Introduction
Understanding the breach of contract under the Sale of Goods Act, of 1930, is crucial for both buyers and sellers. This post delves into the key sections of the Act that outline the remedies available when either party fails to meet their contractual obligations.
Also Read: Rights of Unpaid Seller
1. Suit for Price
Section 55(1): If the buyer wrongfully neglects or refuses to pay for the goods after the property has passed to them, the seller can sue for the price of the goods.
Section 55(2): If the price is payable on a certain day irrespective of delivery, and the buyer fails to pay, the seller can sue for the price even if the property has not passed to the buyer.
Example: In Colley v. Overseas Exporter, the court held that the seller couldn’t claim the price as the goods hadn’t moved into the buyer’s possession due to the buyer not naming a definite ship.
2. Damages for Non-Acceptance
Section 56: If the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller can sue for damages.
Assessment of Damages: According to Sections 73 and 74 of the Indian Contract Act, of 1872, damages are assessed based on the loss that naturally arose from the breach or that was likely to result from it.
Example: In Suresh Kumar Rajendra Kumar v. K Assan Koya & Sons, the court allowed the seller to claim the difference between the contract price and the resale price of the goods after the buyer wrongfully rejected them.
3. Damages for Non-Delivery
Section 57: If the seller wrongfully neglects or refuses to deliver the goods, the buyer can sue for damages.
Measure of Damages: The difference between the contract price and the market price at the time of the breach.
Example: If a seller fails to deliver goods, the buyer can claim the market price difference as damages.
4. Specific Performance
Section 58: The court may order the specific performance of the contract for delivering specific or ascertained goods, without giving the defendant the option to retain the goods on payment of damages.
5. Remedy for Breach of Warranty
Section 59: When there’s a breach of warranty, the buyer can:
- Set up the breach in diminution or extinction of the price.
- Sue the seller for damages.
6. Repudiation of Contract Before Due Date
Section 60: If either party repudiates the contract before the delivery date, the other party can treat the contract as subsisting or rescind it and sue for damages.
7. Interest by Way of Damages and Special Damages
Section 61: Both buyer and seller have the right to recover interest or special damages where applicable. The court may award interest on the price payable or refundable due to a breach of contract.
Example: In M/s. J. Patel & Co. v. National Federation of Industrial Co-operatives Ltd., it was held that the seller could not claim interest for delayed payment if the delay was not the buyer’s fault.
Conclusion
By understanding these sections, parties involved in the sale of goods can better protect their interests and know their legal remedies in case of a breach.
FAQ on Breach of Contract under the Sale of Goods Act, 1930
What can a seller do if the buyer refuses to pay for the goods?
The seller can sue for the price if the property has passed to the buyer or if the price is payable on a specific date regardless of delivery.
What are the remedies available to a buyer if the seller fails to deliver the goods?
The buyer can sue for damages for non-delivery or seek specific performance to compel delivery of the goods.
How are damages assessed for non-acceptance of goods by the buyer?
Damages are based on the loss that naturally arose from the breach or that was likely to result from it.
Also Read: Formation of Contract under Sales of Good Act
Reference: legalserviceindia.com
