Remedies of the buyer and seller 203(iii) The buyer can accept all of the goods which do conform to the contract and also accept
some of the goods which do not. The seller can be sued for non-delivery in respect of
those goods which are rejected. The seller can also be sued for breach of warranty
of quality as regards the goods which did not conform to the contract but which were
accepted.
However, there is no right of partial rejection where the goods form part of one commercial
unit. For example, a buyer who bought a set of encyclopaedias and accepted one volume
would not be able to reject later volumes which were badly printed. The buyer would be
able to claim damages for breach of warranty of quality.
The buyer’s right to damages for non-delivery
The buyer’s right to sue for damages for non-delivery arises in the following three
circumstances:
(i) Where the seller wrongfully neglects to deliver the goods.
(ii) Where the seller wrongfully refuses to deliver the goods.
(iii) Where the seller breaches a condition and the buyer decides to treat the contract as
terminated and rejects the goods.
Section 51(2) repeats the first rule in Hadley vBaxendaleby providing that the measure of
damages for non-delivery is the estimated loss directly and naturally arising in the ordinary
course of events from the seller’s breach of contract.
Where there is an available market for the goods, s. 51(3) provides that the amount
of damages is generally to be the difference in price between the contract price and the
market price of the goods at the time when the goods should have been delivered. The con-
tract price is deducted from the market price and the difference is generally the measure of
damages. If the contract price is the same as, or more than, the market price then the buyer
will only be entitled to nominal damages.
There will be an available market for the goods if the goods were not unique, if a dif-
ferent seller of such goods could be found, and if the price of such goods could be fixed by
supply and demand. There is no market price for second-hand cars as they are regarded as
unique goods.
A buyer who has a right to claim damages for non-delivery can also refuse to pay the
contract price and can recover any amount of the price which has already been paid.
Example
On 6 July Simon agrees to sell Barry 10 tons of coal for £1,000, delivery to be made on
1 December. Barry pays £100 in advance. Simon refuses to deliver on 1 December. Barry
can recover the £100 already paid. If there was an available market for coal of this type on
1 December, and the market price for 10 tons of such coal was £1,500, Barry’s damages
would usually be £500. If on 1 December the market price of this type of coal was either
£1,000 or £750, Barry’s damages would generally be nominal. That is to say, no substantial
damages could be claimed.If goods are delivered late, but the buyer chooses to accept the goods, damages will be
assessed on ordinary contract principles, which were considered in Chapter 5. The buyer
might be able to claim for loss of profit or for loss caused by the difference in the price of