Chapter 12: Buyer's remedies

This is an order of the court directed to the seller to carry out the contract, that is, to deliver the goods, and is available only in restricted circumstances:

• the seller’s breach must be breach of a duty to deliver specific or ascertained goods; and

• the situation must be one where an award of damages would not be an adequate remedy. This is likely to be the case only where the goods are unique or virtually unique.

The buyer has the right to reject goods for breach of condition. This right and the restrictions upon it were explained on p 78.

When the buyer is entitled to and does reject the goods, he is entitled to recover any of the price already paid. In addition to rejecting the goods, and irrespective of whether repayment of the price is claimed, the buyer may bring a claim for damages for:

• storage expenses if any; and

• non-delivery,

An award of Damages is the principal and default remedy available for any breach of contract. Damages are said to be available as of right to the claimant: this means that, unlike the remedy of Specific Performance, once claimable loss is proven the court has no discretion concerning whether or not the remedy of damages is granted. The remedy of Damages is thus theoretically always available to the claimant who can prove that he has suffered losses directly caused by the breach of contract which the law will then allow him to claim. As the preceding sentence suggests, though the remedy of Damages is theoretically available to the claimant as of right, there is still scope for the defendant to dispute either: (a) his causation of the alleged loss, (b) whether the claimed losses are too remote from the breach of contract to be claimable, and (c) the continued factual existence of the losses, Though all of these principles are fully covered by text books on contract law it is worth briefly summarising them here as they are also present within various provisions of the Sale of Goods Act 1979 (as amended) which are discussed in this chapter.

The defendant can resist and or reduce the amount of any award of Damages if he can satisfy the court that either:

1. He did not cause the claimant’s loss.

   The absence of causation by the defendant will prevent any Damages from being awarded in connection with the loss claimed (C & P Haulage v Middleton [1983]).

   C & P Haulage v Middleton [1983] Basic facts

   The claimant rented a commercial garage from the defendant by means of succession of individual contracts with a duration of six months. During the course of one such contract the claimant spent a deal of money to outfit the garage. Shortly afterwards the defendant breached the contract by terminating it ten weeks early. When the claimant sued for the breach of contract he tried to claim for his losses connected with outfitting the garage. The court refused to allow these losses to be claimed as the defendant’s breach of contract had not caused these losses to arise: the defendant could lawfully have declined to renew the rental agreement at the end of the six month lease at which point such ‘losses’ would then have arisen anyway.

   Relevance

   The breach of contract must cause the loss to arise – it is not enough that a breach merely accelerates the occurrence of a lawful act.

2. The loss claimed is too remote a consequence of the breach of contract to be included within the calculation of damages connected with that breach of contract:

   The defendant is liable for loss which arises naturally from his breach of contract and may also be liable for other losses if these losses were ones which, at the time of making the contract, were within the reasonable contemplation of both parties as the likely result of breaching that contract. If the two limbs of this rule – derived from Hadley v Baxendale [1854] – are expressed negatively rather than positively we find that the defendant will NOT be liable in Damages for a given loss if either

   the loss claimed did not arise naturally from the breach of contract, or,

   • the loss did not fall within the reasonable contemplation of both parties at the time when they made their contract as being a reasonably foreseeable consequence of such a breach of contract.

   The application of the second limb of this rule has led to a number of difficult cases the most recent of which is Transfield...