Page 140 - DMGT407Corporate and Business Laws

Unit 5: Law of Sale of Goods

discretion, order the specific performance of the contract. This remedy is allowed only if damages Notes
would not be an adequate remedy or the goods are of a unique nature or of special value.

Example: A contracted to sell a rare painting to B for ` 10,000. Later on, A refused to
perform his promise. B applies to the court for specific performance of the contract. The court
may pass an order directing A to specifically perform his promise.

Suit for Breach of Condition

Where there is a breach of condition, express or implied, on the part of the seller, the buyer can
avoid the contract and can reject the goods. But he cannot reject the goods if: (i) he waives the
breach of condition and elects to treat it as a breach of warranty, or (ii) the contract is not
severable and he has accepted the goods or part of them, or (iii) the contract is for specific goods
and the property has passed to him. In all these cases, as provided in s.13, the condition sinks or
descends to, or is treated as warranty and the goods cannot be rejected but only a suit for
damages can be filed.

Suit for Breach of Warranty (S.59)

Where there is a breach of warranty by the seller, or in case where the breach of condition on the
part of the seller is being treated as a breach of warranty, the buyer can sue the seller for
damages for such breach. Thus, if the buyer has already paid the price, his only remedy is to sue
for damages. In case he has not paid the price, he may set-up against the seller the breach of
warranty in diminution or extinction of the price. The measure of damages for breach of warranty
is estimated loss ensuing directly and naturally from the breach.

Example: A purchased a second hand typewriter and spent some money in getting it
overhauled. Later on, the typewriter was seized from him by police as stolen property. Held:
There was a breach of warranty of quiet possession and the buyer could recover damages
including the cost of repair.
The right of the buyer under s.59 cannot be exercised by him if he has waived the condition. Also
he is duty bound to give notice of his intention to the seller in what respect the goods are
defective and whether he is electing to treat the condition as a condition or as a warranty. This
notice must be given by the buyer within a reasonable time after he discovers the alleged defect
in the goods.

Anticipatory Breach

Where the seller repudiated the contract before the time for performance has come, the buyer
has the option; (i) to treat the contract as repudiated and claim damages, or (ii) he may keep the
contract open till the date of delivery of goods. Under the former alternative the contract comes
to an end and damages will be assessed according to the price then prevailing. In the second case,
the contract remains open at the risk and for the benefit of both parties. The party repudiating
has an option to perform the contract. Further, in case the repudiating party does not perform
the contract on the stipulated date, the measure of damages will be with reference to the price on
the day stipulated for delivery.
Recovery of Interest (S.61)

If the buyer has already paid the price and the seller fails to deliver the goods on the due date, the
buyer has a right to sue for interest on the amount of the price. In the absence of a contract to the

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