Case Note & Summary
The dispute arose from a contract between the appellant and the respondent for the sale of canvas at Re. 1 per yard, with delivery to be made via railway receipt from Kanpur to Calcutta. The appellant failed to deliver the railway receipt on the agreed date, leading to the respondent claiming damages for breach of contract. The trial court found that the contract had become impossible to perform and dismissed the suit due to the respondent's failure to prove the market rate for similar canvas in Kanpur on the date of breach. The High Court reversed this decision, ruling that the contract was not impossible to perform and awarded damages based on the market rate in Calcutta. The appellant appealed to the Supreme Court, which focused on whether the respondent had established the damages claimed. The court reiterated the principles of damages under Section 73 of the Indian Contract Act, emphasizing that the plaintiff must mitigate losses and prove the market rate for similar goods. The court concluded that the respondent did not prove the necessary market rate in Kanpur and therefore was not entitled to damages. The appeal was allowed, the High Court's decree was set aside, and the trial court's decision was restored with costs to the appellant.
Headnote
A) Contract Law - Breach of Contract - Measure of Damages - Indian Contract Act, 1872, Section 73 - The court held that the measure of damages for breach of contract is determined by the market price at the time of breach, and the plaintiff must prove the relevant market rate to claim damages. The respondent failed to prove the market rate for similar goods, thus was not entitled to any damages (Paras 1-2).
Issue of Consideration
Whether the respondent was entitled to damages for breach of contract and the measure of such damages.
Final Decision
The Supreme Court allowed the appeal, set aside the High Court's decree, and restored the trial court's decision, ruling that the respondent was not entitled to any damages due to failure to prove the market rate for similar canvas.
Law Points
- Breach of contract
- Measure of damages
- Foreseeable consequence of breach
- Knowledge of parties
- Indian Contract Act
- 1872
- Section 73
