CT 2.10 – SALE OF GOODS: BUYER’S REMEDIES
- Right to Reject the Goods: Where there is a breach of a condition. Section 54. Section 36 provides that the buyer does not need to return the goods to the seller when he has rejected them. Monroe V Meyer-Mere rejection does not terminate the contract because the seller can redeliver conforming goods after rejection. Note also that a breach of the implied terms provided in Sections 12-15 may entitle the buyer to reject the goods.
The Right to Reject can be lost WHERE:
- The buyer has waived the breach of condition or has elected to treat it only as a breach of warranty- Section 53, Section 11(1a).
- The contract is not severable and the buyer has accepted the goods or part thereof- Section 11 (1c).
- The contract is for specific goods and the property in the goods have passed to the buyer.
Section 35 (as discussed earlier in this work) deals with situations where the seller is deemed to have accepted the goods.
- Action for non-delivery: The buyer is entitled to this remedy whether property has passed or not. Section 51(1) provides that the measure of damages is the estimated loss directly and naturally resulting in the ordinary course of business from the seller’s breach. The measure of damages is to be assessed based on the market price at the time when the goods ought to have been delivered. Re R and H Hall V H Pim, although the prices of the goods had gone down, the court awarded damages based on the market price when the goods ought to have been delivered. The Hedley V Baxendale (remoteness of damages principle) on this matter requires that the consequential loss should be within the reasonable contemplation of the parties.
- Specific performance: This is an equitable and discretionary remedy of the court granted where damages would not be sufficient. Can be granted only when the goods are specific or ascertained- Section 52. This order compels the seller to deliver the goods to the buyer. It is useful when the goods are unique or of special kind not easily accessible. For example a portrait by a famous artist. In Societes Des Industries V Brome Engineering Co Ltd, the court refused to grant specific performance because the goods could be obtained from the market and the loss could be compensated with damages.
- Action for breach of warranty. In diminution or extinction of the price. The measure of damages is the estimated loss arising directly and naturally form the breach.
- Rescission for Misrepresentation: Where the buyer is induced to contract due to the fraudulent, negligent or innocent misrepresentation of the seller, he may apply to rescind the contract. When rescinded, the contract is treated as though it never occurred.
In conclusion, it has been held in various cases that equitable remedies can apply. As such, the remedy of rescission, and the likes should avail both parties in addition to the statutory and common law remedies.