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Market rate.---Under a contract for the sale of goods the measure of damages upon a breach by the buyer is the difference between the contract price and the market price at the date of the breach. If the seller retains the goods after the breach, he cannot recover from the buyer any further loss if the market falls, nor is he liable to have the damages reduced if the market rises. If the breach is by the seller, as the seller has the right to deliver at any time on the date of delivery, it is physically impossible for the buyer to purchase elsewhere on the date of the breach. In such a case, therefore, the market price on the day following the breach is the yardstick by which the buyer's claim to damages is evaluated.

Generally it is quite settled that on a contract to supply goods of a particular sort, which at the time of the breach can be obtained in the market, the measure of the damages is the difference between the contract price and the market price at the time of tire broach. If the market rate on the due date is not available, the Court may take into consideration the rate prevalent just before and just after the date. But the subject-matter of the contract may not be marketable. In that case the value must be taken as fixed by the price which actually has to be paid for the best and nearest available substitute. Where no such substitute is available, then if there has been a contract to resell them the price at which the contract was made will be evidence of their value; but if there has been no such contract, the market value may be estimated by adding to their price at the place where they were purchased the costs and charges of getting them to their price of destination, and the usual importer’s profits.

The fact that the buyer sustains no actual loss from the seller's failure to deliver the goods is no ground for awarding merely nominal damages to the buyer. The buyer is entitled, as indicated by illustration (a) to the section, to receive from the seller by way of compensation the sum by which the contract price falls short of the price for which the buyer might have obtained goods of like quality at the time when they ought to have been delivered.

"Obviously value created for special purpose is irrelevant and it is for this reason that the price made by bulls and bears are of no use to us. If the market value is uncertain, then we must have recourse to such surrounding circumstances as affect the probabilities, and among them to real prices proved about the time of due date. Now market price is to a great extent based on, and made up of the views of, those engaged in a particular business and familiar with its incidents. These views; are based not only on transactions in which a man may himself have been actually engaged, but also on the general rumour and reputation in the market. Therefore, a man may be a competent witness for the purpose of testifying to market value, though he may not himself have been engaged in or carried through; my dealing in the market at the particular date in question. We
cannot then exclude from consideration any evidence on this point, merely because the deponent may not himself have bought or sold on the due date."

Where the defendant contracted to deliver to the plaintiff at Bombay 1,000 tons of a certain species of coal from February to June, and failed to deliver any of the coal, and no purchase was made by the plaintiff against the defendant's contract, and there was practically no coal in Bombay of the description contracted for at the dates at which delivery should have been given, the Court received in evidence a statement produced by the plaintiff showing the rates at which he had during the contract period settled certain contracts for the same coal with other persons, to ascertain the actual value of the coal on the dates of the breach.

(b) A hires B's ship to go to Karachi, and there take on board, on the first of January, a cargo which A is to provide, and to bring it to Pasni, the freight to be paid when earned. B's ship does not go to Karachi, but A has opportunities of procuring suitable conveyance for the cargo upon terms as advantageous as those on which he had chartered the ship. A avails himself of those opportunities, but is put to trouble and expense in doing so. A is entitled to receive compensation from B in respect of such trouble and expense.

A contracts with B to sell and deliver goods which on the day appointed for delivery are worth Rs. 80 per ton. They are delivered later on a day when they are worth only Rs. 50 per ton, but meanwhile A has sold them for Rs. 70 per ton. A is entitled to damages only for his actual loss of Rs. 10 per ton.

(c) A contracts to buy of B, at a slated price, 50 maunds of rice, no time being fixed for delivery. A afterwards informs B that he will not accept the rice if tendered to him. B is entitled to receive from A., by way of compensation, the amount, if any, by which the contract price exceeds that which B, can obtain for the rice at the time when A informs B that he will not accept it.

Where no time fixed for delivery.---If in the case put above A gave notice to B that he would not take delivery beyond a certain date, and delivery is not made within that time, the measure of damages would be the difference between the contract price and the market price on that date.

(d) A contracts to buy B's ship for 60,000 rupees, but breaks his promise. A, must pay to B, by way of compensation, the excess, if any, of the contract price over the price which B can obtain for the ship at the time of the breach of promise.

(e) A, the owner of a boat, contracts with B to take a cargo of jute to Karachi for sale at that place, starting on a specified day. The boat, owing to some avoidable cause, does not start at the time appointed, whereby the arrival of the cargo at Karachi is delayed beyond the time when it would have arrived if the boat had sailed according to the contract. After the date, and before the arrival of the cargo, the price of jute falls. The. measure of the compensation payable to B by A, is the difference between the price which B could have obtained for the cargo at Karachi at the time when it would have arrived if rewarded in due course and its market price at the time when it actually arrived.

Late delivery.---There is not any general rule that damages cannot be recovered for loss of market on a voyage by sea: wherever the circumstances admit of calculations as to the time of arrival and the probable fluctuations of the market being made with the same degree of reasonable certainty in the case of a sea as of a land transit, there can be no reason why damages for the delivery should not be calculated according to the same principles in both cases.

(f) A Contracts to repair B's house in a certain manner, and receives payment in advance. A repairs the house, but not according to contract. B is entitled to recover from A the cost of making the repairs conform to the contract.

(g) A contracts to let his ship to B for a year, from the first of January, for a certain price. Freights rise, and, on the first of January, the hire obtainable for the ship is higher than the contract price. A breaks his promise. He must pay to B, by way of compensation, a sum equal to the difference between the contract price and the price for which B could hire a similar ship for a year on and from the first January.

(h) A contracts to supply B with a certain quantity of iron at a fixed price, being a higher price than that for which A could procure and deliver the iron. B wrongfully refuses to receive the iron. B must pay to A, by way of compensation, the difference between the contract price of the iron and the sum for which A could have obtained and delivered it.

Delivery by installments---Anticipatory breach.---If the iron was to be delivered by installments at certain dates, e.g., at the end of the three months of September, October, and November, the measure of damages is the sum of the differences between the contract and the market price of the several installments on the respective final days for performance; and the same rule is applied where the seller, before the expiration of the whole time for performance, has refused to complete the contract, and the buyer has treated the refusal as an immediate breach unless the seller can show that the buyer could have obtained a new contract on better terms.

A, a stockbroker, closes the account of a client, B, prematurely and without instructions, instead of carrying it over to the next settlement, as on the facts and the true construction of their agreement he ought to have done. B informs A that he insists on the performance of the contract. A cannot claim to have the damages assessed with reference to the price of stocks at the date of closing the account, but B is entitled to claim damages assessed according to the prices at the date fixed for performance; quaere, whether according to the highest price reached in the interval.

(i) A delivers to B, a common carrier, a machine to be conveyed without delay to A's mill, informing B that this mill is stopped for want of the machine. B unreasonably delays the delivery of the machine, and A, in consequence, loses a profitable contract with the Government, A is entitled to receive from B, by way of compensation, the average amount of profit which would have been made by the working of the mill during the time that delivery of it was delayed, but not the loss sustained through the loss of the Government contract.

A sent by railway a set of books to himself as consignee. On arrival it was found that three volumes were missing, making the whole set useless. A, sued the railway authority for the price of a whole set, but it was held that as the railway had no notice of the fact that loss of three volumes would make the whole set useless, the invoice mentioning only a bundle of books, they were liable only for the price of the lost volumes.

D agreed to sell a boiler to P, but it was damaged through D's negligence while being loaded on P's lorry. There was a consequent delay of twenty weeks in delivery. P was a dyer, and D knew that the boiler was required for his business. P wanted it for especially lucrative dyeing contracts with the Government, but based his claim for damages merely on the loss of profit on ordinary dying contracts. The Court of Appeal held that P had been too pressing for it to be arguable that as for as D knew the boiler might be required as a museum piece, or as a spare. The Court further rejected D's argument that P could not recover some conjectural loss for ordinary dyeing contracts for which he never intended to use the boiler, and held for P.

(j) A, having contracted with B to supply B with 1,000 tons of iron at 100 rupees a ton, to be delivered at a stated time, contracts with C for the purchase of 1,000 tons of iron at 80 rupees a ton, telling C that he does so for the purpose of performing his contract with B C fails to perform his contract with A, who cannot procure other iron, and B, in consequence, rescinds the contract. C must pay to A 20,000 rupees, being the profit which A would have made by the performance of his contract with B.

If in the circumstances set out in illustration (j) other iron was available, but the market price at the time fixed for delivery had risen to 120 rupees a ton, A. cannot recover from C more than 20,000 rupees as the sub-sale was in contemplation, whereas if the sub-sale was not within C's knowledge A could have recovered 40,000 rupees from him.

What is contemplated is that if the goods are not delivered to him, A will go out into the market and buy similar goods and honour his contract with B in that way. If there is no market price the measure of damages-is the difference between the re-sale price and the contract price.

B, having contracted with a shipowner, X, to supply coal to his steamers, enters into a contract with A, a colliery owner, for coal. The coal is expressly stated to be for shipment in X's steamers. A fails to deliver coal to B in time, and a ship of X's is delayed in consequence. X sues B and claims large damages: B defends the action and reduces the damages to a much smaller amount. A is liable to B for the costs reasonably incurred by B in defending this section, as well as for the damages and taxed costs therein.

(k) A contracts with B to make and deliver to B, by a fixed day, for a specified price, a certain piece of machinery. A does not deliver the piece of machinery at the time specified, and, in consequence of tills, B, is obliged to procure another at a higher price than that which he was to have paid to A, and is prevented from performing a contract which B. had made with a third person at the time of his contract with A (but which had not been then communicated to A), and is compelled to make compensation for breach of that contract. A must pay to B, by way of compensation, the difference between the contract price of the piece of machinery and the sum paid by B for another, but not the sum paid by B to the third person by way of compensation.

(1) A, a builder, contracts to erect and finish a house by the first of January in order that B may give possession of it at that time to C, to whom B has contracted to let it. A is informed of the contract between B and C A builds the house so badly that, before file first of January, it falls down and has to be rebuilt by B, who, in consequence, loses the rent which he was to have received from C, and is obliged to make compensation to C for the breach of his contract. A must make compensation to B for the cost of rebuilding the house, for the rent lost, and for the compensation made to C.

(m) A sells certain merchandise to B, warranting it to be of a particular quality, and B, in reliance upon this warranty, sells it to C, with a similar warranty. The goods prove to be not according to the warranty, and B becomes liable to pay C a sum of money by way of compensation. B is entitled to be reimbursed this sum by A.

There are cases where the goods, usually food or drink have been so adulterated that B has incurred a fine under some statute, and has sued A for damages for breach of contract, claiming under several heads, first for the fine and cost, secondly for sums he has been obliged to pay to his customers under sub-sales, and thirdly for loss of trade, loss of reputation and mental suffering, There are two objections to B's recovering under the first claim, one being that Punishment is personal and intended to deter and reform, both of which objects would be frustrated were B permitted to recover the amount of the fine and costs from A, and the other that the penalty imposed is not a natural consequence of the breach of contract, and the loss is therefore, too remote. Some English cases draw a distinction between statutes imposing strict criminal liability irrespective of negligence, and statutes where liability is dependent upon negligence. According to the preponderance of English authority, B, cannot recover his fine and costs, or losses incurred to third parties, or damages for loss of trade or loss of reputation, if he has been guilty of negligence. Where B, has, however, been found criminally liable irrespective of negligence, the fine has been held to be recoverable from A, as a natural consequence of A's breach of contract.

Warranty.---The Court of Appeal has emphasised that in a case of breach of warranty the plaintiff cannot combine a claim for capital loss with a claim for loss of profit. A hypothetical case elucidates the position. If A sells B a heifer for pound 100/-, and warrants it a four gallon a day cow for the next five lactations, whereas in fact it is a one gallon a day cow worth pound 10/-, B can claim as damages either pound 90/-, or the loss of three gallons a day, but he cannot combine the two claims.

(n) A contracts to pay a sum of money to B on a day specified. A does not pay the money on that day . B, in consequence of not receiving the money on that day, is unable to pay his debts, and is totally ruined. A is not liable to make good to B anything except the principal sum he contracted to pay, together with interest up to the day of payment.

Delay in payment of money.---Settled law, but treated as anomalous. Illustration (n) to S. 73 "does not confer upon a creditor a right to recover interests upon a debt which is due to him, when he is not entitled to such interest under any provision of the law...As observed S. 73 is merely declaratory of the Common Law as to damages. "The law does not regard collateral or consequential damages arising from delay in the receipt of money." A gives an ijara patta of certain properly to B. It is a condition of the patta that B should pay to the superior landlord the rent which A was bound to pay to him. B fails to pay the rent. The superior landlord thereupon sues A for the rent, and, in execution of the decree obtained by him in the suit, the tenure is sold. B is not liable to A for the loss of the property, for A could have paid the rent on default by B, and saved the property from sale.

In the Privy Council, in an appeal from the Supreme Court of Palestine, held that loss, which was due to the impecuniosity of the plaintiff, was recoverable as being within the contemplation of the parties. P had agreed to sell land to H, and to pay him a fixed sum as liquidated damages if he defaulted. P later agreed to sell the same land to D, D agreeing to indemnify P against any claim by H P agreed to notify D of any such claim by H, and it was agreed that D was to appoint and pay the lawyers. H did sue P, who notified D, and the latter appointed lawyers. H recovered judgment by installments against P, and D paid the first installment. The remaining installments being unpaid, H sold other land belonging to P in execution at pound 2,883/- below its true value. D was held liable to P for this loss.

(o) A contracts to deliver 50 maunds of saltpeter to B on the first of January, at a certain price. B afterwards, before the first of January, contracts to sell the saltpetre to C, at a price higher than the market price of the first of January. A breaks his promise. In estimating the compensation payable by A to B, the market price of the first of January, and not the profit which would have arisen to B from the sale to C, is to be taken into account.

Note.---But a contract to resell at an advanced price is evidence, if not contradicted⁴³ of advance of market value.

(p) A contracts to sell and deliver 500 bales of cotton to B on a fixed day. A. knows nothing of B's mode of conducting his business. A breaks his promise, and B, having no cotton, is obliged to close Iris milk A is not responsible to B for the loss caused to B by the closing of the mill.

(q) A contracts to sell and deliver to B, on the first of January certain cloth which B intends to manufacture into caps of a particular kind, for which there is no demand, except at that season. The cloth is not delivered till after the appointed time, and too late lobe used that year in making caps. B is entitled to receive from A, by way of compensation, the difference between the contract price of fire cloth and its market price at the time of delivery, but not the profits which he expected to obtain by making caps, nor the expenses which he has been put to in making preparation for the manufacture.

A tailor, expecting to make large profits on the occasion of a festival that is to be held at a certain place, delivers a sewing machine and a cloth bundle to a railway company to be conveyed to that place, and through the fault of the company's servants they are not delivered until after the conclusion of the festival. The company had no notice of the special purpose for which the goods were required. The tailor is not entitled to damages for the loss of profits nor for his expenses incidental to the journey to that place and back, as such damages could not have been in the contemplation of the parties when they made the contract, nor can they be said to have naturally arisen in the usual course of things from the breach. If the company had known that the tailor wanted to use his goods for profit at the festival, it would be liable to him for the estimated loss of profit, and it would not be necessary for him to prove in detail what profit he expected to make; Simpson v. L. & N.W.R. Co^.

(r) A, a shipowner, contracts with B to convey him from Karachi to Sydney in A's ship sailing on the first of January, and B pays to A, by way of deposit, one, half of his passage money. The ship does not sail on the first of January, and B, after being in consequence, detained in Karachi for some time, and thereby put to some expense, proceeds to Sydney in another vessel, and, in consequence, arriving too late in Sydney, loses a sum of money. A, is liable to repay to B his deposit, with interest, and the expense to which he is put by his detention in Karachi, and the excess, if any, of the passage money paid for the second ship over that agreed upon for the first, but not the sum of money which B losts by arriving in Sydney too late.

This Illustration does not affect the rule as to measure of damages where the contract is for the sale of goods.

No notice of special circumstances.---Here, and in several of the foregoing illustrations, it is assumed that A has no defence to B's action on the contract; and in this illustration it seems to be assumed that A does not know B's particular reason for wanting to be at Sydney by a certain date. A contracts to sell by description to B sulphuric acid commercially free from arsenic. A does not know what B wants the acid for. B receives sulphuric acid from A tinder the contract, and uses it in producing a kind of sugar used by brewers. The acid is, in fact, not free from arsenic, the sugar manufactured with it is spoilt and useless, and B incurs liability to his customers, and the goodwill of his business is diminished in value and off, or goods of B's are spoilt by being mixed with this acid. B is entitled to recover from A only the price of the acid and the value of the goods spoilt.

Remedy provided by this section not the only remedy for breach of contract.---Where, under a contract of sale, the property in the goods has passed to the buyer, and the buyer wrongfully neglects or refuses to pay for the goods according to the terms of the contract, the seller may, at his option, either sue for the price of the goods or for damages for non-acceptance. The present section prescribes the method of assessing the damages, and it does not take away the right of a seller to maintain an action for the price where the property in the goods has passed to the buyer.

Damages may still be awarded even though precision cannot be arrived at in the calculation of the figure. Where a deed of dissolution of partnership between A. and B. imposed an obligation upon A to assist B to obtain a one quarter share of the quota allotted under Government licence to the partnership. A in fact opposed the granting of licence to B, and was held liable to B in damages, although the issue of the licence being within the Controller's discretion was only a possibility.

An important question that arises is whether there is liability for the direct consequences of a breach of contract, even though the extent of the damage was not foreseeable. In a famous Court of Appeal case, D hired P's ship under a charterparty and loaded some petrol in tins. During the voyage the tins leaked and there was inflammable vapour in the hold. At a port of call, a stevedore, a servant of D, carelessly allowed a plank to drop into the hold. There was an explosion and the ship became a total loss. D was held liable to P, although it was found as a fact that an explosion could not reasonably have been anticipated to follow from the fall of the plank. This case is generally regarded as an authority in the law of tort, although even in this sphere it has been criticised.

There was at one time considerable authority for saying that, as to damages which could not be foreseen without information of special circumstances, notice of any such circumstances at the time of entering into the contract would not suffice to make the defendant liable, but there must be in effect, if not in terms, an undertaking to answer for resulting special damages. It cannot be said that damages are granted because it is part of the contract that they shall be paid; it is the law which imposes or implies the term that upon breach of a contract damages must be paid.

So far as practicable, "a person with whom a contract has been broken has right to fulfill that contract for himself as nearly as may be, but he must not do this unreasonably or oppressively as regards the other party, or extravagantly." It is even his duty to take all reasonable steps to mitigate the loss consequent on the breach; and then the effect in actual diminution of the loss he has suffered may be taken into account, and this apart from the question whether it was his duty to act. The question must always be whether what was done was a reasonable thing to do, having regard to all the circumstances, and one test is "what a prudent person uninsured, i.e., not having a claim for compensation or indemnity on any one, "would do under the same circumstances". It is not a reasonable thing, for example to hire a special train to save an hour or so of time when there is no particular reason for being at one's destination at a certain hour; and expense so incurred cannot be recovered as damages. If a buyer disappointed of his goods can buy in the market at a sum equal to or less than the contract price, he has suffered no loss and can recover nothing.

As to the difference between contract and market price it may be regarded as an application of the principle as to the disappointed party's right to fulfill the contract himself at the defaulting party's cost, so far as it can reasonably be done; and on this very principle the rule is not literally applied in the case of an anticipatory breach by repudiation of the contract.

In the absence of any more specific rule applicable to the case, damages for the breach of a contract to perform any specified work are to be "assessed at the pecuniary amount of the difference between the state of the plaintiff upon the breach of the contract and what it would have been if the contract had been performed," not the sum which it would cost to perform the contract, though in particular cases the result of either mode of calculation may be the same.

Explanation to S. 73: "means which existed," etc.---This explanation has caused considerable difficulty in practice; the words "means which existed of remedying the inconvenience" have seemed obscure. No similar words are-known to occure in English authorities, but the framers of the Act appear to have had in view the class of cases where the damages recoverable for consequential expenses are limited by the test of what a prudent man might have reasonably done if the whole expense was to fall on himself. The words are also sufficient to cover the case of a party who omits to take natural and obvious means of diminishing the loss incurred by the other party's failure to perform his contract. It seems on principle that in such a case consequential damage which might have been avoided by the exercise of common intelligence and prudence is not recoverable; thus, if one has to replace goods that have not been delivered in time, and has recklessly or stupidly bought them at an excessive price, the seller in default remains chargeable only with the difference between the contract and the normal market price; and default in building a wall does not entitle the promisee to stand by doing nothing and then recover for loss which he might have prevented by reasonable diligence. Where a tenant who has promised to pay Government revenue and cess has failed to pay it, the landlord on notice of the intended sale of the property by Government should pay the arrears and save the property from sale. He is not entitled to stand by and allow the property to be sold and then after purchasing it to file a suit to recover the purchase price as damages from the tenant. The rule must, of course, be applied with discretion; a man who has already put himself in the wrong by breaking his contract has no right to impose new and extraordinary duties on the aggrieved party. That party can be expected only to use ordinary and reasonable diligence; much less can he be expected to warrant success where the result of diligent endeavour is in its nature doubtful. It has been held that the injured party is not obliged, even under an indemnity, to embark upon a complicated and difficult piece of litigation against a third party.

The duty to minimise damages may be removed by an express clause in the contract. P ought to have resold goods refused by D in May soon afterwards as the market was falling, but unreasonably waited until November. P was held to be protected by a clause in the contract authorising him in the event of breach of contract to resell at such time as in his uncontrolled discretion seemed desirable, and precluding an objection on behalf of the buyer that such resale was carried out after an unreasonable lapse of time. The duty may also be removed by the conduct of the defendant subsequent to the breach in insisting that he will shortly perform his contract.

At the beginning of the cotton season A, a cotton merchant, and Z, a millowner, agree that during six months Z shall put his mill at A’s disposal at a fixed rate in order to gin cotton, which A contemplates buying, and on his part agrees to procure and supply to the mill. Before A has supplied any cotton, and without any unreasonable delay on his part, Z repudiates the contract. A is entitled to recover damages from Z for his estimated loss of profit; he is not bound to buy and tender to Z's mill cotton which he knows would be refused.

Where a vendor of land guarantees his title to the purchaser, and the latter is evicted from his holding, he is entitled to recover the value of the land at the date of eviction, and not merely the purchase money paid for it. But in special circumstances, where the buyer in effect had notice of difficulties arising from an adverse claim, the High Court of Bombay held him not entitled to recover damages for loss of profit on a contract to re-sell at an advanced price. Similarly as to a vendor who has caused or materially contributed to the loss by his own fault, such as delay in answering requisitions.

Where the lessor commits a breach of a covenant to repair, the lessee may repair the premises and obtain damages, and it is not a condition precedent to recovery that he should actually have spent the money.

As a liability for loss of, or damage to, properly delivered to common carriers, see the Carriers Act, 1865; and as to the liability of a railway company, see the Railways Act, 1890.

Interest by way of damages.---The Interest Act, 1839, provides for the payment of interest by way of damages in certain cases. Under the Act the Court may allow interest on debts or sums certain which are payable by an instrument in writing from the time when the amount becomes payable where a time is Fixed for payment, or where no time is fixed, from that date on which demand of payment is made in writing giving notice to the debtor that interest will be claimed.

There have been numerous decisions, often conflicting, on the question whether interest could or could not be given trader S. 73, illustration (n), where it is not recoverable under the Interest Act.

Transferee with notice of agreement of sale---A agreed to sell certain shares to B, but subsequently sold them to C, who had notice of the previous agreement. B sued A and C for damages, consisting of the dividends paid on those shares. During the pendency of the suit, C transferred the shares to D. It was held that C could not avoid liability for damages by transferring the shares to D.

Breach of promise of marriage.---The analogy of the latitude allowed in England in assessing damages for breach of a contract to marry is not applicable to the breach of a promise made by the father of a Muhammadan girl to give her in marriage. All that the plaintiff is entitled to as against the father is the return of ornaments, cloths and other presents made by the plaintiff to the girl. The right to recover these is recognised by the Muhammadan law. Apart from that law the presents may be recovered under either S. 65 or this section.

The section applies only where a contract has been broken.---This would seem to need no proof or even statement, yet judicial affirmation of it has been necessary. A toll contractor who suffers loss in his income by reason of the discontinuance of the traffic, owing the plague regulations made by Government consequent upon the out-break of plague in the locality, has no cause of action against the Government to recover damages as on a breach of contract. There is no breach of contract involved in making the regulations; and one may add that such an action would not have been possible in any Western country. We fail to see how the pleader can have seriously thought he could make out a contract either actual or constructive between the plaintiff and the Government.

Constitution of Pakistan, 1973 Art. 185 (3). Breach of contract. Compensation for suit for recovery of damages and security partly decreed by Trial Court. Findings set aside in appeal and decree partly modified. Order impugned. Finding of High Court being based on proper appreciation of evidence on record, leave to appeal refused.

Breach of contract---Defendant/employer's right to terminate contract in lieu of one month's salary as per terms of contract repelled. Termination like engagement, held, was a matter of fact, both being motivated by exigencies of particular situation. Defendants could invoke terms of contract and serve plaintiff with notice of termination but instead defendants rescinded the original contract by unilaterally changing conditions of performance. Plea of resignation of plaintiff consequent upon change of his category of employment and plea of defendants that they had never exercised option of early termination of contract which they had a right to do now, repelled. Defendants, held, could not be permitted to take a somersault and bridge the breach by catching up the straw of termination clause.

Breach of contract. Default of payment of price of goods supplied. Order for supply of goods placed on plaintiff by contesting defendant, to be supplied at place of business of ex-parte defendant. Plaintiff performed his part of contract and demanded payment. Defendants failing to pay price for the supplied consignment. On plaintiff's suit for recovery of amount, contesting defendant taking plea that there was no privity of contract between him and the plaintiff. Liabilities of contesting defendant---Extent---Contesting defendant neither claiming in his letters written to plaintiff for supply of goods, that he was placing such order on behalf of ex parte defendant nor placing any document on record to show that in fact ex parte defendant had placed order which was conveyed by contesting defendant to plaintiff. Use of words "our company" by contesting defendant in one letter and describing such company as "his associate" in another letter, held, would indicate that contesting defendant was not an indenting agent but was associate of ex-parte defendant on his own admission. In absence of any clarification by using the words "our order", manner in which instructions regarding quality, quantity and mode of payment had been given by contesting defendant there would be no doubt left that plea of such defendant to be a mere indenting agent was an after thought. Privity of contract between plaintiff and contesting defendant thus, was proved on record.

Plaintiff claiming on account of supply of goods. Such amount was payable on 60 days sight drafts drawn on Defendant No. 2. Defendant No.1 contending that there was no privity of contract between him and the plaintiff and as such the claim against him was baseless. Held: Such contention repelled and suit decreed to the extent of cost of consignments.

Earnest money deposited by purchaser---Breach of contract---Forfeiture of earnest money not always ordered---Compensation may be determined on facts of case. Where no evidence was available as regards the rate on the date of breach, the rate prevailing on the next nearest date is to be taken into consideration for the purpose of assessing damages.

No evidence as to price of goods on date or near date of breach---Damages cannot be calculated. Where there was no evidence to prove the market price of goods on or near the date of breach of contract. Held: It is not possible to determine the difference between the market rate and the agreed price and that damages cannot be determined in this case.

No evidence adduced to determine damages---Damages not awarded---Interest on earnest money allowed. Where the seller did not adduce any evidence as to damages suffered by him. Held: There is no material on the record to enable the Court to make any assessment of damages. In the absence of this evidence, the Court can award to the plaintiff only interest on earnest money from the date of the agreement.

To claim interest as damages the case should be brought within section 73, that is, the plaintiff should show on evidence that he is entitled to such compensation for any loss or damage caused to him in the natural course of things from breach of contract on the defendant's part. As there was no evidence on the point, interest was not granted.

Sale of goods Contract for---How damages on breach may be calculated. A plaintiff who sues for damages owes the duty of taking all reasonable steps to mitigate the loss consequent upon the breach and cannot claim as damages any sum which is due to his own neglect. But the loss to be ascertained is the loss on the date of the breach. If on the date the plaintiff could do something or did something which mitigated the damage, the defendant is entitled to the benefit of it. If the seller holds on to the shares after the breach, the speculation as to the way the market will subsequently go is the speculation of the seller, not of the buyer, the seller cannot recover from the buyer the loss below the market price on the date of the breach if the market falls, nor is he liable to the purchaser for the profit, if the market rises.

Special and general damages---Distinction when general damages are awarded.---General damages with reference to proof "are such as the jury may give when the Judge cannot point out any measure by which they are to be assessed, except the opinion and judgment of a reasonable man. Special damages are given in respect of any "consequences reasonably and probably arising from the breach complained of. This type of general damage is usually concerned with non-pecuniary losses, which are difficult to estimate, the principal examples being injury to reputation in defamation and the pain and suffering in cases of personal injury. Pecuniary loss is also occasionally general damage within this meaning, both in tort and in contract. In tort there is the loss of business profits caused by the defendant's inducement of breach of contract or passing off, while in contract there is the injury to credit and reputation caused by the defendant's failure to pay the plaintiff's cheques or honour his drafts, pecuniary loss which it is difficult to estimate at all accurately.

Breach of contract---Quantum of damages, how calculated.---Under section 73 the plaintiffs can get compensation for such loss or damage as was caused to them by the commission of the alleged breach and which naturally arose in the usual course of things or which the parties knew, when they made the contract, to be likely to result from the breach. But they cannot claim remote or indirect damages.

Contract to supply about 1,00,000 tons of rice---Only 37,000 tons supplied---Breach of contract. The word "about" is used in connection with quantity, the consensus of judicial opinion is that the deviation from the contracted quantity should not be too large. In some cases this deviation has been restricted to three per cent, and in other cases to five per cent. But in the case before me, the deviation from the contracted quantity of 1,00,000 tons is, to say the least, very large, that is only 37;000 tons were actually delivered by the defendants to the plaintiff and therefore the defendants were guilty of a breach of contract.

Damages for breach of contract---Opposite party must prove his readiness and willingness to performance all the time. The fact that the appellants had been guilty of breach of contract would not absolve the respondents to establish that they were always ready and-willing to perform their part of the contract. In law, unless this fact is proved, a party is not entitled to claim any damages.

Building contractor substituting his plan .for one supplied by owner. New plan changed further---Building constructed found defective---Contractor is not entitled to any payment. Where the appellant (building contractor) substituted his own plan for the plan of the owner. But the building so constructed was found to be entirely defective. The contractors, however, sued for payment and it was argued that as the respondents were using the factory, presumably, after making modifications in the constructions; they should, therefore, pay the price of that much work which has been utilised by them after removing the defects. Held: The appellants were not entitled to any payment, not even to a quantum meruit.

Contract repudiated before date of performance---Date of breach is the date fixed for performance of contract---Damages may be calculated on market price on that date. Where the seller repudiates the contract on a date earlier than the date fixed for performance of the contract. The anticipatory communication of the intention not to perform the contract is a proof of the breach, but the measure of damages is the difference between the contract price and the market price prevailing on the date on which the contract was to be performed, because the breach actually takes place on that date even if the intention to commit it had been communicated earlier.

Contract repudiated before date fixed for performance. Suit filed taking date of repudiation as date of breach of contract. Plea that date fixed for performance was the date of breach not allowed to be taken in appeal. Where in a suit for damages, the plaintiff and the defendant both wrongly assumed the date of the cancellation of the contract by the defendant to be the date of breach and not suspecting that their assumption was wrong claimed no issue with respect to the correct date of the breach of contract: Held, the defendant, in appeal against the decree passed against him, cannot be allowed to take advantage of the omission of the plaintiff to produce evidence of the market price prevailing on the date of actual breach, viz. the last date on which contract was to be completed, because that would amount to taking advantage of the absence of certain evidence which the plaintiff could not think of bringing on the record at the trial of the suit.

Unlawful dismissal from service---Dismissed person must do all he can to mitigate damages. Quantum of damages payable. In determining reasonable compensation a Court of law shall have to take into consideration the means available to a party to mitigate the damages. But the fact that a party failed to utilise such opportunity would not necessarily absolve the party at fault from his liability under the contract. It would be for consideration in each case whether any such opportunity was not accepted for good and reasonable grounds.

A servant complaining of wrongful dismissal from service cannot rest content by merely putting forward a claim for recovery, in lump sum and in advance, of the entire amount of anticipated salary covering the whole period for which he expected to continue in service. The law which recognises his right to recover damages for wrongful dismissal imposes a corresponding duty on him to do all that is possible to mitigate such damages. He is bound to act in that direction not only in his own interest but also in file interest of the opposite-party against whom he has to sustain an action for damages. He has to use due diligence in endeavouring to obtain suitable employment with wages approximating that which he was getting in the service from which he was dismissed, even though he is not expected to accept a fresh engagement in a lower status. The possible chance of obtaining a suitable employment elsewhere has to be taken into account in assessing the measure of damages to be awarded to the plaintiff.

Wrongful dismissal from service---How damages may be calculated.---In disputes arising between master and servant ordinarily the measure of damages would be determined according to the covenants in the contract. But the party at fault would be entitled to claim the exclusion of any earning made by the servant during the period for which damages are claimed on the possible chance of obtaining a suitable appointment elsewhere.

Criterion for calculating damages laid down in contract---Calculation with reference to market price not proper.---Where a particular criterion is available that should form the basis of the damage and not the market price.

Contract providing for purchase of goods by purchaser from market on failure of contractor to supply goods of approved quality---Excess price paid to be recovered from contractor---Breach of contract---Price paid for goods far above control price on date of breach---Damages not granted. Where there was a stipulation in the contract that in event of failure to supply required item of specified quality, officer operating the contract shall be at liberty to procure it from any quarter and excess cost so incurred over contract price shall be recoverable from the contractor. On the failure of the contractor to supply goods of specified quality, the goods were purchased from the market without calling for tenders and the difference between contract price and extra money paid was sought to be recovered as damages. Held: The Army authorities made no efforts in getting the supply of risk purchases on control rates or at the rates reasonably above the control rates. Without the authenticity of the rates of the risk purchases, the risk purchases on fancy prices which were more than double the control prices could not be justified. Therefore damages were refused.

Delivery of contracted goods---Buyer must call for delivery---Burden of proof. In case of a contract for delivery of goods, it is for the buyer to call upon the seller to deliver the goods. Therefore burden was upon the defendant to prove that they made the demand for the delivery of the contracted goods.

Damages for breach of contract of sale of goods.---Calculation of. In case of breach of contract damages are the difference between contracted rate and the rate prevailing on the date of breach. Where no evidence was available as regards the rate on the date of breach, the rate prevailing on the next nearest date is to be taken into consideration for the purpose of assessing damages.

No evidence as to price of goods on date or near date of breach---Damages cannot be calculated. Where there was no evidence to prove the market price of goods on or near the date of breach of contract. Held: It is not possible to determine the difference between the market rate and the agreed price and that damages cannot be determined in this case.

No evidence adduced to determine damages---Damages not awarded---Interest on earnest money allowed. Where the seller did not adduce any evidence as to damages suffered by him. Held: There is no material on the record to enable the Court to make any assessment of damages. In the absence of this evidence. the Court can award to the plaintiff only interest on earnest money from the date of the agreement.

Even to claim interest as damages the case should be brought within section 73, that is, the plaintiff should show on evidence that he is entitled to such compensation for any loss or damages caused to him in the natural course of things from breach of contract on the defendant’s part. As there was no evidence on the point, interest was not granted.

Sale of goods---Contract for---How damages on breach may be calculated.---A plaintiff who sues for damages owes the duty of taking all reasonable steps to mitigate the loss consequent upon the breach and cannot claim as damages any sum which is due to his own neglect. But the loss to be ascertained is the loss on the date of the breach. If on the dale the plaintiff could do something or did something which mitigated the damage, the defendant is entitled to the benefit of it. If the seller holds on the shares after the breach, the speculation as to the way the market will subsequently go is the speculation of the seller, not of the buyer, the seller cannot recover from the buyer the loss below the market price on the date of the breach if the market falls, nor is he liable to the purchaser for the profit, if the market rises.

Special and general damages---Distinction---When general damages are awarded. General damages with reference to proof "are such as the jury may give when the Judge cannot point out any measure by which they are to be assessed, except the opinion and judgment of a reasonable man. Special damages are given in respect of any consequences reasonably and probably arising from the breach complained of. This type of general damage is usually concerned with non-pecuniary losses, which are difficult to estimate, the principal examples being injury to reputation in defamation and the pain and suffering in cases of personal injury. Pecuniary loss is also occasionally general damage within this meaning, both in tort and in contract. In tort there is the loss of business profits caused by the defendant’s inducement of breach of contract or passing off, while in contract there is the injury to. credit and reputation caused by the defendant's failure to pay the plaintiff's cheques or honour his drafts, pecuniary loss which it is difficult to estimate at all accurately.

Breach of agreement---Limitation for suit. Since the suit was for damages for breach of a contract, which was not a registered one, it is governed by Art. 115 of the Limitation Act, 1908. The said Article prescribes a period of limitation of three years commencing from the date of the breach of contract and in the case of successive breaches, the limitation is to commence from the date of the last breach.

Breach of contract---Contract rescinded by other party---Arbitration clause does not become unenforceable.

Breach of contract---Compensation can be awarded for loss directly flowing from breach---Mere general assertion of loss not sufficient for grant of damages. A party who suffers by the breach may claim compensation for any loss or damages caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it." Such compensation is not, however to be given "for any remote and indirect loss or damage substained by reason of the breach." Mere general assertions were by no means sufficient to establish that the loss flowed directly as a consequence of the breach.

Repudiation of liability by carrier---Time is not extended for bringing suit for damages.

Purchaser taking subject to condition of warranties---Breach of warranty discovered after conveyance---Purchaser entitled to be compensated in damages.---Held: Why should a purchaser who has taken conveyance of a property on basis of warranties contained in sub-section (2) of section 55 of the Transfer of Property Act, lose his right to compensation for a breach of this warranty discovered after a conveyance? If the purchaser did not contract to take a defective title he cannot in principle be denied the right to rescind the conveyance or claim compensation for loss occasioned to him, merely because the seller was innocent, for the law will not be found wanting in giving relief to an equally if not more, innocent purchaser.

Delay in execution of work not caused by act of defendant---Work by contractor delayed by stay obtained by third party---Defendant not liable for damages.

Money withheld---Interest cannot be paid by way of damages.

Stipulation not expressed in contract---Not to be taken as implied---Exception to rule. A stipulation not expressed in a written contract should not be implied merely because the Court thinks that it would be a reasonable thing to imply it. Such presumption can be made only if, on a consideration of the terms of the contract in a reasonable and business like manner, the Court is satisfied that it should necessarily have been intended by the parties when the contract was made.

Buyer refusing to accept delivery---Measure of damages to be awarded. The rule applicable to the computation of damages, where the buyer wrongfully neglects or refuses to accept and pay for the goods, is now well established. It is that where there is an available market for the goods in question, the measure of damages, in general, is the difference between the contract price and the market price prevailing on the date, of breach of the contract.

Loss of profits due to breach of contract---Fair estimate of damages for breach of contract. Where a sum of Rs. 1,35,823 represented the loss of profits which the party would have earned if the contracts had not been cancelled. Held: Loss of profits which the supplier could reasonably have been expected to earn may well, in such circumstances, be treated as a fair measure of compensation for the breach.

Party not taking immediate steps to mitigate loss---Liable for the loss ensuing therefrom.

Goods of different quality than contracted supplied---Buyer may refuse to take delivery---damages may be claimed as if no delivery was offered. Held: If the goods offered are different in quality from those contracted for, or do not conform to the contracted description, or if any condition, express or implied, of quality be broken, the buyer has the right to refuse them. A defective delivery stand on the same footing as a non-delivery, and the buyer is entitled to recover damages accordingly.

Carriage of goods, contract for---Time may be extended before delivery is completed. The carrier can always extend the time for the performance of the contract of affreightment, and similarly the parties can also enter into a fresh contract for the delivery of the cargo shipped, but this is possible only as long as delivery has not been completed.

Extension of limitation by contract. Void a period of limitation cannot be extended by agreement.

No time fixed for performance of contract---Contract may be performed within reasonable time---Reasonable time, determination of. Where the agreement between the parties did not specify the date on or period within which the contract was to be performed, it was required to be performed within a reasonable time. What is "reasonable" time must necessarily depend upon the facts and circumstances of each case, including in the case of a commercial contract for the sale of goods, the usage of the trade, the nature of goods, the place and mode of delivery and whether the goods are already available with the seller and in a deliverable state or have to be manufactured or acquired by the seller or put in a deliverable state.

Breach of contract for sale of goods---Damages may be claimed on basis of difference of re-sale price and contract price.---Under S. 73, a party to a contract of sale of goods, on its breach is entitled, from the other party to damages on the basis of difference between the contract rate and the market rate on the date of the breach. Therefore, where the plaintiff has claimed damages on the basis of difference of re-sale price and contract price which is less than the market rate on the date of breach they are entitled to the same.

Party not fulfilling obligations under contract---Cannot claim relief on ground of equity. Where a party was handed over possession of Mills subject to certain conditions to be fulfilled by him, But he did not fulfill them deliberately. He cannot contend that as he had invested huge amount in the Mills he should not be deprived of its possession on equitable grounds.

Breach of contract by defendant---Duty of plaintiff in the matter. It is the duly of the plaintiff to take all reasonable steps to mitigate the loss he has sustained consequent upon the wrongful act in respect of which he sues. He cannot claim as damages any sum which is due to his own neglect, but he is under no obligation to require himself, into his character, his business or his property, to reduce the damages payable by the wrong-doer. The question what is reasonable for a plaintiff to do in mitigation of his damages is not a question of law, but one of fact in the circumstances of each particular case, the burden of proof being on the defendant.

Contract of sale goods---How damages are determined.---The quantum of damages is to be determined by comparing the market prices of the goods prevailing on the date on which the goods had to be supplied with the contract prices and not the contract prices with those prevailing on the date of the renunciation of the contract.

Damages for breach of contract---Interest when payable on the sum payable as damages. Where on account of breach of contract by a contractor of the Municipality the latter made arrangements to collect the fees departmentally and thus suffered a loss over the money payable by the contractor. It claimed the loss suffered as damages and also interest on the sum.

Held; Interest can be allowed only if it was payable under the terms of the contract. As that was not a clause of the contract, interest was not paid on it.

Lease---Breach of contract---When the other party might sue for damages---Waiting after repudiation---Effect. The repudiation of the contract by one party does not of itself discharge the contract. The other party has the option of treating the contract as at an end, or of waiting until the time for performance has arrived, before making any claim for breach of contract. Of course the right of election must be signified, to rescind the contract forthwith, in an unqualified manner and with every reasonable despatch. If an injured party elects to wait, he remains liable to perform his part of the contract, and enables the party in default not only to perform the contract not withstanding his previous repudiation of it, but to take advantage of any supervening circumstances which would justify him in defaulting to perform.

Breach of contract---Notice for cancellation not necessary but should be given where breach can be remedied.---It is true that there is no principle of natural justice involved in cancelling the contracts for an alleged breach, but it is also a settled principle that where a particular breach in a contract can be remedied without any corresponding injury to any person, a reasonable notice should be given to remedy it.

Damages for breach of agreement of sale. Difference between contract price and market price on date of breach granted. Damages in case of breach of contract may be claimed on the basis of difference between the contract price and the market price on the date of the breach of contract. The market price on that date may be determined by reference to the Register of a witness recording actual transactions on that date.

Where a seller of goods commits a breach, the buyer is entitled to damages upon the basis of the difference between the contract price and the market price, of the goods in question on the date of breach. This is so because the buyer has to be put in the same position in which he would have been fulfilled and upon a breach by the seller he can go to the market and buy the goods on the prevailing market rate. This, of course, assumes that the goods are such Which are available, conversely when the buyer commits a breach and fails to accept and pay for the goods, the seller would be entitled to damages based upon the difference of the contract price and the prevailing market price on .the date of the breach, because he can take his goods to the market and sell them at the ruling price.

Damages for breach of contract---Market price may not be determined on basis of demands of parties. Where damages for: breach of contract of sale are to be granted on the basis of difference between the contract price and market price, statements in correspondence varying the figure from time to time and communicating for the purposes of determining the amount which was being demanded by the seller in compensation of their loss resulting from the refusal of the buyers to accept the goods, cannot form a sound basis for determining the market price.

Damages for breach of contract of sale of goods---Calculation of---No market for goods at the place where breach occurred---Damages cannot be calculated as difference between contract price and market price. The general rule that in case of a breach of contract of sale, the damages may be calculated as the difference between the contract price and the market price does not apply in a case where there is no market for the goods at the place where breach occurred.

Damages---No evidence of actual damages suffered by plaintiff---Court may itself ascertain actual damages. If in a suit for damages the Court finds in favour of the plaintiff that there was a breach, then simply because the plaintiff had not "given sufficient evidence to show certain details of damages, it is not proper to grant only nominal damages. In such a case the Court may itself ascertain the actual damages and decree the same.

Estimation of damages for loss on breach of contract---Principle stated. While estimating the damages to be allowed for breach of contract, the court must keep in mind the principle that the plaintiff must mitigate loss and that he must take reasonable steps to mitigate loss.

Interest---Sum allowed as damages for breach of contract---Whether interest may be allowed on such sum. Generally in the absence of an express or implied contract to pay interest or of usage of trade, interest cannot be allowed on damages for breach of a contract.

Penalty for breach of contract stated in contract---No provision in contract for damages on basis of loss in resale---Damages cannot be recovered. Where in a contract of sale by the Government, penalties in case of breach of contract Were stated but there was no stipulation for resale of goods at the risk of the purchaser. It was held that though the Government could impose the penalties provided in the contract yet it could not sue the purchaser for damages for breach of contract on the ground that the Government had suffered a certain loss on resale of goods at the risk of purchaser.

Snits for specific sum due on contract---Decree for damages for breach of contract cannot be passed.---Where it was contended that though the suit was for a specific sum of money due on the basis of a contract, yet the Court could grant a decree for damages for breach of contract.

Held: Such a specific relief could not be granted to him as a general or other relief, for, a plaintiff cannot ask for a specific relief of a different description unless the facts and circumstances alleged on the pleadings will consistently maintain that relief as well. The High Court was, therefore, right in asking the appellant to amend his plaint if he so desired, but since that opportunity was not availed of in that Court, the appellant cannot be allowed this facility in the Supreme Court not only because such a sub for damages for breach of the contract of 1944 would now be clearly barred by time but also because the right itself of the appellant to claim such damages is not free from doubt.²⁰

Time for delivery of goods extended by party---Delivery received within extended time---Liquidated damages cannot be claimed. Where the goods were not delivered by the contractor within the time stipulated but time was extended by the other party and delivery was taken within the extended time. Held; that the party by extending the time for the delivery to be made by the contractors and by accepting the delivery had thereby given up its case for liquidated damages.

Breach of contract---Date of performance is the date of breach of contract. Ordinarily in a contract for sale of goods the dale of the breach of the contract is the date when the contract ought to have been fulfilled but was not and not the date of the refusal of the liability or repudiation of the contract.

Breach of contract---Goods to be supplied in November in bags to be supplied by the buyer---Bags supplied on November 30th---Breach on the part of purchaser. The respondent had to supply the bags in which the appellant was to supply corn. He supplied the bags on 301h Nov. The corn was not delivered in November. Therefore the respondent brought a suit for breach of contract.

Held: It is manifestly clear that the respondent did not supply the gunny bags for the contract within a reasonable time in order to enable the appellant to fulfill their part of the contract to supply the goods within the month of November.

Breach of contract---Damages---Respondent admitting to supply goods up to time extended by applicant---On breach of contract applicant, held, entitled to damages calculated at market price prevailing on date up to which time extended.

Interest, payment of ---Defendant contracting to make payment at different stages of work executed by plaintiff but not making payment on contracted dates---Case, held, covered by illus (n), S. 73, and plaintiff entitled to interest in circumstances of case---Case, a mere detention of debt---Plaintiff not entitled to interest till date of suit in absence of contract to pay interest.

Contract based on fraud and misrepresentation---Repudiation justified even when original ground of repudiation untenable.--Where the repudiation was made on the ground that the supply was delayed. But that ground was found to be untenable. The repudiation may still be justified by the defendant Company on the ground of fraud and misrepresentation even if the original ground of repudiation is found to be untenable or erroneous.

Damages claimed by plaintiff---More than what is claimed cannot be granted.

Damages---Entitlement---Suspension and termination of plaintiff's appointment as tally contractor---Stoppage of collection of ships for tally work---Such action by defendant being unlawful, damages suffered by plaintiff on account of non-allocation of ships and arbitrary action on part of defendant, held, would entitle plaintiffs to compensation thereof.

Time ordinarily essence of contract involving transaction of immovable property---True intention of parties can be gathered from terms of contract and facts and circumstances of case---More mention of time in contract for its performance, held, does not necessarily mean that time was of essence.

Breach of contract of sale goods---Assessment of damages---Principles indicate that aggrieved party is entitled to actual damage or loss suffered by him---Parties, at time of making contract, knowing quantum of loss or damage likely to result from breach of contract---Held, guilty party in such case, would be liable for such loss.

Breach of contract---No breach of contract committed by respondent transferor in respect of terms of transfer of land---Applicant hence, entitled to force any other terms on respondent---Subsequent decision reducing rate price being applicable to allotments made after allotment of plots to applicant, reduction of rate, held, applicable to future transactions and not to applicant's transaction.

Postponement or extension of time for unspecified period---Meaning of---Extension is for a reasonable time---When breach is said to occur after extension. An agreement to postpone performance for an unspecified time operates as an extension for a reasonable time and consequently the date to be taken must be a date at which there appears to be a failure or refusal to perform.

Suit for breach of contract---Where may be filed. The suit on a breach of contract can be filed at any place where the contract should have been performed in whole or part and even in so far as the price of goods in the present case was payable at Karachi, the Karachi Courts would have jurisdiction to entertain the suit.

Frustration of contract---How determined. The question whether frustration of contract occurs or not depends on the nature of the contract and on the events which have occurred. Therefore in each case the question for consideration will be, "what was the common intention and a common purpose for entering into a contract and whether that purpose and intention has been frustrated by supervening circumstances" and it is not permissible for a Court of law to imply a term which is not consistent with the express terms of the contract merely on the ground that parties being reasonable men must be deemed to have provided for a particular event.

Forfeiture of earnest money---Sale of land---Only actual loss on re-sale may be forfeited. Where the vendors were guilty of breach of contract and consequently the vendee was entitled to forfeit the earnest money paid by them. The Court held that she should not forfeit all the money paid by them but only as much of it, which should make up the loss suffered by her on account of the breach of contract. Therefore, where she sold the land to another party at a lesser price, she was allowed to make up the loss from the earnest money deposited by the earlier vendees and to refund the balance.

Breach of contract---Writ does not lie to enforce contract. A mere breach of contract or failure to honour an obligation arising out of such a contract cannot be enforced in the jurisdiction conferred on High Court by Art. 98 of the Constitution.

Breach of contract---Damages payable in foreign currency---Calculation of---Must be paid in that currency and not in bonus vouchers. Where damages for breach of contract were to be paid in foreign currency. Held: A debt involving foreign exchange can only be repaid at the rate of exchange prevalent in this country at the time when the debt became due. Bonus vouchers are neither the currency nor legal tender of this country nor can they be termed the official rate of the country. Therefore the debt cannot be repaid in bonus vouchers.

No averment in plaint that plaintiff was ready and willing to perform his part of the contract---Suit not defective. Express averment in the plaint, in a suit for specific performance, of the plaintiff’s readiness and willingness to perform his part of the contract is the invariable practice of pleading, and a desirable practice, designed to give a clear and express notice to the opponent of the case sought to be made out. But it cannot be said that this is a rule of law which would render the structure of the suit itself defective or that without it a proper cause of action Would not appear on the plaint.

Specific performance of contract---When ordered. The dominant principle in such cases has always been that equity will only grant specific performance, if under all the circumstances, it is just and equitable so to do.

Suits for specific performance of contract of sale and for possession---Separate causes of action---Both reliefs cannot be claimed in one suit.---A suit for specific performance and a suit for possession have distinct causes of action and they cannot be treated as one nor one can be amended into the other.

Assessment of damages---Defendant agreeing to sell cotton to plaintiff but on breach of contract by defendants, plaintiffs purchasing cotton from another seller and paying price higher than controlled price---Held, prices fixed and controlled under law to be taken into consideration for purposes of performance of contract as well as for purpose of assessment of damages in case of breach of contract. Transaction between subsequent seller and plaintiff being in contravention of law no damages could be claimed or assessed on basis of difference in prices between original contract and illegal contract.

S. 73 read with Sale of Goods Act (III of 1930), S. 56---Damages---Measure of---Appellant entering into agreement with respondents to buy goods for export to foreign country---Appellants neglecting to accept and pay for major portion of goods---Difference between export price at time of breach of contract and contract price, held, formula applicable for determining quantum of damages.

Breach of contract---Damages---Special Leave to appeal to Supreme Court---Damages already paid by appellants to other party, reasonable and in no way excessive. Amount paid as far back as far years ago. Case, in its peculiar circumstances, held, not fit for examination of question of damages. Order granting leave to appeal recalled---Constitution of Pakistan (1973), Art. 185 (3).

Breach of contract---Short landing certificates---Short landing certificates containing qualification 'said to be' short landed---Supports submission of M.S. Bars being neither weighed nor counted---Legitimate inference drawn from such documents; Bundles neither weighed nor counted at time of discharge and goods discharged not in accordance with marks and packing indicated in Export General Manifest---Large quantity of goods found in loose condition at jetty not examined for purposes of identification. Such fact, held further, deprives short landing certificates of their conclusive nature and survey report prepared at consignees’ premises could have no material bearing on question of quantity of goods actually shipped.

Breach of contract---Measure of damages in case of breach of contract to sell goods ordinarily; Sum by which Contract price falls short of price at which purchasers might have obtained goods of like quantity at time and place where such goods should have been delivered---Repurchase of goods, time for agreement not providing time within which repurchase should be effected. Repurchase to be completed within a reasonable time. Belated claim, held, cannot be made basis for recovery of damages.

Contract---Breach of---Damages---Entitlement for---Amount of damages---Held: Contractor is entitled to claim damages on basis of expected profit on balance of contract work and amount of damages depends upon facts of each case.

Sale of Goods Act (III of 1930), S. 54, Arbitration Act (X of 1940), S. 30 (a) (b) (c), Breach of contract. Resale of defaulted goods by seller---Damages---No notice under S. 54, Sale of Goods Act, 1930 served by seller on buyer---Clause of agreement permitting imposition of penalty of forfeiture of amount deposited with seller to meet storage, supervision. service and "other charges" as well as termination of Contract---No stipulation for award of damages either result of goods or otherwise provided in said clause---Seller claiming damages on basis of clause of agreement under head "other charges" and contending before Court that award could be remitted to arbitrator to determine damages on basis of market price, as admittedly no notice trader S. 54, Sale of Goods Act, 1930 was served on buyer before resale of goods defaulted. Held, clause of agreement was exhaustive of all contingencies following breach of agreement and no provision with regard to damages was made in agreement. Damages under head of "other charges", therefore could not legally be awarded by Arbitration in circumstances. Arbitrator was not competent to import an agreement for award of damages when none in fact was provided for or existed in agreement itself.

Specific Relief Act (I of 1877) S. 12. Contract for purchase of vessel for scrapping. Plaintiffs entering into contract with defendants for purchase of ship for scrapping purposes, price of vessel agreed to be paid by plaintiff by means of letter of credit. Defendants making no grievance about letter of credit as to not being in accordance with agreed terms in their communication with plaintiffs nor when letter of credit opened by plaintiff and vessel sent at port. No complaint made by defendant about letter of credit even after informing plaintiffs that vessel was ready to be delivered to them. Defendants for first time making a reference about it in their cable, sent to plaintiff long after, wherein also no specific mention made about relevant clause; in letter of credit---Held. if letter of credit was not in order and there was a material discripancy, there was no occasion for defendants to inform plaintiffs that vessel was going to be delivered to them, instead they would have certainly informed plaintiffs about that discrepancy had there been any objection of defendants, that letter of credit opened by plaintiffs was not in accordance with agreed terms, repelled, in circumstances.

Amount of damages not satisfactorily proved or established by plaintiff. Plaintiff, held, was not entitled to damages. Nominal damages, however, were awarded in circumstances of case.

Contract for collection of Octroi duty come into existence on offering the highest bid by contractor and acceptances by officer concerned and further by allowing him to start collection of duty. Such contract not subject to approval of Commissioner under law. Held, that valid contract of collection took place between parties on acceptance of highest bid in auction.

Amount of damages recoverable is governed by extent of actual damage sustained in consequence of breach of contract. In case of admission of proof of such damage, amount must be established with reasonable certainty. Damages in order to be recoverable must be appreciable capable of being stated and of being established. Onus is on plaintiff to produce best evidence to prove damages. His failure to do so would justify raising of every presumption against him. Held: In instant case plaintiff on basis of evidence produced by him had failed to prove that he had suffered any actual loss by breach of contract. High Court allowing RFA and dismissing suit after reversing trial Courts finding on issue whether plaintiff was entitled to claim amount of damages.

Breach of contract---Contract broken by Political Agent in wrong manner. Held: Damages caused to other party by such breach to be competently claimed by him. Held further: Amount of damages recoverable to be governed by extent of actual damage sustained in consequences of breach---In case of admission of proof of such damages, amount must be established with reasonable certainty and damages must be appreciable, capable of being slated and of being established. Onus in suit for recovery of damages for breach of contract being on plaintiff, by producing best evidence to prove damages, every presumption to be made against him (in case of his failure to do so).

Breach barter of contract. Loss sustained by party as a result of breach by other. Onus would be on plaintiff to establish by evidence the difference between value of his goods that he had to supply and value of goods that he had to receive in exchange a date of breach.

Contract---Breach---Damages---Interest---Contract between Government and private party---Government though repudiated contract by denying its liability but did not cancel same---Fraud and collusion was pleaded for the first time in written statement although much correspondence was exchanged between parties before case came to Court. No evidence was led at trial in support of allegations of fraud and collusion and Courts below concurrently held against Government. Suit remained pending for about 12 years before it could be decided. Since claim of plaintiffs suit was for an unascertained sum, as damages for breach of contract, which had to be determined by Court, there would, held, be no justification to burden Government with payment of interest when he did not know what their liability in terms of money as principal amount towards damages was---Once Court determined a sum certain and passed a decree, plaintiff being deprived of amount due and payable to them on that date, was required to be compensated by award of interest.

Contract between Government and private party---Validity---Official document---In absence of any evidence to the contrary official document is sufficient to prove that contract was duly sanctioned and approved, for presumption in law was that official document was issued in official course of business.

Contract---Breach of---Damages for--Quantum of---Determination of---Market not available to ascertain price of contracted tubings alongwith special coupling at relevant time---Held: Loss in relation to use of such contracted tubings must be deemed to be within contemplation of parties at time of contract---Held further: Evidence of subsales produced by plaintiff as to market price of goods in absence of available market for goods of description under contract to furnish valid basis for determining quantum of damages.

Damages---Principles to be followed when there is no available market to ascertain price of goods at time of breach of contract---Court would not be justified in resolving question of damages in such cases by applying rule of thumb after refusing to accept evidence of resale of goods produced by plaintiff---Held: (i) Evidence of sub sales produced by plaintiffs in instant case as to market price of goods in absence of available market for goods of description under contract furnished a valid basis for determining quantum of damages---(ii) High Court fell in error by determining quantum of damages on basis of rule of thumb.

Loss recoverable by aggrieved party---Defaulting party would be liable to compensate aggrieved party for imputed as against actual knowledge of loss likely to result from breach of contract.

Contracts--Breach of---Damages caused by---Compensation for---Assessment of---Held: Compensation for loss and damage caused to aggrieved party by alleged breach naturally arising in usual course of thing or which parties knew when they made contract to be likely to result from breach to be (legally) recoverable under S. 73 of Contract Act---Remote or indirect damages, however, not to be taken into account---Held further: Amount of damages recoverable to be governed by actual damage sustained in consequences of defendant's act---In cases admitting proof of such damages amount must be established with reasonable certainty---Absolute certainty, however, not to be required nor in all cases direct evidence as to amount to be necessary.

Contract---Breach of---Damages for---Goods---Value of---Ascertainment of---Market not available to ascertain price of goods at relevant time for type of goods (involved in case)---High Court in working out value of goods resorting to pure guess work by completely ignoring evidence produced by plaintiffs as regards market price---Held: Market price though not exact measure of value, same to provide some tangible basis for reaching conclusion as to value of goods---Held further: No principle of law having been invoked, Judges of High Court fell into error in confining their consideration to actual knowledge of consequences of breach by defendant.

Breach of contract, responsibility for---Determination of---Letter of resignation by plaintiff set up as a bar to breach of contract on part of defendants---Effect---Where letter of resignation was procured by defendants after violating original contract of employment of plaintiff by pressing him to do a job other than the one and inferior in status to the job for which he was employed, defendants, held, had already broken the contract and refusal of plaintiff to work whether through resignation or otherwise could not be said to be unjustified.

Breach of contract---Damages for---Claim for overtime work and leave salary whether sustainable---Claim for overtime and leave salary being too remote and anticipatory and as claim for such emolument would depend on chance and uncertain opportunities, same held, could not be entertained.

Breach of contract, proof of---Plaintiff taken abroad by defendant establishment .in the category of mechanic--.Plaintiff’s category of employment changed in breach of terms of contract and his salary reduced---Plaintiff left employment and on return back to country filed suit for damages for breach of contract---None of the persons who allegedly changed the card and category of employment of plaintiff having been examined, the denial thereof by a witness who was not at the spot at the relevant time, held, was nothing but hearsay evidence which could not inspire any confidence---Plea of plaintiff that his category of employment was changed arbitrarily remained unshaken in circumstances.

Constitution of Pakistan, (1973), Art. 185 (3)---Breach of contract---Compensation for---Suit for recovery of damages and security partly decreed by Trial Court---Findings set aside in appeal and decree partly modified---Order impugned---Finding of High Court being based on proper appreciation of evidence on record, leave to appeal refused.

Civil Procedure Code (V of 1908), S. 20---Jurisdiction---Breach of contract---Liability to pay---Extent---Jurisdiction of Court---Price of shipped material as claimed by plaintiff proved by material on record---Orders having been placed for shipment from 'K' from where goods were shipped and amount was to be paid, Court at 'K', held, would have jurisdiction to try the suit.

Breach of contract, suit for---Liability of defendant---Extent---Entitlement of plaintiff, held, was established only to cost of goods which were supplied to order of defendant---In absence of evidence, plaintiff was not entitled to claim incidental loss suffered by him.

Breach of contract---Default of payment of price of goods supplied---Order for supply of goods placed on plaintiff by contesting defendant, to be supplied at place of business of ex parte defendant---Plaintiff performed his part of contract and demanded payment---Defendants filling to pay price for the supplied consignment---On plaintiff's suit for recovery of amount, contesting defendant taking pica that there was no privity of contract between him and the plaintiff---Liabilities of contesting defendant---Extent---Contesting defendant neither claiming in his letters written to plaintiff for supply of goods, that he was placing such order on behalf of ex parte defendant nor placing any document on record to show that in fact ex parte defendant had placed order which was conveyed by contesting defendant to plaintiff---Use of words "our company" by contesting defendant in one letter and describing such company as "his associate" in another letter; held, would indicate that contesting defendant was not an indenting agent but was associate of ex parte defendant on his own admission---In absence of any clarification by using the word "our order", manner in which instruction regarding quality, quantity and mode of payment had been given by contesting defendant there would be no doubt left that plea of such defendant to be a mere indenting agent was an afterthought---Privity of contract between plaintiff and contesting defendant thus, was proved on record.

Suit for recovery of loss suffered on breach of contract---Municipal Corporation leasing out Sullage Farm to appellants through auction but they failed to pay auction amount within time---Lease in favour of appellants cancelled by Municipal Corporation and reauctioned to a third party at lower amount---Municipal Corporation claiming that they were entitled to recover loss sustained by them due to difference of auction amount actually offered by appellants and auction amount offered by third party---Appellants contending that no contract was signed between parties, that auction was not confirmed by Controlling Authority i.e. Commissioner and that possession of leased land was not delivered to them. Evidence on record showing that one of appellants was already in possession of Sullage Farm and both of them were jointly leased out, both were as such considered to be in possession thereof; that they paid a part of auction money and auction was confirmed by Controlling Authority i.e. Commissioner, a contract had therefore, reached between parties and there was nothing wrong or illegal in procedure---Held, both appellants were jointly and severally liable for loss suffered by Municipal Corporation on account of reduction. of lease of disputed land---Appeal against order of Trial Court decreeing suit of respondent Corporation dismissed in circumstances.

Damages for breach of contract---Alternative claim for damages on basis of market price not maintainable at appellate stage.---Where, in a case for damages for breach of contract a party claims damages on the basis of re-sale of the goods and fails to prove it, it cannot in appeal set up an alternative claim for damages on the basis of market price. To allow a party to do so would be tantamount to allowing its claim without offering the other party any chance to defend itself.

Damages for breach of contract against person procuring breach and declaration that contract subsists---Not alternative reliefs---Damages cannot be granted if declaration is given.---Where a party sues the Principal for a declaration that his contract of agency subsists and also another person for damages for procuring the breach of contract between him and his principal. The two reliefs are not alternative reliefs. Therefore, if the declaration asked for is given, the other relief cannot be granted.

Breach of contract of sale---Suit for damages---Limitation starts from date of breach of contract and not from date of resale of goods. In a case of breach of contract of sale, the cause of action arises from the breach of contract and this happened when the defendants failed to pay and take delivery of the goods. The ascertainment of the actual amount of damages from the re-sale does not give a fresh start of limitation. Ascertainment of damages must be distinguished from the breach of contract and it is the latter which provides the cause of action.

Damages claimed on basis of resale of goods---Damages on basis of difference between contract price and market price may be granted. Where in a suit for damages for the breach of a contract for sale of goods the seller plaintiff claims as the measure of damages the difference between the price, which he realised on the resale of goods and the contract price, the fact that the plaintiff has made a mistake in demanding damages on a wrong basis is not a reason for the Court to refuse to set right the mistake by directing the damages to be calculated in the proper way unless the plaint is amended. For even without an amendment the court is entitled to award the proper measure of damages if there is sufficient evidence on record.

Damages for breach of contract---Rate of exchange of currency must be calculated as on the date of breach.---For the purpose of calculation of damages for breach of contract by a local firm against a foreign firm, the rate of exchange, on the date of breach is to be taken into account and any subsequent changes are not to be considered for the purpose of the calculation.

Loss occasioned by breach of contract---Not proved---No damages can be awarded. Where the amount of damages awarded against the appellant had not satisfactorily been proved or established the plaintiffs are not entitled to any damages and even nominal damages cannot be allowed to them.

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