The remedies for breach of condition and breach of warranty have been discussed in chapter 5, 54. Under the statutory provisions there referred to, in case of breach of condition the buyer may elect to treat the breach of condition as merely a breach of warranty, and in certain circumstances he is obliged to do so.
The Sale of Goods Act (Ont. s. 52; U. K. s. 53) provides: 52. - (1) Where there is a breach of warranty by the seller, or where the buyer elects, or is compelled, to treat any breach of condition on the part of the seller as a breach of warranty, the buyer is not by reason only of such breach of warranty entitled to reject the goods, but he may
(a) set up against the seller the breach of warranty in diminution or extinction of the price; or (b) maintain an action against the seller for damages for the breach of warranty.
(2) The measure of damages for breach of warranty is the estimated loss directly and naturally resulting, in the ordinary course of events, from the breach of warranty.
(3)In the case of breach of warranty of quality such loss is prima facie the difference between the value of the goods at the time of delivery to the buyer and the value they would have had if they had answered to the warranty. (4) The fact that the buyer has set up the breach of warranty in diminution or extinction of the price does not prevent him from maintaining an action for the same breach of warranty if he has suffered further damage.
'Quality" of goods is defined (Ont. s. 2; U. K. s. 62) as including their state or condition.
In the United States, as has been pointed out in chapter 5, rescission is allowed as an alternative remedy in case of breach of warranty, and the Uniform Sales Act contains provisions materially different from those of the Sale of Goods Act. As regards the measure of damages, however, the two statutes are not substantially dissimilar. The Uniform Sales Act (s. 69) provides:
69 - (6) The measure of damages for breach of warranty is the loss directly and naturally resulting, in the ordinary course of events, from the breach of warranty.
(7) In the case of breach of warranty of quality, such loss, in the absence of special circumstances, showing proximate damage of a greater amount, is the difference between the value of the goods at the time of delivery to the buyer and the value they would have had if they had answered to the warranty. The abatement in price to be allowed to the buyer is the amount by which the value of the goods is reduced by reason of the breach of warranty: Mondel v. Steel, 1841, 8 M. & W. 858. It is the actual reduction in value which must be considered, not an estimate made by either party, and the price obtainable for the goods is strong, though not necessarily conclusive, evidence of the actual value. Damages may be given to the buyer for the liability which he has incurred by selling the goods on the same warranty as that on which he bought. Dingle v. Hare, 1859, 7 C.B. N.S. 145; Randall v. Raper, 1858, E. B. & E. 84.
Catalano v. Cuneo Fruit and Importing Co., 1919, 46 O.L.R. 160, 49 D.L.R. 610; cf. Wood v. Anderson, 1915, 33 O.L.R. 143.
Where there is a warranty, the buyer may, even after inspection, take possession of the goods and sell them, and nevertheless claim damages for breach of warranty. See chapter 6, 66. The buyer owes a duty to the seller to inspect the goods at the place of delivery. The measure of damages is the difference between the actual value of the goods when delivered at that place and the value which they ought to have had, and in case of breach of warranty an in-inspection of the goods will inform the plaintiff of their then quality and condition and enable him not only to ascertain their value when delivered, but also to discharge the obligation incumbent on him to mitigate the damages.
Merrill v. Waddell, 1920, 47 O.L.R. 572, 54 D.L.R. 18.
Manufacturers agreed to sell 3000 pieces of unbleached cotton cloth of a specified quality at a certain price to be delivered within a certain period. They delivered 1625 pieces of inferior quality. The buyers accepted and paid for these pieces but refused to take any further deliveries, and being sued by the manufacturers for non-acceptance of the remaining pieces, counter-claimed damages for breach of warranty of quality in relation to the 1625 pieces. The buyers had made a contract to deliver 2000 pieces of bleached cloth to third persons at a price per piece higher than the market price per piece of the 1625 pieces as delivered, and in fulfilment of that contract had actually delivered 691 of the 1625 pieces, and had received payment for them. It was held that this contract was not to be taken into account in measuring the damages.
Slater v. Hoyle & Smith,  2 Kb. 11, following Rodocanachi v. Milburn, 1886, 18 Q.B.D. 67, and Williams v. Agius,  A.C. 510, and distinguishing Wertheim v. Chicoutimi Pulp Co.,  A.C. 301. As-to Slater v. Hoyle & Smith, see also 83.
With regard to general damages, that is, the difference between the value of the thing contracted for and that of the thing supplied, the question whether the property has passed or not may be important. Until the property in goods has passed to the buyer, he is not entitled to sue for general damages for breach of warranty, for no one can be injured by a diminution in value, simply, of a chattel, until he owns it. Frye v. Milligan, 1885, 10 0. B. 509; Tomlinson v. Morris, 1886, 12 O.R. 311. If, however, the buyer is sued for the price, he may set up the diminution of value by way of set-off, whether the property has passed or not. Copeland v. Hamilton, 1893, 9 Man. R. 143; Cull v. Roberts, 1897, 28 O.R. 591; Crompton and Knowles Loom Works v. Hoffman, 1903, 5 O.L.R. 554. Again, although the buyer is not entitled to sue for general damages for breach of warranty until the property has passed, the fact that the property has not passed will not debar him from suing for special damages, for instance, for loss of profits. If a machine, the subject matter of the contract, will not do the work which it was warranted to be capable of doing, and the buyer claims damages for loss of profits, it is no answer for the seller to say that the machine does not belong to the buyer. The question of ownership is irrelevant to the buyer's claim. He is injured by the failure of the machine to do the work for which he wanted it, no matter who owns it. Jones v. Page, 1867, 15 L.T. N.S. 619; Fowler v. Lock, 1872-4, L.R. 7 C.P. 272, 9 C.P. 751n, 10 C.P. 90.
New Hamburg Mfg. Co. v. Webb, 1911, 23 O.L.R. 44, at pp. 48-51; cf. Dominion Paper Box Co. v. Crown Tailoring Co., 1918, 42 O.L.R. 249, 43 D.L.R. 557. As to special damages for breach of warranty, see also 86.