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Sect. 49.

Comparison
between
Scottish and
English law.

Price payable on a fixed

day.

Interest on the price in Scotland.

English law as to interest.

passed, and where the price is not payable upon a day certain irrespective of delivery, the seller is restricted to a claim of damages.

The difference between the English law as embodied in the Act and the former law of Scotland, is to a certain extent lessened by the fact that in Scotland, it was necessary to an action for the price of goods to be manufactured or acquired that the goods themselves should be ready for delivery, while in England, the goods in such circumstances were, and are, often appropriated to the buyer so as to pass the property and permit of an action for the price (Sect. 18, Rule 5). In England, however, the buyer's consent, express or implied, is necessary to the appropriation, while in Scotland the seller could sue for the price without such consent. Under sub-section (2) the seller can sue for the price even although the property has not passed, if it is part of the contract that the price be paid on a fixed day. A vendor may well say to a buyer, 'I want the money on such a day, and I will not sell unless you agree to give me the money on that day, whether you are ready or not to accept the goods'; and if these terms be accepted, the vendor may recover the whole price of goods the property of which remains vested in himself. In such a case the buyer would be driven to his cross action, if the vendor after receiving the price should refuse delivery of the goods." 2

Sub-section (3) reserves the seller's right in Scotland to recover interest on the price, but Sect. 54, taken in connection with the reservation of the rules of the common law contained in Sect. 61 (2), practically does the same thing. The sub-section therefore seems unnecessary.

In England, interest is not recoverable on the price of goods sold, but if the contract is in writing, and if the price is a debt or sum certain payable at a certain

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1 Where the buyer refused to take delivery, the fact that the seller afterwards pledged the goods to a third party in security of a temporary advance, was held no bar to an action at his instance for the price, he being in a position to redeem them and to give delivery at any time-Athya and Co. v. Rowell and Co. (1856), 18 D. 1299, per Lord Justice-Clerk Hope at p. 1300. 2 Benjamin, p. 761. See Dunlop v. Grote (1845), 2 C. & K. 153.

3 Mayne on Damages, 5th ed. p. 162.

time," interest may be allowed under 3 & 4 William Sect. 49. IV. c. 42, Sect. 28. In Duncombe v. Brighton Club1 (1875) the price was payable " one third in cash, and bills at six and twelve months for balance." It was held by a majority of the Court that " one third in cash" was a sufficient specification under the Act to allow of interest from the date of the goods being delivered. Lord Blackburn dissented from this judgment, but, on the general question, he said: "I confess that it seems to me in reason and common sense, that if the money for goods sold and delivered is not paid at the proper time, it should be paid with interest, but the rule at common law did not give interest in such a case." 2

interest in Scotland.

In Scotland, the seller can always sue for the price and Rules as to interest from the date when the money should have been paid. This proceeds on implied agreement on the part of the person in default to pay for the use of the money held by him in breach of his contract.3 Among the Scottish rules as to the commencement of interest, the following are stated by Bell :-" (1) Where there is an express agreement concerning the commencement of interest, it rules the case. (2) Otherwise, in the general case, interest runs from the stipulated day of payment. (3) Where the day of payment is optional, interest runs only from the day ascertained by the act declaring the option. . . . (8) Interest on merchants' accounts of furnishings begins on the expiration of the accustomed credit; or if there be no special custom to regulate it, from the date of citation when the money should have been paid." 4

DAMAGES FOR

50.-(1.) Where the buyer wrongfully neglects or Sect. 50. refuses to accept and pay may maintain an action

for non-acceptance.

1 L. R. 10 Q.B. 371.

for the goods, the seller
(a)
against him for damages

2 L.R. 10 Q. B. at p. 374.

3 M. P. Brown on Sale, p. 348; Bell's Prin., Sect. 32; Bell's Com. i. 692;

2nd Report of Mer. Law Com. 1855, p. 47.

4 Bell's Com. i. 694.

NON-ACCEPT

ANCE.

Sect. 50.

(2.) The measure of damages is the estimated loss directly and naturally resulting, in the ordinary course of events, from the buyer's breach of con

tract.

(3.) Where there is an available market for the goods in question the measure of damages is primâ facie to be ascertained by the difference between the contract price and the market or current price at the time or times when the goods ought to have been accepted, or, if no time was fixed for acceptance, then at the time of the refusal to accept.

NOTES.

(a)" Accept and pay." See Sect. 27 note (b), ante, p. 129. The general duties of the buyer in performance of the contract are contained in Part III. of the Act, Sects. 27 to 37 inclusive. (b) "Action" includes in Scotland condescendence and claim and compensation [Sect. 62 (1)]. See also Sect. 57.

(c) "Measure of damages." See Coм., infra, p. 239. (d) "Available market." See remarks of James, L. J., in Dunkirk Hill Colliery Co. v. Lever 1 (1878).

(e) Time or times fixed for acceptance. As to instalment deliveries see Sect. 31 ante, p. 147. The measure of damages will be fixed as at the date when the goods or instalments thereof are deliverable, not as at the date of a refusal by the buyer to accept, if these respective dates do not correspond. But see COM., Sect. 51 post, p. 248.

(f) Difference between contract price and market price. See COм., infra, p. 239.

Seller's rights

of action.

COMMENTARY.

Where the property has passed, the seller has the option of an action for the price under Sect. 49, or an action for damages under this section. Where the property has not

19 Ch. Div. 20 at p. 25.

passed, the seller is confined to an action of damages, except Sect. 50. in the special case provided for in Sect. 49 (2).

Sub-section (2) is practically the first part of the wellknown rule laid down in Hadley v. Baxendale1 (1854), where Alderson, B., said: "Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered as arising naturally, i.e. according to the usual course of things, from such breach of contract itself." 2

The sub-section is the rule as to general damages, but it has often been departed from in circumstances giving rise to what are known in England as special damages. such special damages is reserved by Sect. 54.8

Action for

Rule of Hadley

v. Baxendale

(first part).

General and special damages.

Scottish rule

as to damages.

Higgins.

In Scotland, general damages have not hitherto been distinguished from special damages. The latter phrase covers, at least in part, the Scottish rule, which is said to have been that all the circumstances of the case must be considered.* The alleged rule in the law of Scotland went further, and on the authority of Dunlop v. Higgins5 (1848) Dunlop v. it was laid down that the damage must be estimated without reference to the price of the article at any particular time. This is clearly inconsistent with Sub-sect. (3) and with the provisions of Sects. 51 (3) and 53 (3). But even before this Act, the rule of Dunlop v. Higgins had ceased to be of universal application, and in Warin and Craven v. Forrester (1877) the English principle was adopted by the Court of Session and sustained by the House of Lords.

Its authority

ignored in

Scotland.

There may be damages in certain cases of intended sale, Damages in

1 9 Ex. 341.

29 Ex. at p. 354. The second part of the rule covers the case of special damages, and is quoted Sect. 54, note (b) post, p. 256. The whole rule is in substance the rule of the Roman law. See M. P. Brown on Sale, p. 217.

As to special damages see Hydraulic Engineering Co. v. M'Haffie (1878), 4 Q.B.D. 670; Hammond v. Bussey (1887), 20 Q.B.D. 79. See also Sect. 54, note (b) post, p. 256.

4 See Watt v. Mitchell (1839), 1 D. 1157, strongly approved by the House of Lords in Dunlop v. Higgins (1848), 6 Bell's App. Cas. 195, and supported by Lord President M'Neill in Baird v. Reilly (1856), 18 D. 734 at p. 737. 5 6 Bell's App. Cas. 195.—See specially, judgment of Lord Cottenham at p. 211.

64 Ret. 190, Affd. 4 Ret. H.L. 75.

respect of inchoate sale.

Sect. 50.

Deposit of

though the circumstances never amounted to an actual contract enforceable by law, as in Allans v. Gilchrist1 (1875) and other cases there referred to.

Where a sum is deposited by the purchaser as part of purchase price. the purchase price, it will depend upon the terms of the special contract whether, in the event of his failure to pay the balance, the sum deposited is to be taken as liquidated damages in lieu of performance, so as to preclude any enquiry into the actual damage.2

Seller's remedy corresponds

with that of buyer.

Sect. 51.
DAMAGES

FOR NON

DELIVERY.

The seller's remedy against the buyer under this section corresponds with the buyer's remedy under Sect. 51 in the event of a breach by the seller. The general characteristics of the remedy are identical in each case.3 See COм., Sect. 51 post, p. 241.

Remedies of the Buyer.

51.-(1.) Where the seller wrongfully (") neglects or refuses to deliver the goods to the buyer, the buyer may maintain an action against the seller for damages for non-delivery."

(2.) The measure of damages is the estimated loss. directly and naturally resulting, in the ordinary course of events, from the seller's breach of contract.(e)

(3.) Where there is an available market for the goods in question the measure of damages is primâ facie to be ascertained by the difference between the

1 2 Ret. 587. See specially opinion of Lord Deas at p. 590, and the cases of Walker v. Milne (1823), 3 Sh. 379; Bell v. Bell (1841), 3 D. 1201 ; Heddle v. Baikie (1846), 8 D. 376.

2 In Commercial Bank v. Beal (1890), 18 Ret. 80, the seller was held entitled to retain the full deposit money, though it amounted to a considerable sum.

66

3 A buyer of timber from a merchant in Russia, being unable to implement his contract, sent the timber back and offered to pay damages as valued." The measure of damages was held to include the difference of exchange between St. Petersburg and London.-M'Leans v. Thorley, etc. (1797), H.L. 4 Pat. App. 22.

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