buy. So if a contract to accept and pay for goods is broken, the same rule may be properly applied, for the seller may take his goods into the market and obtain the current price for them " (n). The measure of damages will be the difference between the contract price and the market price "at the time or times" (e.g., when the goods are deliverable by instalments (o)) fixed for acceptance, not at the time when the buyer gives notice to the seller of his intention not to accept. When the buyer gives notice of his intention not to accept the goods, the seller may elect either to bring his action at once, as for a breach of the contract, or to await the time fixed by the contract for acceptance (p); but in either case the damages will be assessed with reference to the latter date (9). S. 50 (3). In the case of an agreement to sell future goods, if the seller Damages on elect to sue at once, he may do so without manufacturing or tendering the rest of the goods, and it is sufficient for him to aver that he was ready and willing to perform the contract. ILLUSTRATIONS. 1. A. agrees to sell to B. a quantity of corn, to be delivered at a certain place. Before its arrival B. repudiates the contract, but A. tenders the corn on its arrival. The difference between the contract price and the market price of the corn at the date of B.'s repudiation is 937.; at the date of tender it is 2187. A. may recover 2181. Philpotts v. Evans (1839), 5 M. & W. 475 (r). A. 2. A. agrees to manufacture and sell to B. iron railway chairs. After delivery of a part, B. gives notice that he will not accept more. thereupon discontinues manufacturing the rest of the chairs. A. may sue B. for damages for non-acceptance without manufacturing and tendering the rest of the chairs, and such damages are the amount which will put A. in the same position as if he had been allowed to (n) The following cases, arranged in order of date, illustrate the rule as to the measure of damages: Busk v. Davis (1814), 2 M. & S. 397; Gainsford v. Carroll (1824), 2 B. & C. 624; Maclean v. Dunn (1828), 4 Bing. 722; Boorman v. Nash (1829), 9 B. & C. 145; Philpotts v. Evans (1839), 5 M. & W. 475; Lamond v. Davall (1847), 9 Q. B. 1030; Valpy v. Oakeley (1851), 16 Q. B. 941; Griffiths v. Perry (1859), 1 E. & E. 680; 28 L. J. Q. B. 204; Boswell v. Kilborn (1862), 15 Moo. P. C. 309; Silkstone Coal Co. v. Joint Stock Coal Co. (1877), 35 L. T. N. S. 668; Ex parte Staple- (0) As to deliveries by instal- (p) Hochster v. De la Tour (1853), 2 111. (a) Frost v. Knight, supra. breach of agreement to sell future goods. S. 50 (3). Duty of seller or buyer to mitigate damages. Measure of damages when there is no available market. complete his contract. Cort v. Ambergate Ry. Co. (1851), 17 Q. B. 127; 20 L. J. Q. B. 460. It seems that the damages may sometimes be mitigated where the seller, or the buyer, under s. 51, having accepted the repudiation, has had an opportunity of lessening the effect of the breach (t). The extent, however, of the seller's obligation is uncertain. It has been decided that he is not bound to go into the market and make a fresh contract (u); but he is bound, it would seem, to act as a reasonable man in the ordinary course of business (x). Of course, when there is no difference between the contract price and the market price, or when the difference is in favour of the plaintiff, he can recover nominal damages only (y). In default of a market, the loss incurred by the seller must be ascertained from other evidence. It may be determined in some cases by the price at which the goods have been resold within a reasonable time, and under reasonable circumstances, by the seller to a third person (z); and where there is no market price, semble, that the whole price under the contract may be recovered as evidence of value, the proper measure of damages being the full amount of the damage which the seller, acting as a reasonable man in the ordinary course of business, has really sustained by the buyer's breach of contract (a). As the rules relating to damages are the same in an action by the buyer against the seller for non-delivery under s. 51, as in an action by the seller against the buyer for non-acceptance under this section, it will be convenient to include them in the notes under that section. At the ... times fixed.-See, for goods deliverable by instalments, under s. 51, post, p. 281. Postponement of the time fixed for acceptance.-See under s. 51, post, pp. 281 et seq., and the cases there cited in illustration. For fuller information upon the subject of this section, the (t) Per Cockburn, C.J., in Frost v. (u) Brown v. Muller (1872), L. R. (x) Dunkirk Colliery Co. v. Lever (1878), 9 Ch. D. at p. 25, per James, L.J.; Wilson v. Hicks (1857), 26 L. J. Ex. 242; see Mayne on Damages (ed. 1894), p. 174. (y) Valpy v. Oakeley (1851), 16 Q. B. 941, followed in Griffiths v. Perry (1859), 1 E. & E. 680; 28 L. J. Q. B. 204. (z) Dunkirk Colliery Co. v. Lever (1878), 9 Ch. D. at p. 24. (a) Dunkirk Colliery Co. v. Lever, supra, at p. 25. reader is referred to Mayne's Treatise on Damages (ed. 1894), pp. 170 et seq. S. 50 (3). Remedies of the Buyer. non-delivery. 51.—(1.) Where the seller wrongfully neglects Damages for 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. (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 of the goods at the time or times when they ought to have been delivered, or, if no time was fixed, then at the time of the refusal to deliver. Under this section the buyer can maintain an action for damages for non-delivery, whether the property in the goods has or has not passed to him; in the former case, he has a further remedy in trover (see post, p. 284), and also for specific performance under s. 52; in the latter case, it is his only remedy (b); "he may recover damages for the breach, but has no special remedy growing out of the relations of seller and buyer" (c). The seller wrongfully neglects or refuses to deliver.-As to the duty of the seller to deliver, see Part III. of the Act, ante, pp. 173 et seq. S. 51 (1). Where the goods are deliverable to the buyer "on request," Goods deit is "a condition precedent to the buyer's right of action that liverable" request." he should make this request either personally or by letter, unless there has been a waiver [under s. 11 (3), supra] of compliance with this condition, resulting from the seller's having incapacitated himself from complying with the request by consuming, (b) Unless the seller is estopped from denying that the property has passed: Woodley v. Coventry (1863), 2 H. & C. 164; 32 L. J. Ex. 185. on S. 51 (1). S. 51 (2). The rule in Seller's delay in delivery. or re-selling, or otherwise so disposing of the goods as to render a request idle and useless " (d). 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.-This is the first part of the rule as laid down in Hadley v. Baxendale (e) in 1854: “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, either as arising naturally, i.e., according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it." The first branch is dealt with in sub-s. 2 as a general rule, and its special application to cases where there is a market is stated in sub-s. 3. Both sub-sections are concerned with cases where there are no special circumstances known to both parties, and where in consequence the party breaking the contract "at the most, could only be supposed to have had in his contemplation the amount of injury which would arise generally, and in the great multitude of cases not affected by any special circumstances, from such a breach of contract "(ƒ). The second branch forms the second rule in Hadley v. Baxendale, and deals only with damages under special circumstances. This is contained in s. 54 under the words "special damages." Both the rules contained in these two sections are illustrations of the general principle that the buyer "is entitled to have in his hands, on the day fixed for delivery, goods which at that date have a certain value; . . . the value on that day is what the contract gives him "(g). And as the best evidence of what a thing is worth is its market price, we arrive at the special rule in sub-s. 3. But if the latter rule is inapplicable by reason of the absence of a market, the value must be otherwise ascertained. Delay in delivery.-When the seller's breach consists in delaying delivery, the rule is as stated by Willes, J., in Borries v. Hutchinson (h), viz., the damages are the difference between the value of the goods at the time when delivery was due and their (d) Benj. p. 925, see also p. 547. (f) Per Cur. in Hadley v. Baxendale, supra. (9) Blackb. p. 512. (h) (1865), 18 C. B. N. S. 445. value at the time when they were actually delivered. This rule may be considered a special application of that in sub-s. 2. ILLUSTRATIONS. 1. A. agrees to sell and deliver to B. by a certain date a floating boom derrick, the obvious and usual use of which was as a coal store. A. makes six months' delay in delivery, during which time the article might have been profitably employed as a coal store, and 4201. earned. B. is entitled to recover from A. the 4207., that being the direct and natural loss caused by A.'s breach. Cory v. Thames Ironworks Co. (1868), L. R. 3 Q. B. 181. 2. A. agrees to make and sell to B. by a certain date a firebox for an engine, which (not to A.'s knowledge) B. is under contract to repair for C. A. makes default in delivery, and B. has to buy elsewhere at a greater price, and has also to compensate C. for delay. B. may recover from A. the extra expense he has incurred, but not the damages paid to C., as these do not directly and naturally result from A.'s breach under the circumstances. Portman v. Middleton (1858), 4 C. B. N. S. 322. Where there is an available market. There must be some particular place where the buyer can buy other goods of the kind contracted for (i). "When a contract to deliver goods at a certain place is broken, the proper measure of damages in general is the difference between the contract price and the market price of such goods at the time when the contract is broken, because the purchaser having the money in his hands. may go into the market and buy"(k). Numerous instances of the application of this rule are to be found among the reported cases (1). The test is only a prima facie one, because it is subject to the saving contained in s. 54 as to special damages, and also to the provisions of s. 55. ILLUSTRATIONS. 1. A. agrees to sell to B. a quantity of cotton at 163d. a pound, deliverable on August 31st, and fails to deliver. B. re-sells for 193d. a pound. The price on the 31st was 184d. a pound. B. can recover from A. the difference between 163d. and 181d. a pound. Williams v. Reynolds (1865), 6 B. & S. 495. 2. A. agrees to sell and deliver to B. by December 31st a quantity of tallow at 658. a hundredweight. On October 1st A. informs B. that he does not intend to carry out his contract as he has sold the goods to C. The market price of tallow was then 718. a hundredweight, and, on December 31st, 81s. a hundredweight. B. may recover from A. the difference between 658. and 818. a hundredweight, and not that between (i) For the definition of a market, see per James, L.J., in Dunkirk Colliery Co. v. Lever (1878), 9 Ch. D. at p. 25. (k) Per Tindal, C.J., in Barrow v. Arnaud (1846), 8 Q. B. at p. 609. (1) E.g., Boorman v. Nash (1829), 9 B. & C. 145; Leigh v. Paterson S. 51 (2). S. 51 (3). |