206 Chapter 7The Sale of Goods Act 1979
A seller who sues for the price is suing in debt and so has no duty to mitigate the loss. (See
Chapter 5 at pp. 154 – 6.)Damages for non-acceptance
The seller can sue for damages for non-acceptance if the buyer wrongfully refuses or
neglects to accept the goods. The right to sue for damages for non-acceptance is not affected
by whether or not the ownership of the goods has passed to the buyer.
Section 50(2) provides that the amount of damages is generally the loss directly and
naturally resulting in the ordinary course of events from the buyer’s breach of contract. This
restates the first rule in Hadley vBaxendaleand allows the seller to recover damages in
respect of matters such as profit lost on account of the buyer not having accepted.
Section 50(3) provides that where there is an available market for the goods the seller’s
damages are generally assessed as the difference between the contract price and the market
price of the goods when the goods ought to have been accepted or when the buyer refused
to accept. The market price is deducted from the contract price and the seller’s damages will
generally be the difference. If the market price is the same as, or higher than, the contract
price then the seller will be entitled only to nominal damages.Example
On 1 December Sue agrees to sell 10 tonnes of coal to Bindi for £1,000, delivery to be made
on 1 February. On 1 February Sue tries to deliver but Bindi refuses to accept the coal, say-
ing that it does not match the contract description. In fact, the coal delivered does match
the contract description. Bindi has therefore wrongfully refused to accept the goods. Sue
can sue for damages for non-acceptance. On 1 February there is an available market for this
type of coal. If on 1 February the market price of this type of coal is £90 per tonne, Sue’s
damages will generally be assessed at £100 (10 ×£10). If the market price on 1 February
is either £110 a tonne or £100 a tonne, Sue would generally be entitled only to nominal
damages.Section 54 allows the seller to recover additional damages to cover matters such as storing
the goods, insuring the goods or the cost of setting up a sale to a different buyer.Damages for refusing to take delivery on time
Where the buyer does accept the goods, but accepts them late, the seller can sue for dam-
ages for refusing to take delivery. Section 37 allows for this where the seller is ready and
willing to deliver the goods, and requests the buyer to take delivery, but the buyer refuses
to do this. It provides that the seller can sue for any loss caused by the buyer’s refusal to
take delivery and for a reasonable charge for care and custody of the goods. This section
compensates the seller for incidental losses incurred, such as looking after the goods, but
not for the loss of the bargain.Seller’s right to terminate the contract
The seller has the right to terminate the contract if the buyer repudiates the contract. A
buyer who shows an unwillingness to be bound by the contract will be regarded as having
repudiated the contract. A seller who rightfully terminates can sue for damages and (poss-
ibly) for the contract price. The circumstances in which a seller can sue for the price were
considered on p. 205.