KGM Harvesting Company, the seller, had a contract to deliver 14 loads of lettuce each week to lettuce broker Fresh Network, the buyer, for 9 cents a pound. When the price of lettuce rose, KGM refused to deliver the lettuce it had promised to Fresh Network and instead sold the lettuce to others and made a profit of between $800,000 and $1,100,000. Fresh Network was angry over KGM’s breach and subsequently pursued two actions. First, Fresh Network refused to pay KGM $233,000, the amount it owed the supplier for lettuce KGM had already delivered. Second, Fresh Network purchased lettuce in the open market to fulfill its contractual obligation to Castellini/Club Chef. Fresh Network was forced to spend approximately $700,000 more for lettuce in the open market than it would have paid KGM. Castellini covered all but $70,000 of Fresh Network’s extra expense. Castellini passed the extra cost along to Club Chef, which passed at least part of this cost along to its fast-food customers. KGM sought the balance due on its outstanding invoices ($233,000). Fresh Network sought damages for the difference between the price it was forced to pay to buy replacement lettuce and the price it had established through its contract with KGM ($700,000). Who prevails under this issue of cover? [KGM Harvesting Company v. Fresh Network, 42 Cal. Rptr. 2d 286 (1995).]

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