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$1700. Countermanding order after part delivery.Where, therefore, after delivery and acceptance in part, the buyer refuses to accept the residue, the seller, if the contract is entire, may doubtless deem the refusal as a repudiation of the whole contract and repudiate on his own part as to that already delivered; or he may treat it as severable, in which case the seller is entitled to the contract price for that delivered and to damages for the refusal to accept the residue. Subject to the qualifications already mentioned, those damages, as has been seen, will be the difference between the contract price and the market price at the time and place of delivery agreed upon. § 1701. Countermanding order for goods when partly manufactured. So where there has been an order for goods to be manufactured, and before their manufacture is complete the buyer countermands the order, the seller, as has been seen,' is not usually at liberty to proceed to complete them on the buyer's account; 2 but, accepting the countermand as a breach

1 See ante, § 1091.

2 In Southern Cotton Oil Co. v. Heflin (1900, U. S. App.), 99 Fed. R. 339, 39 C. C. A. 546, the plaintiff was a manufacturer of cotton-seed products, and made a contract with defendant to sell to him all the cake and meal to be produced by its mill during the year. After receiving part of it, the defendant gave notice that he would receive no more, but the plaintiff continued to manufacture it, and tendered the balance, which was refused. The court held that "when the defendant gave notice that he would not receive the meal, he could not have complained if the plaintiff had acted upon the notice and sued him at once. But he could not require the plaintiff to recede from its contract. The plaintiff had a vested right in the contract to deliver the meal sold at the time fixed by the agreement, and no notice of the de

fendant could deprive it of this right." The measure of damages was declared to be the difference between the contract price and the market price, and in support of this rule the court said: "The plaintiff was not making one product only; it was making several, obtained from the same perishable raw material. All were made for sale. The meal sold to the defendant was not the chief product. When notified by the defendant that he would not take the meal, the plaintiff could not quit making it without stopping the mill and abandoning its business of making other products. To do this the plaintiff would violate its other con tracts as to oil, hulls and lint. The case is not analogous to a contract to make a soda-water apparatus, as in Tufts v. Lawrence, 77 Tex. 526, where only one chattel and two contracting parties are concerned; nor is it

of the contract, the seller may recover the damages which he has sustained by reason of not being permitted to complete the contract. In such a case he cannot sue for work and labor done and materials furnished, because the materials are his own and the labor has been expended on his own materials. He has lost the profit he would have made had he been permitted to complete the contract, and if the value of that which is completed is less than the cost for material and labor to produce it, he has lost that in addition. Compensation for these two items should be the measure of his damages.

§ 1702. Countermanding order before manufacture begun. Where, however, before the manufacture is begun the buyer countermands the order or repudiates the contract, the seller is not at liberty to proceed to complete the goods for the purpose of enhancing the damages, nor will he be permit

strictly analogous to a contract to manufacture corn shellers, as in Kingman & Co. v. Western Mfg. Co., 34 C. C. A. 489, 92 Fed. R. 486, where only one thing is being produced out of the same raw material.

The courts may say in some cases that the work should be stopped on notice by one party of an abandonment of the contract, but in a case like the present one it would be impossible to fairly apply such a rule."

1 Hosmer v. Wilson (1859), 7 Mich. 294, 74 Am. Dec. 716; Mechem's Cas. on Damages, 269; Unexcelled Fireworks Co. v. Polites (1890), 130 Pa. St. 536, 18 Atl. R. 1058, 17 Am. St. R. 788.

2 As stated in Southern Cotton Oil Co. v. Heflin (1900), 39 C. C. A. 546, 99 Fed. R. 339, the measure of the dam. ages to be recovered by the seller "is (1) his outlay and expenses, less the value of materials on hand; (2) the profits he might have realized by

performance. The first item he may recover in all cases. The second he may recover when the profits are the direct fruit of the contract and not too remote or speculative."

It is true that it is said in Tufts v. Lawrence (1890), 77 Tex. 526, 14 S. W. R. 165, and Heiser v. Mears (1897), 120 N. C. 443, 27 S. E. R. 117, that the measure of damages is the difference between the contract price and the value of the goods at the time of repudiation, but this is obviously unsound. Under such a rule, the less the seller has done towards performance the more he can recover.

Ante, § 1092; Hosmer v. Wilson (1859), 7 Mich. 294, 74 Am. Dec. 716; Mechem's Cas. on Damages, 269; Danforth v. Walker (1864), 37 Vt. 239; Dillon v. Anderson (1870), 43 N. Y., 231; Unexcelled Fireworks Co. v. Polites (1890), 130 Pa. St. 536, 18 Atl. R. 1058, 17 Am. St. R. 788.

ted, by completing and tendering them, to recover the contract price. His remedy is an action for the damages he has sustained by reason of not being permitted to complete the contract, and the measure of his damages will be the difference between the cost of manufacturing or producing the goods and the price he was to receive for them,2 "making reasonable deduction for the less time engaged, and for release from the care, trouble, risk and responsibility attending a full execution of the contract.” 3

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§ 1703. The same rule also was applied where there had been a contract to manufacture and supply goods as ordered by the buyer, and the buyer, after receiving and paying for part, refused to receive any more. The court, indeed, attached much importance to the fact that the goods were of a perishable nature, so that if made they might not endure until a market could be found, and for this reason held that the ordinary rule allowing the difference between the contract and the market price should not apply. The case, however, seems not in need of such distinction to bring it within the rule laid down in the preceding section.

§ 1704.

Loss of profits.- If it be urged, as it sometimes is, that this rule operates to give the plaintiff damages for a loss

1 Tufts v. Weinfeld (1894), 88 Wis. (1890), 135 Pa. St. 132, 19 Atl. R. 1008; 647, 60 N. W. R. 992.

2 Hinckley v. Pittsburgh Steel Co. (1886), 121 U. S. 264, 30 L. ed. 967, 7 Sup. Ct. R. 875; Mechem's Cases on Damages, 272; Chapman v. Kansas City, etc. Ry. Co. (1898), 146 Mo. 481, 48 S. W. R. 646; Black River Lumber Co. v. Warner (1887), 93 Mo. 374, 6 S. W. R. 210: American Bridge Co. v. Bullen Co. (1896), 29 Oreg. 549, 46 Pac. R. 138: Williams v. Crosby Lumber Co. (1896), 118 N. C. 928, 24 S. E. R. 800; Tufts v. Weinfeld (1894), 88 Wis. 647, 60 N. W. R. 992; Muskegon Curtain Roll Co. v. Keystone Mfg. Co.

Kingman v. Hanna Wagon Co. (1898), 176 Ill. 545, 52 N. E. R. 328.

Contract price not fixed —“Lowest jobbing prices."- Where the price to be paid is not fixed by the contract, but is to be the "lowest jobbing price," then the measure will be the difference between such price and the cost of production. Beardsley v. Smith (1895), 61 Ill. App. 340.

3 United States v. Speed (1868), 75 U. S. (8 Wall.) 77.

4 Todd v. Gamble (1896), 148 N. Y. 382, 42 N. E. R. 982.

of profits, it is to be replied that a loss of profits is always a proper subject for compensation if such a loss of profits can be shown with reasonable certainty and without resorting to speculation or conjecture.' As said by the supreme court of the United States, "it by no means follows that profits are not to be allowed, understanding, as we must, the term 'profits as meaning the gain which the plaintiff would have made if he had been permitted to complete his contract. Actual damages clearly include the direct and actual loss which the plaintiff sustains propter rem ipsam non habitam. And in a case of a contract like this, that loss is, among other things, the difference between the cost of doing the work and the price to be paid for it. This difference is the inducement and real consideration which causes the contractor to enter into the contract. For this he expends his time, exerts his skill, uses his capital, and assumes the risks which attend the enterprise. And to deprive him of it, when the other party has broken the contract and unlawfully put an end to the work, would be unjust. There is no rule of law which requires us to inflict this injustice. Whenever profits are spoken of as not a subject of damages, it will be found that something contingent upon future bargains, or speculations, or states of the market, are referred to, and not the difference between the agreed price of something contracted for and its ascertainable value or cost."

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§ 1705. Form of repudiation.- It is not always necessary that the buyer shall, in express terms, repudiate the contract or countermand the order. Such a result may be inferred from his conduct; and where, by the contract, he is to do the first act, as, for example, to give instructions as to the manner of manufacture or to furnish the necessary directions for ship

1 Masterton v. Mayor of Brooklyn (1845), 7 Hill (N. Y.), 61, 42 Am. Dec. 38; Mechem's Cases on Damages, 141.

2 Philadelphia, etc. R. Co. v. How. ard (1851), 54 U. S. (13 How.) 307,

quoted with approval in Hinckley v. Pittsburgh Steel Co., 121 U. S. 264, supra. To same effect: Tahoe Ice Co. v. Union Ice Co. (1895), 109 Cal. 242, 41 Pac. R. 1020, and cases cited.

ment, his failure or refusal to do this may be equivalent to a repudiation.1

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§ 1706. Effect on seller's rights of repudiation by the buyer. As has been seen in a previous chapter, it is not within the power of the vendee to put an end to the contract without the concurrence of the seller. The latter, if he will, may acquiesce in the buyer's act so far as to treat it as a present termination and pursue his remedies as for a present breach. Delivery or even tender of the goods is not necessary where the buyer has thus declared his intention not to receive them.*

§ 1707. Seller not obliged to treat it as a present breach. But, as has also been seen," the seller is not obliged to regard the buyer's repudiation as a present breach. He may not, indeed, thereafter proceed to do more in order to enhance his damages, but he may treat the contract as in force until the time fixed for its performance has arrived, and then have his damages ascertained as though the contract had been broken on that date."

I See Weill v. American Metal Co. (1899), 182 Ill. 128, 54 N. E. R. 1050; Hinckley v. Pittsburgh Steel Co. (1887), 121 U. S. 264; Mechem's Cas. on Damages, 272.

2 See ante, § 1088.

3 See Roehm v. Horst (1900), 178 U. S. 1, 44 L. ed. 953, 20 Sup. Ct. R. 780, quoted fully in notes to § 1089, ante, where other cases will be found fully collected.

4 Pancake v. Campbell (1897), 44 W. Va. 82, 28 S. E. R. 719; Morris v. Cohn (1891), 55 Ark. 401, 18 S. W. R. 384.

5 See ante, § 1088.

"See Kadish v. Young (1883), 108 Ill. 170, 48 Am. R. 548; Mechem's Cas. on Damages, 265; Roebling Sons Co. v. Lock Stitch Fence Co. (1889), 130 Ill. 660, 22 N. E. R. 518.

Kadish v. Young (1883), 108 Ill. 170,

supra, was an action of assumpsit by Young and another against Kadish and another to recover damages for the breach of a contract whereby appellees, on the 15th of December, 1880. sold to appellants one hundred thousand bushels of barley at $1.20 per bushel, to be delivered and paid· for at such time during the month of January, 1881, as appellees should elect. On the next day after the contract was made the appellants gave notice to the appellees that they would not receive the barley and comply with the terms of the contract. The appellees, however, refused to consider the contract broken, and on the 12th of January they tendered to appellants the one hundred thousand bushels of barley, which tender was refused. Within a reasonable time thereafter the ap

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