Remedies for Breach of Contract

Failure of buyer to take delivery

Section 44 states that, when the seller is ready and willing to deliver the goods and requests the buyer to take delivery, and the buyer does not, within a reasonable time after such request, take delivery of the goods, he is liable to the seller for any loss occasioned by his neglect or refusal to take delivery, and also for a reasonable charge for the care and custody of the goods: Provided that nothing in this section shall affect the rights of the seller where the neglect or refusal of the buyer to take delivery amounts to a repudiation of the contract.

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Failure of buyer to accept goods

Section 56 states that, where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may sue him for damages for non-acceptance. Section 56 of the local Act has no provision corresponding to sections 50(2) and (3) of the English Sale of Goods Act 1979 which lay down the rules for the assessment of damages for non-acceptance. In their absence, the local court will most likely apply the common law principle derived from the leading case of Hadley v. Baxendale (1854) 9 Exch. 341 and embodied in section 74 begins by stating that a party who suffers as a result of a breach of a contract is entitled the compensation. The compensation to be claimed is that ‘which naturally arose in the usual course of things from the breach of it’.

The expression covers to a large extent both limbs of Hadley v. Baxendale supra. Subsection (2) of the same enacts the well established common law rule as to remoteness of damages. It states: Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach. Damages are too remote if the loss in question did not arise from the breach directly and naturally in the usual course of events (reflecting the language of subsection (1)) or was not reasonably foreseeable when the contract was made. It may be added that section 61(1) of the SGA preserves the second limb of Hadley v. Baxendale supra as to special damages. It says that nothing in the Act ‘shall affect the right of the seller or the buyer to recover interest or special damages bay be recoverable…’ Consequently, although the seller cannot show that his loss arises naturally in the usual course of things but where he can show that it is damages ‘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’, then the damage can be claimed under the second limb in Hadley v. Baxendale.

Failure of buyer to pay for goods

The right of the unpaid seller against the goods would be considered in Section 55. By this provision, the seller may sue for the price. Under subsection (1), where under a contract of sale the property in the goods has passed to the buyer and the buyer wrongfully neglects or refuses to pay for the goods according to the terms of the contract, the seller may sue him for the price of the goods. Second, under the subsection (2), where under a contract of sale the price is payable on a day certain irrespective of delivery and the buyer wrongfully neglects or refuses to pay such price, the seller may sue him for the price although the property in the goods has not passed and the goods have not been appropriated to the contract.

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