LOUISE MERRETT

TRINITY COLLEGE
COMMERCIAL LAW LECTURES 2013-2014
SALE OF GOODS
BUYERS DAMAGES CASE STUDY

S ----------------- B
S agrees to sell B 1,000 kg of corn at a price of 5 per kg therefore a total price of 5,000.
Corn to be delivered 31/12/05.
Market price of corn on 31/12/05 7 per kg
1.

The general measure of damages s 51 SGA

S fails to deliver the corn.

General measure of damages set out in s 51(3) : Difference between CP and MP ie 2,000.
2.

When is market price to be assessed in cases of repudiatory breach

On 30/11/05 S indicates that he will not be able to deliver the corn. B accepts this repudiatory
breach of contract.
On 30/11/05 MP = 6 per kg.
Damages still 2,000 because MP still assessed on date when corn should have been delivered
UNLESS there is an obligation to buy on a rising market. (Tai Hing). If B refuses to accept
the anticipatory breach as he is entitled to do there can be no duty to mitigate.
Conversely if MP on 30/11/05 = 8 per kg damages still 2,000 as should not be better off
than if the contract had been performed (Melachrino)
3.

Relevance of price at which substitute goods are obtained

B actually buys replacement corn on 31/1/06 for 4 per kg.

Not relevant, damages still 2,000 unless the very same goods (R Pagnan & Fratelli).
4.

Relevance of fact that B had resold the goods to B2

In a separate agreement B1 had agreed to re-sell the corn to B2 for 6000.

Alternatively B1 had agreed to re-sell the corn to B2 for 8,000.
In both cases damages still 2,000.
In the first situation, the fact that B1 had made a bad bargain and agreed to re-sell at a lower
price irrelevant as to fulfil that contract would have to go out and buy at 7,000. (William
Bros v ET Egious).
Conversely, in the second situation the fact that he would have made a greater profit of
3,000 is irrelevant UNLESS can be claimed as special damages under s 54 (Hall v Pim).