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The buyer in such a situation must always sue for damages, except as noted in the next section. He is entitled to such damages as he actually sustains provided they are such as must have been contemplated by the parties as the probable result of breach.
If the seller has not passed title to the buyer, and refuses to perform his contract and make delivery the buyer's usual remedy is that of suit for damages. This would be the case whether the goods were ascertained goods at the time the contract was made, or had thereafter become ascertained provided in either case title had not passed, or whether the goods were never ascertained, perhaps not even acquired or manufactured. For in any such case, the goods never having become the buyer's (which is our hypothesis), the buyer cannot claim them (for his right to specific performance in unusual cases, see next section).
The rule of damages in such cases is the usual rule of damages for breach of any contract—that the buyer may have such damages as he has actually sustained and which the seller from what he knew at the time of the making of the contract must have foreseen might result from breach by him.
The usual rule of damages in such a case is the difference between the contract price and the market price at the time and place of delivery; if there is a market price.99
If there is no market price the rule of damages is the difference between the contract price and the reasonable value of the goods.
99. Capen v. De Steyer Glass Co., 105 Ill. 185. (Holding also that if the goods cannot be bought in the market where they were to have been delivered, cost of getting them from next nearest market may be added.)
This rule of damages may be totally inadequate to protect and compensate the buyer if he bought for a special purpose known to the seller, in which case his damages, according to the general rule of damages in contract cases consist in the loss to which the seller from what he knew at the time of entering into the contract must have contemplated would likely result from breach.
Example 31. Seller agreed to deliver machinery for harvesting. Buyer's damages or default is determined from amount of yield and contemplated yield, although to some extent speculative. 100
A buyer, however, must do what he reasonably can to keep down damages.
Sec. 100. GOODS NOT DELIVERED, TITLE NOT PASSED, BUYER'S RIGHT TO SPECIFIC PERFORMANCE. If the goods have not been delivered, and the title has not passed and the seller refuses to pass title, the buyer, not being in default, may have a decree of a court of equity that the seller specifically perform where damages are not adequate compensation to the buyer, that is, where th goods have a peculiar value to the buyer which cannot be estimated in money damages.
The right to have specific performance of a contract of sale of personal property is not usual. It is an extraordinary remedy which a court of equity will grant if the judgment for damages cannot adequately compensate the buyer, on account of the fact that the thing sold is an article in which he has some peculiar and especial interest. 101
100. Cushman Motor Works Co. v. Kelley, 173 Pac. (Okla.)
101. See Volume on Contracts.
Sec. 101. GOODS NOT DELIVERED, TITLE PASSED, BUYER'S RIGHT TO OBTAIN GOODS THEMSELVES. If the goods are undelivered, but title has passed to the buyer, the buyer not being in default, that is, having paid or tendered the price, may obtain the goods themselves in an action of replevin.
We saw in the previous section that if the title has not passed, the buyer cannot, except under unusual circumstances, obtain the goods themselves, but must content himself with damages, but if the title has clearly passed, the goods then are the buyer's and he may obtain them from the seller as he may obtain his property from any other person who wrongfully withholds it. This assumes that the buyer is himself not in default in the performance or tender of performance required of him by the contract.
B. Where Goods Are Delivered or Tendered to Buyer.
(a) Right to refuse acceptance for breach of warranty.
Sec. 102. GOODS TENDERED TO BUYER, RIGHT TO REFUSE ACCEPTANCE FOR BREACH OF WARRANTY. If the goods which are tendered to the buyer do not comply with the seller's warranties, either express or implied, the buyer may treat the warranty as a condition to his obligation to accept, and may therefore reject the goods.
Provision of the Sales Act. "Where the property in the goods has not passed, the buyer may treat the fulfilment by the seller of his obligation to furnish goods as described and as warranted, expressly or by implication, in the contract to sell as a condition of the obli
gation of the buyer to perform his promise to accept and pay for the goods.” 102
The Sales Act states the law as it has developed by the weight of authority, although by artificial reasoning some courts had developed the view that if the warranty was express, the buyer must accept and sue upon his warranty. The general law of contract is that a party to a contract need not accept a defective performance. One is entitled to what he has bought and ought not to be compelled to receive anything inferior thereto. Whether he may receive it, and still reserve his right upon the warranty is considered elsewhere.
Sec. 103. GOODS DELIVERED TO BUYER, RIGHT TO REJECT AFTER TRIAL.
This subject has been developed in another section, and is noted here for purposes of completeness. If a buyer must make a trial or test in order to determine whether the goods are those which he has ordered, the buyer may make such trial or test in order to avail himself of his rights described in the preceding section.
Sec. 104. GOODS DELIVERED TO BUYER, BUYER'S RIGHT TO ACCEPT AND SUE FOR BREACH OF WARRANTY. If goods are tendered the buyer which do not comply with the warranty, he may reject, as above shown, or accept and sue for breach of warranty, express or implied.
Provision of the Sales Act. "In the absence of express or implied agreement by the parties, acceptance of the goods by the buyer shall not discharge the seller from liability in damages or other legal remedy for breach
102. Uniform Sales Act, Sec. II, par. 2.
of any promise or warranty in the contract to sell or sale. But if, after acceptance of the goods, the buyer fail to give notice to the seller of the breach of any promise or warranty within a reasonable time after th: buyer knows, or ought to know of such breach, the seller shall not be liable therefor.” 103
In some states the doctrine was developed that in case of an implied warranty, the warranty would not survive acceptance, that is, an acceptance was a waiver of the warranty, although in other states the right to accept the goods and sue on the warranty was recognized. The Sales Act adopts the majority view that one may accept goods whether the warranty is express or implied and still sue on the warranty provided he gives notice at the time or within a reasonable time thereafter that he intends to hold the seller on the warranty. This is the more sensible rule. To hcld that a buyer must reject in order to preserve his rights under an implied warranty was not only a hardship frequently upon him, but in many cases, as for instance, where the goods came from a distance, burdensome upon the seller himself.
The damages sustained for the breach of the warranty are those which reasonably result therefrom, and may include damages for personal injuries if such injuries can be said to be the natural and probable result of the breach.104
103. Uniform Sales Act, Sec. 49.