Under the provision of the Sale of Goods Act last quoted (Ont. s. 48, sub-s. 2; U.K. s. 49, sub-s. 2), if the price is payable on a day certain, irrespective of delivery, and the buyer wrongfully neglects or refuses to pay the price, the seller may sue for the price notwithstanding that the property has not passed to the buyer, but in other cases, if the property has not passed, the seller may sue only for damages for non-acceptance. If the property has passed and the buyer wrongfully neglects or refuses to pay, the seller, it seems, may sue either for the price or for damages for non-acceptance, in which latter case his conduct amounts to an election to treat the buyer's conduct as a repudiation of the contract.

See 25 Halsbury, Laws of England, pp. 266, note (i), 267, note (m). The Sale of Goods Act (Ont. s. 49; U.K. s. 50) provides:

49.- (1) Where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may maintain an action against him for damages for non-acceptance.

(2) The measure of damages is the estimated loss directly and naturally resulting, in the ordinary course of events, from the buyer's breach of contract.

(3) Where there is an available market for the goods in question, the measure of damages is prima facie to be ascertained by the difference between the contract price and the market or current price at the time or times when the goods ought to have been accepted, or, if no time was fixed for acceptance, then at the time of the refusal to accept.

As to what is meant by the time being "fixed" under sub-s. 3, compare the parallel provision of the next following section, relating to damages for non-delivery, and the decisions with regard to it, referred to in 83.

The parties' obligations to deliver goods and to accept and pay for them under a contract may be discharged by a mutual agreement to substitute for that contract a new contract, notwithstanding that the new contract is unenforceable by reason of the Statute of Frauds. See Morris v. Baron, [1918] A.C. 1: chapter 2, 25. But the courts have always recognized "the distinction between a substitution of one agreement for another, and a voluntary forbearance to deliver at the request of another," and will not regard the latter as affecting the rights of the parties further than this, that if a man asks to have performance of his contract postponed, he does so at his own risk. For if the market value of the goods which he should have accepted at the earlier date has altered at the latter date, the rate of damages may be assessed, as against him, either at the time when the performance should have taken place, and and when by non-performance the contract was broken, or when he ultimately exhausted the patience of the seller, and definitely refused to perform the contract.

Anson, Contract, 15th ed. 1920, p. 337, citing Hickman v. Haynes, 1875, L.R. 10 C.P. 606, and Ogle v. Earl Vane, 1867, L.R. 2 Q.B. 275, 3 Q.B. 272.

The measure of damages is the estimated loss directly and naturally resulting, in the Ordinary course of events, from the buyer's breach of contract, and the court has no power to add a penalty. If therefore the buyer has paid a sum of money to the seller by way of deposit, the buyer is entitled to the return of it (less the amount for which he is liable for breach of contract) unless the parties have agreed that the deposit shall belong to the seller in the event of the buyer's failure to perform the contract. Brown v. Walsh, 1919, 45 O.L.R. 646.

In Mason & Risch v. Christner, 1920, 47 O.L.R. 52, at pp. 53, 54, (judgment varied, 48 O.L.R. 8, 54 D.L.R. 653) Mid-dleton J. says:

The fundamental principle in all cases of breach of contract is that, so far as money can do it, the other party to the contract shall be placed in as good a situation as if the contract had been performed, this principle being subject to the qualification that the plaintiff has cast upon him the obligation of taking all reasonable steps to mitigate his loss consequent upon the breach. If authority is needed, it is found in British Westinghouse Electric and Manufacturing Co. v. Underground Electric Railway Co. [1912] A.C. 673, and Payzu v. Saunders, [1919] 2 K.B. 581. The rule relied upon by the defendant, found in many cases, that the damage in the case of refusal to accept goods is the difference between the contract price and the market price, is merely an example of the working out of this principle. If goods can be sold on the open market, the vendor's duty is to offer for sale, and so mitigate his damage; but this rule has no application to cases in which there is not an open market for the goods. A dealer having a quantity of grain can always sell it upon the open market, and it makes no difference to him who buys. The thing of importance is the difference between the price the defendant agreed to give him and the price he thus obtains.

Where the article sold is a machine or a piano, and there is no such thing as an open market ready to absorb all that is cast upon it, but only a limited number of purchasers exist, the case is obviously widely different. The vendor has his store maintained at large expense, and his salesmen to whom he pays wages, and is under large expense for advertising his wares. He may have a hundred pianos to sell, and, when a contract is made to buy, the profit, so-called, goes to meet pro tanto this overhead expense before his ultimate net profit can be ascertained. When this contract is broken, it is no answer to say, "You can sell your piano at the same price, and so have suffered no damage." If the contract had not been broken, a second piano would have been sold, and the dealer would have had the profit on two sales instead of one.

The existence of the open market ready to absorb all that can be fed to it is the true test. As put by James L.J. in Dunkirk Colliery Co. v. Lever, 1878, 9 Ch. D. 20, at p. 25, "What I understand by a market in such a case as this is, that when the defendant refused to take the [coal in question] the plaintiffs might have sent it in waggons somewhere else, where they could sell it, just as they sell corn on the Exchange, or cotton at Liverpool . . . That is my notion of a market under those circumstances. There being no market . . what the plaintiffs are entitled to is the full amount of the damage which they have really sustained by the breach of the contract."

In the case of goods to be manufactured specially for the buyer, it is possible that they may be of no use to anyone but the buyer. In that case, if after the completion of the goods, the buyer refuses to accept and pay for them, the only way to put the seller in the same position as if the contract had been performed is to give him the whole price of the goods, and not merely,theamount of the profit he would have made. If the buyer, by altering the goods, is able to re-sell them to another buyer, he is still entitled to recover from the first buyer the amount of the profit which he would have made upon the first sale, and not merely the cost of altering the goods, unless the first buyer proves that the seller could not have filled the orders of both buyers. In the case of goods which have not been manufactured when the buyer repudiates the contract, the seller is entitled to recover the amount of the profit which he would have made if the goods had been manufactured, delivered and paid for.

In re Vic Mill, [1913] 1 Ch. 183, 465; cf. Brunswicke Balke Collender Co. v. Falsetto, 1915, 34 O.L.R. 386, 25 D.L.R. 848; Consolidated Plate Glass Co. v. McKinnon Dash Co., 1917, 41 O.L.R. 188, 40 D.L.R. 47.

In the United States the Uniform Sales Act provides 64. - (1) Where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may maintain an action against him for damages for non-acceptance.

(2) The measure of damages is the estimated loss directly and naturally resulting, in the ordinary course of events, from the buyer's breach of contract.

(3) Where there is an available market for the goods in question, the measure of damages is, in the absence of special circumstances, showing proximate damage of a greater amount, the difference between the contract price and the market or current price at the time or times when the goods ought to have been accepted, or, if no time was fixed for acceptance, then at the time of the refusal to accept.

(4) If, while labor or expense of material amount are necessary on the part of the seller to enable him to fulfill, his obligations under the contract to sell or the sale, the buyer repudiates the contract or the sale, or notifies the seller to proceed no further therewith, the buyer shall be liable to the seller for no greater damages than the seller would have suffered if he did nothing towards carrying out the contract or the sale after receiving notice of the buyer's repudiation or countermand. The profit the seller would have made if the contract or the sale had been fully performed shall be considered in estimating such damages.

65. Where the goods have not been delivered to the buyer, and the buyer has repudiated the contract to sell or sale, or has manifested his inability to perform his obligations thereunder, or has committed a material breach thereof, the seller may totally rescind the contract or the sale by giving notice of his election so to do to the buyer.