The buyer's proprietary remedies have been referred to in chapter 7, 71. It remains to discuss the buyer's remedies by way of action for damages. Action includes counterclaim or set off. See chapter 9.
The Sale of Goods Act (Ont. s. 50; U. K. s. 51) provides: 50. - (1) Where the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer may maintain an action against the seller for damages for nondelivery.
(2) The measure of damages is the estimated loss directly and naturally resulting, in the ordinary course of events, from the seller'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 of the goods at the time or times when they ought to have been delivered, or, if no time was fixed, then at the time of the refusal to deliver.
If the time for delivery is fixed by reference to the happening of an event, it is fixed within the meaning of sub-s. 3. On the other hand, if the contract provides for delivery within a reasonable time after a future date, it is not a contract for delivery at a fixed time within the meaning of the sub-section. In any event the provision of sub-s. 3 that the damages are to be ascertained with reference to the market or current price at the time of the refusal to deliver does not apply to a case where the breach is an anticipatory breach. If, for instance, the seller repudiates the contract before the time at which the goods ought to have been delivered, the buyer, without buying against the seller, may bring his action at once, but if he does so, his damages must be assessed with reference to the market price of the goods at the time at which they ought to have been delivered under the contract. If the action comes on for trial before the contractual date for delivery has arrived, the court must arrive at the price as best it can. The buyer must, however, do what is reasonable to mitigate the damages, and if the seller can show that the buyer acted unreasonably in not buying against him, the date to be taken is the date at which the buyer ought to have gone into the market to mitigate the damages.
Melachrino v. Nickoll,  1 K.B. 693; Millett v.
Van Heek & Co.,  3 K.B. 535; Morrow Cereal Co. v.
Ogilvie Flour Mills Co., 1918, 57 Can. S.C.R. 403, 44 D.L.
R. 557, reversing, in part, Ogilvie v. Morrow, 1917, 41 0.
L.R. 58, 39 D.L.R. 463 ;see also Brown v. Muller, 1872, L.R.
7 Ex. 319, 23 R.C. 527; Roper v. Johnson, 1873, L.R. 8
C.P. 167, 23 R.C. 532; Dominion Radiator Co. v. Steel Co.,
1918, 43 O.L.R. 356
The provision of sub-s. 3, that the measure of damages is to be ascertained with reference to the market or current price at the time when the goods ought to have been delivered, is inapplicable where the price has been prepaid. In such case, if the market price is higher at the time of trial than at the time specified for delivery, the damages are to be ascertained with reference to the price at the time of trial.
Peebles v. Pfeifer, 1918, 11 Sask. L.R. 249, citing 25
Halsbury, Laws of England, p. 271.
In the case of a c.i.f. contract the delivery contemplated is a constructive delivery of the goods by tender of the invoice, insurance policy and bill of lading as soon as possible after shipment of the goods, and the time for delivery within the meaning of sub-s. 3 is therefore the date at which these documents, if sent forward with reasonable despatch, should have reached the buyer, not the date at which the goods themselves should have arrived.
Sharpe v. Nosawa,  2 K.B. 814. As to c.i.f. contracts, see also chapter 6, 61.
A contract for the sale of goods by the defendant to the plaintiffs provided for delivery as required during a period of nine months, payment for each instalment to be made within one month of delivery less 21/2% discount. The plaintiffs failed to make punctual payment for the first instalment, and the defendant, in the erroneous belief that the plaintiffs' failure to pay was due to their lack of means, refused to deliver any more of the goods under the contract, but offered to deliver the goods at the contract price if the plaintiffs would agree to pay cash at the time of the orders. The plaintiffs did not accept this offer, and, the market price of the goods having risen, brought an action against the defendant for breach of contract, claiming as damages the difference between the market price and the contract price. It was held that the question what steps a plaintiff in an action for breach of contract should take towards mitigating the damage is a question of fact and not of law, and that the plaintiffs should have mitigated their loss by accepting the defendant's offer, and that the damages recoverable were, not the difference between the market price and the contract price, but only such loss as the plaintiffs would have suffered if they had accepted the offer.
Payzu v. Saunders,  2 K. B. 581.
The following cases are examples of the application of the rule that the measure of damages is the difference between the contract price and the market price at the date of the breach:
Brenner v. Consumers Metal Co., 1917, 41 O.L.R. 534, 41 D.L.R. 339.
Petrie v. Rae, 1919, 46 O.L.R. 19.
Schmidt v. Wilson & Canham, 1920, 48 O.L.R. 257, 55 D.L.R. 516.
In Di Ferdinando v. Simon, Smite & Co.,  3 K.B. 409, at pp. 414-5 Scrutton L. J. said:
When a plaintiff claims damages for breach of contract to deliver goods in a foreign country at a fixed date, the measure of damages is, if there is a market, the market value of those goods at the place where and on the day when they should have been delivered ; and it is immaterial to prove that at the date of the judgment awarding the damages the goods were either worth more or worth less than they were at the date of the breach. If the goods were worth £50 a ton on the day for delivery, it would be irrelevant to prove that they were worth £100 a ton on the day of the judgment. The reason for excluding that evidence is that subsequent fluctuations in value of the goods which ought to have been delivered are too remote as a consequence of the original breach, to be taken into account by the court. Therefore, shutting out the change in the value of the goods after the date of the breach, if the damages have to be assessed in the currency of a foreign country, the court has to arrive at a figure expressed in foreign currency. An English court, however, cannot give judgment in foreign currency, there being no power to enforce such judgment. Therefore the court must translate into English currency the figure arrived at as the damages in foreign currency on the date of the breach. Just as the court has to exclude from the calculation of the damages the subsequent change in the value of the goods after the date of the breach, so it has to exclude the subsequent change in the value of the currency after the date of the breach; and for the same reason - namely, that the changes in the value of the currency are too remote a consequence of the breach to be taken into consideration by the court.
Di Ferdinando v. Simon, from which the foregoing passage is quoted, was a case of breach of contract for the carriage of goods and conversion. The same rule, namely, that the value of foreign currency is to be estimated as of the date of the breach, not as of the date of the judgment, had previously been applied, in the case of a sale of goods. See Barry v. Van den Hurk,  2 K.B. 709; Lebeaupin v. Crispin,  2 K.B. 714. On the other hand, see Kirsch v. Allen Harding & Co., 1919, 89 L.J. K.B. 265, and the editorial opinion in its favour expressed in 37 Law Quarterly Review, p. 7 (Jan. 1921). The cases are reviewed in an article in the same volume at pp. 38 ff. Another case since reported is The Vol-turno,  P. 447.
In Slater v. Hoyle & Smith,  2 K.B. 11, at pp. 20 ff., Scrutton L.J., said:
It is well settled that damages for non-delivery of goods, where there is a market price, do not include damages for the loss of any particular contract unless that contract has been in contemplation of the parties to the original contract: Home v. Midland Ry Co., 1873, L.R. 8 C.P. 131. The value of the goods in the market independently of any circumstances peculiar to the plaintiff is to be taken: Great Western Ry. Co. v. Redmayne, 1866, L.R. 1 C.P. 329; Williams v. Reynolds, 1865, 6 B. & S. 495, 505. If the plaintiff has a profitable contract to sell goods, and there is a market, he can supply himself with the goods by purchasing in the market, and he is then left without the goods he should have received under the original contract and has lost their market value. But suppose his sub-contract is at a price below instead of above the market price, so that, if he delivers goods under the sub-contract, he loses. Can his damages be limited by the amount he would have received on the subcontract? On the above reasoning it would seem not. He could supply the sub-contract by buying in the market and then should have goods delivered to him of a certain market value, which he has lost because they were not delivered. This has been decided in the case of non-delivery of goods by the Court of Appeal in Rodocanachi v. Milburn, 1886, 18 Q.B.D. 67, and by the House of Lords in/Williams v. Agius,  A.C. 510, where Rodocanachi v. Milburn was approved.
In subsequent passages of his judgment in Slater v. Hoyle & Smith, Scrutton, L.J., expressed the opinion that the same principles should apply in the case of delay in delivery, that is, that the buyer should not be limited in his damages by the amount he would have received under the sub-contract, notwithstanding the decision of the Privy Council to the contrary in the case of Wertheim v. Chicoutimi Pulp Co.,  A.C. 301. The case of Slater v. Hoyle & Smith was, however, one of breach of warranty, and the question actually requiring decision is stated in 85.
The parties may by their contract assess in advance the amount of the damages to be paid for non-delivery, if the amount fixed is reasonable, and is payable in respect of the breach of a single stipulation (as contrasted with the breach of any one of several stipuations, some more and some less important), or is graduated according to the extent of the breach or according to the time during which default continues.
Pelee Island Navigation Co. v. Doty Engine Works Co., 1911, 23 O.L.R. 402, and cases cited.