We have seen that every breach of a contract to sell land results in a right of action at law to recover damages for the breach (t); and that, where the breach is of an essential stipulation, the injured party, if he do not choose to rescind the contract, may affirm it and sue for damages for the breach or else for the specific performance of the contract (u). We will now consider what damages are recoverable by either party in case of his election, on the other's breach of contract, to affirm the agreement and to pursue his remedy for damages at law. It appears that this is to be determined by the general rule of the common law with respect to the damages recoverable for breach of contract, as qualified by the decision in Flureau v. Thornhill(x) and Bain v. Fothergill (y), that where the breach complained of arises from the vendor's inability (without his own fault) to show a good title, the purchaser is not entitled to any damages for the loss of his bargain (z). The general rule of the common law is that, where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same position, with respect to damages, as if the contract had been performed (a). But this rule must be read in connection with the principle that the damages recoverable for breach of contract "should be such as may fairly and reasonably be considered either arising naturally, i.e., according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it" (b).

Remedy by action for damages at law.

(m) Above, p. 496.

(n) Above, pp. 106, 107, 332.

(0) Above, pp. 907 sq.

(p) Above, pp. 58, 62, 955.

(q) Above, pp. 302 sq. (r) Above, pp. 338 sq. (s) See above, pp. 42 - 45, 955, and n. (u).

(t) Above, p. 935,

What damages are recoverable.

The general rule as to damages.

The vendor's right to damages is governed by the general rule; he is entitled to substantial compensation for the purchaser's failure to fulfil the bargain, as in the case of a sale of goods (c). But if the purchaser break the contract, as by refusal to accept a good title, duly proved (d), or by failure to pay the price before the vendor has parted with his estate in the land, the vendor cannot recover the whole price as damages, but is limited to the loss which he has actually sustained (c), that is to say, the difference, if any, between the value of the land as remaining on his hands at the date of the breach and the price agreed to be paid (e). And this is equally the case where the purchaser has been put into possession without any conveyance being executed, for the vendor then retains his legal estate in the land, and is, consequently, entitled to resume possession on the purchaser's breach of contract (f). Where the purchaser has been let into possession before completion on the terms that he shall pay interest on the purchase money from the time of his taking possession (g), and he afterwards commits a breach of the contract, the vendor affirming the agreement will be entitled to recover the interest as damages, and the purchaser to keep any ordinary casual profits received by him during his possession: but where the purchaser has obtained profits by any act of waste, though committed in accordance with the agreement, the vendor may recover damages for the consequent deterioration in value of the inheritance remaining on his hands (h). If a deposit were paid, and the purchaser commit a breach of contract, the vendor affirming the contract, of course, cannot claim to retain the deposit as forfeited, and to be paid, in addition, his full measure of damages for the breach: hut he is entitled to keep the deposit or recover it from a stakeholder (i) in part payment of the price, and to recover the damages, if any, which he has sustained by the breach, after taking into account, to the purchaser's credit, the payment of the deposit. And this is the case, although the contract expressly provide that, on the purchaser's failure to comply with the conditions thereof, the deposit shall be forfeited (k); for any such stipulation would be construed as conferring only the right to treat the deposit as forfeited on rescission of the contract (l). A similar stipulation for forfeiture of the deposit as liquidated damages does not preclude the vendor from suing for damages for any loss sustained by him after giving credit for the amount of the deposit (m). Where the vendor has executed a conveyance without receiving payment of the entire purchase money (n), he can sue for the whole amount remaining unpaid in the event of the purchaser's omission to pay it as agreed. In that event the amount due becomes a debt, and is recoverable accordingly (o).

Damages recoverable by the vendor.

(u) Above, pp. 936, 946, 947.

(x) 2 W. Black. 1078.

(V) L. R, 7 H. L. 158; above, pp. 30, 31.

(z) Parke, B., Robinson v. Har-man, 1 Ex. 850, 855.

(a) Ibid.; Wall v. City of London Real Property Co., L. R. 9 Q. B. 249, 253. These dicta in Robinson v. Harman appear to be good law: but the decision in that case was overruled by Bain v. Fothergill.

(b) Hadley v. Baxendale, 9 Ex. 341, 354.

Where the purchaser has been in possession.

Where a deposit has been paid.

(c) Laird v. Pim, 7 M. & W. 474, 478; Noble v. Edwardes, 5 Ch. D. 378.

(d) See Lethbridge v. Kirkman, 25 L. J. Q. B. 89.

(e) Barrow v. Arnaud, 8 Q. B. 604, 609, 610; Benjamin on Sale, 617, 618, 2nd ed.; and consider Noble v. Edwardes, 5 Ch. D. 378.

(f) Laird v. Pim, 7 M. & W. 474, 478; Moor v. Roberts, 3 C. B. N. S. 830, 844. See above, pp. 140, 450, 457 - 460, 954, and n. (q).

(g) Above, pp. 457 - 459.

(h) Laird v. Pirn, 7 M. & W. 474; see above, pp. 451, 457; and cf. above, p. 953.