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This rule is based on the assumption that the buyer could purchase similar goods on the market reasonably soon after the breach, and thus protect himself from damage naturally consequent upon his failure to receive the goods from the seller. If, however, he could not procure similar goods soon enough with reasonable effort, the rule of damages as stated could not be applied. In such case the amount of damage would be the financial loss, at least, resulting as a normal consequent upon the seller's failure to perform. But the burden of proof that similar goods could not have been reasonably procured is on the plaintiff. As illustration, in Parsons v. Sutton4 the claim was that Parsons had contracted to sell to Sutton certain paper to be used for printing a frontispiece for a magazine; that Parsons had failed to furnish it at the time agreed; that Sutton could not get other paper like it and had therefore to print his magazine without a frontispiece; and that because of this he had suffered financial loss in decrease of circulation, waste of printed matter which was to have accompanied the frontispiece and other normally consequent results. The court stated that “the ordinary rule of damage ... is the difference between the contract price and the market price at the time and place of delivery. When the buyer can go into market and buy the article which the seller has failed to deliver, this is the only rule, as it offers the buyer full indemnity.” The court further recognized that“special damages are allowed when this rule will not furnish full indemnity. If there is no market for the article where it is to be delivered, and it can not be had there with reasonable diligence, and the buyer suffers damage because of the seller's failure to deliver, which is the proximate and natural consequence of such failure, such damage can be recovered.” But the buyer “must not, by inattention, want of care or excusable negligence, permit his damage to grow and then charge it all to the other party.”
transportation; Schmertz v. Dwy. As to delivery by installments, er, 53 Pa. 335; David v. Witmer, see Long Pole Co. v. Saxon etc. 46 Pa. Super. 307; Tuttle etc. Co. Co., 108 Va. 497; Hewson-Herzog V. Coaldale Co., 136 Iowa 382; Co., v. Minnesota Brick Co., 55 Holliday v. Hyland, 43 Ind. Ap. Minn. 530. 342; Crescent Mfg. Co. V. Slattery, 4-66 N. Y. 92. 132 La. 917.
*See Uniform Sales Act, Section 67, (1), (2), (3).
In the particular case, Parsons was ready to deliver a few days after the time set, and there was no positive showing that delivery at that time would have been too late. Furthermore, the court said, “There is no proof that such paper as this contract called for is not usually to be found in the market, or that it could not, in the small quantity required, be delivered in a few days by manufacturers. All (Sutton) did was to go to dealers in paper a day or two after (the date for delivery) and try to buy paper like that which (Parsons) was to deliver, and they could find none. It does not appear
. that they made any further efforts. It does not appear that they could not find paper which would answer substantially the purpose. No reason is given why they did not try more than once to find the paper.” Accordingly the court refused to allow recovery of the special damage. The case demonstrates clearly the breadth of the rule that, in general, only the difference between the contract price and the price at which the buyer can secure similar goods can be recovered as damage for the breach. “Very rarely, indeed, can there come a case where the vendee suffers special damages if, at the time and place of delivery, there was a market value for the article purchased by him. A market value at a given place presupposes that merchandise of that character was at that time and place sold or offered for sale, and thus the opportunity is presented the vendee of buying the article in the open market to be used for the special purpose intended, and of recovering of the defendant the difference between such market value and the contract price."
5–Saxe v. Penokee Lumber Co., 159 N. Y. 371.
But the buyer need only act reasonably in protecting himself after the seller's breach. Thus, in Austrian & Co. v. Springer, the seller announced early in May that he would not be able to fulfill his contract, which called for shipment on May 15th. The contention of the defendant, the seller, was that the price of glass in May was lower than in June, during the latter part of which the plaintiff had protected himself by purchasing similar goods. Evidence showed, however, that while dealers would give a “market price” during May and early June, they would not agree actually to furnish goods at such prices; in short, that dealers were dodging definite orders in expectation of a rise in price. This the court held sufficient to justify fixing the measure of damages by the market prices of late June or July.
The “market price” means market price at which the buyer could purchase. In reversing a case because the trial court had instructed the jury to allow the plaintiffs the difference between the contract price and the "wholesale" price at time of breach, the Supreme Court said, “The question is not one of wholesale price or retail price, and an instruction to measure the damage by either might be erroneous. The true test of proper compensation in such cases is what it would have cost the plaintiffs to procure at the point of delivery and at the time or times when it was reasonable for them to supply themselves, lumber of the kind and quality they were to receive on the contract. * So large an amount of lumber as was covered by this contract, they might, perhaps, have been able to procure at cargo prices; but we have no right to presume this, and if it were impracticable to supply themselves, except at retail rates, they were entitled to demand those rates of defendants."7 Similarly it has been held that if the buyer has actually protected himself by a purchase below the reported “market value” he can recover only the difference
7-Haskell v. Hunter, 23 Mich.
6-94 Mich. 343.
between the contract price and what he actually had to
For a full discussion of the amount and proof of damage the reader is referred to works on damages. The discussion here is necessarily incomplete and is intended only to cover the broad principles, and the citations, while chosen to present as wide a variation of circum. stances as possible, do not touch every type of case.
Recovery of Money Paid.—If the buyer has already paid a part of the price, or all of it, he may still, upon the seller's failure to pass title, sue to recover compensation for damage from the breach of contract. But, furthermore, he may disregard damages as such, which might be more or less than the exact amount of the purchase price, and sue specifically to recover the money which he paid.10 If he has received a part of the goods, and the amount of the purchase price which they represent is not definitely fixed by the contract, he must return such part before he is entitled to recover anything in such a suit. 11
Inspection Before Accepting Title. — Although the buyer who has not received title cannot compel the seller to pass the title, on the other hand, he can not be made to take title to goods which he did not agree to buy.
If the seller tenders goods which the buyer did not contract for, the buyer is in no way guilty of breach of
8-Arnold v. Blabon, 147 Pa. 372, approved in Theiss v. Weiss, 166 Pa. 9.
9-In such case the amount of recovery would be adjusted to cover what he had paid; if he had paid the full price, his recovery would be the full market value, instead of the mere difference be. tween the two. Hill v. Smith, 32 Vt. 433; Winside Bank v. Lound, 52 Neb. 469,
10-Joyce V. Adams, 8 N. Y. 291; Hayes V. Stortz, 131 Mich. 63; Williams v. Allen, 10 Humph. (Tenn.) 337; Altschul v. Koven, 94 N. Y. S. 558; Dalton v. Bentley, 15 Ill. 420, but he can not maintain both actions; Meader V. Cornell, 58 N. J. L. 375; Cleveland v. Sterrett, 70 Pa. 204.
11–Miner v. Bradley, 22 Pick. (Mass.) 457; Clark V. Baker, 6 Metc. (Mass.) 452.
contract if he refuses to accept them, nor, of course, is the buyer liable to pay for them. “The delivery of property corresponding with the contract is a condition precedent to the vesting of the title in the vendee. The parties understand that the vendee is not bound to accept the property tendered, except upon this condition. The latter is not bound to receive and pay for a thing that he has not agreed to purchase.
When the contract has been in regard to a described, but not specifically identified, chattel, title, as we have seen, can not pass because of the lack of identity of the chattel. When thereafter the seller selects a particular chattel as the one to which he intends to pass title according to the contract, this of itself does not thrust title upon the buyer. He, the buyer, still has a right to say whether or not he will take the title. If what the seller offers is just what the buyer agreed to take, it will be a breach of contract for the buyer to refuse the title. But if what the seller offers is not what the buyer agreed to take, obviously the buyer is not at fault in refusing title to it.
Right to Inspect.—The buyer can not be compelled to accept or refuse title until he has had opportunity to see what the seller offers. This is obvious justice. Were he compelled to accept title to whatever unseen thing the seller should offer he might find himself saddled with title to what he did not contract for. On the other hand, were he to play safe, by refusing the proffered title, he might be guilty of breach of contract. Therefore the law allows him an opportunity to see what the seller offers before it will hold him guilty of breach of contract for refusing to accept title to it. This is often called the right of inspection.t
12-Reed v. Randall, 29 N. Y. 361; Chanter v. Hopkins, 4 M. W.
399. *See Uniform Sales Act, Section 11, (1), (2). + See Uniform Sales Act, Section 47, (1), (2),