Section 55

In the case of Budhar v Betts, the defendant had to deliver his elephant to the plaintiff
for Kheda operations on 1st October. But the defendant asked for an extension of 6th
October. However, the defendant did not deliver the elephant until 11th October. The
plaintiff refused to accept the elephant. The court held that the very fact that the
defendant asked for extension is sufficient to make him conclude that time was of essence.
The act of asking for extension implies that he knows time is of essence. The court
construed the essence of time based on the words or conduct of the party.
In the case of Stickney v Keeble
it was held that even if the contract is not time specific, it can be later made time specific
by way of a notice. In this case, the purchaser had made repeated complaints about the
seller’s delay in completing construction. It was held that the essence of time was
communicated by virtue of a notice. It is based on the principle that every party is entitled
to receive what he has been promised within reasonable time, when time period is not
been specified.
Section 72
Morgan v Ashcroft

The defendant was in the habit of making bets with the plaintiff, a bookmaker. The plaintiff
claimed that through a mistake on the part of his clerk in making out the account the
defendant was overpaid to the extent of 24l. 2s. 1d. and he sued the defendant to recover
that amount. The defendant counterclaimed for a balance of 9l. 13s. 4d. alleged to be due to
him. The county court judge found that 24l. 2s. 1d. had been overpaid under a mistake of
fact and he entered judgment for the plaintiff. On appeal: -
Held, first, that the dispute between the parties was a dispute between a backer and a
bookmaker as to the nature of the account between them; and that in order to ascertain
whether or not an overpayment had been made it would be necessary for the Court to
examine the state of the account between the parties. But the Court was not entitled to do
that by reason of the Gaming Act, 1845, as by merely taking the account the Court
would be recognizing wagering transactions as producing legal obligations. The
plaintiff's claim therefore failed.

Section 73
In Hadley v Baxendale, the plaintiff’s mill had come to a standstill due to their crankshaft
breakage. The defendant carrier failed to deliver the broken crankshaft to the
manufacturer within the specified time. There has been a delay in restarting the mill. The
plaintiff sued to recover the profits they would have made if the mill was started without
delay. The court rejected the claim on the ground that the mill’s profits must be stopped
by an unreasonable delay in the carrier’s delivery of the broken shaft to the third person.
The court held that it was not foreseeable that a delay in the crankshaft would possibly
lead to the closure of the mill.
In Parsons Ltd v Uttley Ingham and Co. Ltd, the defendant failed to see that the livestock
feed supplied to the plaintiff should properly be ventilated as a result of which several
pigs of the plaintiffs died. The above test of damages in the contract was held satisfied as
the defendant could have contemplated or could have reasonably foreseen that there was
a serious possibility of the pigs getting ill.
The case of Czarnikow Ltd v Koufos or The Heron II is an English contract law case,
concerning remoteness of damage. The House of Lords held that the "remoteness" test,
as a limit to liability, is, in contract, more restrictive than it is in tort. Koufos chartered a
ship (the Heron II) from Czarnikow to bring 3,000 tons of sugar to Basra. It was nine days
late. The sugar price had dropped from £32 10s to £31 2s 9d. Koufos claimed the
difference in the loss of profit. Czarkinow knew there was a sugar market, but not that
Koufos intended to sell it straight away. The court held that market fluctuations are not
too remote and damages can be claimed.
Victoria laundry ltd. v. Newman industries ltd.
In this case, there was a delay in delivery of boiler due to which losses were suffered but
the court allowed compensation because the nature of losses were informed and
therefore in the reasonable contemplation of parties.
Section 74
Maula Bux v UOI – case differentiates between “security deposits” and “earnest money”
– in this case there were two contracts made by maula bux with the govt of India, one for
the supply of potatoes and the other for the supply of poultry eggs and fishes. The court
held that even though there was a contractual breach, since the govt failed to prove the
loss, liquidated damages were not allowed. The amount forfeited by the govt were also
directed to be paid back to Maula Bux on the grounds that it was security deposits and
not earnest money.
ONGC v Saw pipes ltd.
Delay in delivery of goods by saw pipes led to a breach of contract and ONGC can claim
for liquidated damages. Section 73 and 74 has to be read together in order to interpret
the fact scenario.
Section 75 ( direct provision & no relevant cases)