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See "quality" and "warranty" defined, post, pp. 119, 120. This section is the complement to sect. 11, ante, p. 25. Sect. 11 shews when goods may be rejected or when the buyer must resort to his remedy for breach of warranty under this section. Although the buyer may not be able to reject the goods for simple breach of warranty, he may be entitled to reject them for fraud or some other invalidating cause. This conclusion is pointed to by the words "by reason only of such breach of warranty " in sub-sect. (1), and see sect. 61 (2).

When the buyer is entitled to reject the goods, and does so, he can recover the price if he has paid it or the consideration for its payment has wholly failed.1 Then arises the question what further compensation, if any, is he entitled to? When he rejects the goods the position seems to be this. He has contracted for the supply of certain goods, and those goods have never been supplied to him. The seller, therefore, has failed in his obligation to deliver, and whatever damages would be recoverable in an action for non-delivery should on principle be recoverable in this case.2

In a case, where a horse, sold with a warranty, was killed, by no fault of the buyer, before the time for return had elapsed, it was held that the buyer could sue for breach of warranty, though he could not return the horse.3

Where an affirmation, which might be treated as a warranty, is made fraudulently, the buyer's powers are larger. In the first place he may retain the goods and sue for damages; and secondly, if he can restore the goods unaltered, he may rescind the contract.1

In Scotland hitherto no distinction has been drawn between warranties and conditions. Every material term is a condition, and the rule has been that where the buyer can reject the goods but has not done so, he cannot sue for damages. The actio quanti minoris only applied to cases where the goods could not be returned; but now the buyer has a double remedy, guarded however by sect. 59.

Sect. 53.

54. Nothing in this Act shall affect the right of the Interest and special buyer or the seller to recover interest or special damages damages. any case where by law interest or special damages may

in

1 Mayne on Damages, 4th ed., p. 180.

2 See Bridge v. Wain (1816), 1 Stark. 504, as commented on in Elbinger, Actien Gesellschafft v. Armstrong (1874), L. R. 9 Q. B., at p. 476, where this position seems to be assumed.

3

Chapman v. Withers (1888), 20 Q. B. D. 824.

▲ Holdsworth v. Glasgow Bank (1880), 5 App. Cas. 317, at pp. 323, 338 (distinguishing goods from shares).

Sect. 54.

Special damage.

be recoverable, or to recover money paid where the consideration for the payment of it has failed.

As to interest, see note to sect. 49, ante, p. 96.

As regards special damages, there are no rules peculiar to the contract of sale. Each case must be determined on its own merits, according to the general rule that, when a contract is entered into by the parties with knowledge that there are special circumstances attaching to it, which, in the ordinary course of things, would produce special loss if the contract were broken, the law implies a liability to pay damages for such special loss. "We must follow out the rule," says Cotton, L.J., in an action for non-delivery of a gun, “that the plaintiffs are only to have the damages which are the ordinary and natural consequences of the breach; but this rule is subject to the limitation, that where the breach has occasioned a special loss which was actually in contemplation of the parties at the time of entering into the contract, that special loss, happening subsequently to the breach, must be taken into account."1 In a later case, where the action was brought for breach of warranty, Fry, L.J., suggests four tests for determining whether the damages claimed are recoverable. (1.) What are the damages which actually resulted from the breach of contract? (2.) Was the contract made under any special circumstances, and, if so, what were those circumstances? (3.) What, at the time of making the contract, was the common knowledge of both parties? (4.) What may the Court reasonably suppose to have been in the contemplation of the parties as a probable result of the breach of the contract, assuming the parties to have applied their minds to the contingency of there being such a breach? 2

The liability to pay damages for breach of contract is an obligation annexed by law independently of the volition of the parties, and the criterion is necessarily an objective one. What the parties themselves may have contemplated is immaterial. The question is what a reasonable man with their common knowledge would contemplate as a probable consequence of the breach if he applied his mind to it. The same result will be arrived at if the supposed contemplation of the

1 Hydraulic Engineering Co. v. McHaffie (1878), 4 Q. B. D., at p. 677, C. A. (gun ordered to fulfil sub-contract); cf. Grebert v. Nugent (1885), 15 Q. B. D. 85, C. A. (goods ordered for French sub-contract).

2 Hammond v. Bussey (1887), 20 Q. B. D., at p. 100, C. A. (breach of warranty and sub-sale with similar warranty, costs of action reasonably defended), followed Agius v. Great Western Colliery Co. (1899), 1 Q. B. 413, C. A.

parties be wholly eliminated. Given a contract made without any special circumstances, then the measure of ordinary damages is the loss which naturally arises from the breach of such a contract. Given a contract made under special circumstances to the knowledge of both parties, then the special damages are those which naturally arise from a breach of such a contract under the particular circumstances.

Sect. 54.

tion.

As to failure of consideration also, there is nothing peculiar to the Failure of contract of sale. Money paid on a consideration which has failed can considerausually be recovered as money had and received.1 Where the plaintiff bought and paid for 175 tons of terra japonica, and only 155 tons were delivered, he was held entitled to recover a proportionate amount of the price under the common money counts.2

1 See Bullen & Leake's Prec. of Pleading, 3rd ed., pp. 48, 49, and cases there collected. As to set-off of failure of consideration, see Biggirstaff v. Rowett's Wharf (1896), 2 Ch. 93, C. A.

2 Devaux v. Conolly (1849), 8 C. B. 640 (acceptance of short delivery); but cf. Covas v. Bingham (1853), 2 E. & B. 836, where by the contract the bill of lading was made conclusive as to quantity.

Sect. 55.

Exclusion

PART VI.

SUPPLEMENTARY.

55. Where any right, duty, or liability would arise under a contract of sale, by implication of law, it may of implied be negatived or varied by express agreement1 or by the course of dealing between the parties, or by usage, if the usage be such as to bind both parties to the

terms and conditions.

contract.

This section is merely an application of the general maxims, Expressum facit cessare tacitum, and Modus et conventio vincunt legem. As Pothier has pointed out, sale is a consensual contract, and the parties may alter at will the obligations which the law implies from the general nature of the contract.2 Lord Blackburn, discussing the correlative obligations of payment and delivery, says, "There is no rule of law to prevent the parties from making any bargain they please;" ;"3 and Lord Esher says, "Merchants are not bound to make their contracts according to any rule of law."4 Bédarride accurately expresses the similar rule in France. "C'est surtout de la vente commerciale qu'on peut dire qu'elle peut se plier à toutes les modalités, sans autres exceptions que celles qui résulteraient d'une disposition de la loi prohibitive, ou des exigeances de l'ordre de la morale ou des bonnes mœurs." 5

In estimating the effect of an express stipulation, it must be borne in mind, as Willes, J., remarks, that "the doctrine that an express

1 See, e.g., Ward v. Hobbs (1887), 4 App. Cas. 13 (diseased pigs sold "with all faults").

2 Contrat de Vente, Nos. 1, 181, 306.

3 Calcutta Co. v. De Mattos (1863), 32 L. J. Q. B., at p. 329; see the passage cited at length, post, pp. 188-190.

Honck v. Muller (1881), 7 Q. B. D., at p. 103, C. A.

5 Des Achats et Ventes, § 226.

provision excludes implication does not affect cases in which the express provision appears on the true construction of the contract to have been superadded for the benefit of the buyer.” 1 French law goes further, and art. 1602 of the Civil Code provides that, where a stipulation in a contract of sale is ambiguous, it is to be construed in favour of the buyer. And this was the Roman rule. In contrahendâ venditione ambiguum pactum contra venditorum interpretandum est.2 Referring to a consignee's lien for advances, Lord Westbury says: "Lien is not the result of an express contract; it is given by implication of law. If, therefore, a mercantile transaction which might involve a lien is created by a written contract, and security given for the result of the dealings in that relation, the express stipulation and agreement of the parties for security exclude lien, and limit their rights by the extent of the express contract they have made." 3

Sect. 55.

As regards trade usage, it is to be noted that when one party relies Usage. on and gives evidence of usage, the opposite party is at liberty to prove" either, first, the non-existence of the usage; or, secondly, its illegality or unreasonableness; or, thirdly, that, in fact, it formed no part of the agreement between the parties." 4 As to the ground on which evidence of usage is admitted, and the limits of its application, see post, p. 182.

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For a list of terms and expressions which have been the subject of judicial construction, see note B, post, p. 181; and for a list of usages which have been proved in relation to contracts of sale, see Wood's Mercantile Agreements, pp. 368–371.

time a

56. Where, by this Act, any reference is made to a Reasonable reasonable time, the question what is a reasonable time is a question of fact.

1 Mody v. Gregson (1868), L. R. 4 Ex., at p. 53, Ex. Ch.; approved, Drummond v. Van Ingen (1887), 12 App. Cas., at p. 294, per Lord Herschell. Cf. Bigge v. Parkinson (1862), 31 L. J. Ex. 301, Ex. Ch. (sale of provisions for troopship with warranty that they should pass inspection).

2 In English law occasional effect is given to the maxim Verba fortius accipiunter contra proferentem; see notes to Roe v. Tranmar, 2 Smith, Lead Cas., 7th ed., p. 525.

3 Re Leith's Estate (1866), L. R. 1 P. C. 296, at p. 305.

♦ Taylor on Evidence, § 1077. See all the authorities on usage collected and reviewed in notes to Wigglesworth v. Dallison, 2 Smith, Lead Cas., 9th ed., p. 569; and as to usage to bind both parties, i.e. that it must be known or taken to be known to both, see Robinson v. Mollet (1875), L. R. 7 H. L. 802.

question of

fact.

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