the problem; or
The party seeking equity has unclean hands or has waited too long to act (laches).

6. Declaratory Judgment: When the Fight Is About “What Does This Contract Mean?”

Sometimes the biggest risk to a growing company is not a clear breach – it’s a disagreement about
what the contract actually requires.

In Florida, either party can file a declaratory judgment action (under Chapter 86, Florida
Statutes) to ask the court to interpret the contract and declare the parties’ rights and obligations.

This is useful when:

You want clarity before taking an action that might be treated as a breach;
You and the other party read the same clause very differently, and that difference matters strategically; or
There is a real, present controversy, but no one has yet pulled the trigger on a full-blown damages suit.

Declaratory relief is about avoiding stepping on a landmine by getting clarity before you move.

7. Practical Takeaways for Florida Founders and Operators

Don’t reflexively “walk away.” Whether you’re a buyer or seller, how you respond to a breach
(reject, accept, revoke, cover, resell) can dramatically expand or shrink your remedies.
Document your steps. Notices of breach, rejection, revocation, and demands to cure or reclaim
goods are often time-sensitive and must be done in a reasonable time and in a commercially reasonable way.
Think “equity,” not just “damages.” Sometimes the better move is to unwind or repair the contract
itself (reformation, rescission, cancellation) or to force or prevent performance (specific performance,
injunction) rather than just seek a check.
Use declaratory relief strategically. If you’re about to make a move that could be seen as a
breach, but the dispute is really about contract interpretation, a declaratory judgment action can be a proactive
tool.
Involve counsel early, not just at “litigation time.” Many of these remedies depend on the
sequence and quality of your communications and actions. Getting legal advice while the situation is developing
often preserves options that are impossible to recreate later.

Contracts are not just paperwork – they’re part of your operating system. Understanding how remedies work in
Florida, especially under the UCC, helps you make smarter decisions in real time when a deal starts to wobble.