Charter v Sullivan - Lecture notes 1 PDF

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Charter v Sullivan

de luxe saloon motor-car which the plaintiff had in stock, together with extras in the shape of a heater and wheel discs, at a total price of £773 17. the sale, if completed, would have given the plaintiff a profit of £97 15s., De f e nda ntwa sg on nab u yac a rf r om t hep l a i n t i ff. Th e nr e f us e dt ob u yi t .the defendant found that another dealer would be prepared to give him, as he thought, better terms, . Pl a i n t i ffs o l di tt os o me o nee l s efor the same price as the defendant had agreed to pay,

namely, £773 17s., including the extras which had been fitted at the defendant's request. The sole issue before the court concerned the measure of damages. . J u d g ea wa r de dpl a i n t i ffd a ma g e sof£97 15s for breach of contract. Defendant appealed on the grounds that the plaintiff had not shown that he had suffered any " loss " directly and naturally resulting" from the defendant's breach and he was entitled only to nominal damages as he had managed to re-sell the car. Defendant argued damages should have been the difference between market price and sale price. 1 county court judge relied on Tho mp s on( W.L. )Lt d.v. Robi n s o n[ Gu nma k c r s )Lt d. and held that the present case came within that decision

d e f e n da nts a y sc a s e sa r edistinguishable on the facts

consistent with the plaintiff's duty to mitigate his damage. The fact that he sold the car quickly is corroborative evidence that there was a public demand for the car. 16

Tho mp s on' scase is simply authority for the proposition —~ that when a seller returns a car to a wholesaler he is entitled to reclaim his loss of profit on an abortive sale But if it is sought to extend the principle to cover a case where there has been a prompt resale, as in the present case, then it is a wrong decision Tho mp s on' scase " applies because the plaintiff has made one less sale than he would have done if there had been no repudiation. The question of law is whether the basic principle of estimating damages in section 50 (2) of the Sale of Goods Act is the general rule. 2)The measure of damages is the estimated loss " directly and naturally resulting, in the ordinary course of events, '' from the buyer's breach of contract.

Pr e c e de n tf o rplaintiff is to be placed in as good a position as if the contract had been

performed in so far as money can do it then he should be awarded the profit which he would have made if the sale had gone through He is of course under a duty to mitigate his loss and cannot say that the defendant owed him the whole value of the car. by reselling, the plaintiff had reduced the loss of the whole value of the car to the loss of profit which he would otherwise have made, and that is the proper estimate of damage. If the quota of cars received by the plaintiff was less than the number of customers, then the plaintiff loses nothing. goods were readily available so that he can meet all demands, then if one customer repudiates, and he mitigates by selling to another, he has lost his profit. The question here is, has it been proved that the supply is not less than the demand? county court judge decided that the plaintiff would have sold another car and made a profit of £97 if the defen- dant had not repudiated. If the defendant is to succeed he has to show that the judge's conclusions of fact are wrong and that the plaintiff could not get " Hillman Minx " cars when he wanted. Section 50 (2) is not what was in the reasonable contemplation of the parties, but what damage naturally resulted to the seller. appeal should be dismissed.

Co l l a r din reply loss on resale is an indirect loss if incurred by a buyer and recoverable only if it was within the contemplation of the parties. Judgements the eye of the law the true measure of the damages, there was an available market for " Hillman Minx " de luxe saloon cars within the meaning of section 50 (3) of the Act, and accordingly that the measure of damages ought, in accordance with the prima facie rule laid down by that subsection, to be ascertained by the difference between the contract price and the market or current price at the time of the defendant's refusal to perform his contract. that the plaintiff could claim no more than nominal damages

The number of sales he can effect, and consequently the amount of profit he makes, will be governed by the number of cars he is able to obtain from the manufac- turers, or by the number of purchasers he is able to find Do e sh eh a v el e s sc a r sf o rpe op l ea n ds ol o s ep r o fit ? Ore q u a lc a r so rmo r et op e o pl e , s oh ed o e s n ’ tl os ep r o fit

prima facie rule which it prescribes should be rejected in favour of the general rule laid down by subsection (2); for it does not by any means necessarily follow that, because the plaintiff sold at the fixed retail price to Wigley the car which the defendant had agreed to buy at the selfsame fixed retail price, but refused to take, therefore the plaintiff suffered no " loss directly and naturally resulting, in the ordinary course " of events " from the defendant's breach of contract. plaintiff's only alternative mode of disposal would be to sell it at the fixed retail price to some other purchaser In Thompson v gunmakers. Judge awarded damages of profit The defendants raised the same argument as has been raised by the defendant in the present case, namely, that there was an available market for a car of the kind in question, therefore, to ascertain the loss (if any) " naturally " resulting, in the ordinary course of events " from the defen- dant's breach of contract, and the measure of that loss must, in my opinion, be the amount, if any, of the profit the plaintiff has lost by reason of the defendant's failure to take and pay for the car he agreed to buy. plaintiff could always find purchasers for all the " Hillman Minx " cars he was able to get. I ft h ed e a lh a dg o net h r ou gha n dt h es u b s e q ue ntd e a lt h e nt he r ewou l dha v eb e e n2s a l e sa n d 2p r o fit s

plaintiff must further show that the sum representing the profit he would have made if the defendant had performed his contract has in fact been lost. Here I think he fails, in view of Winter's evidence to the effect that the plaintiff could sell all the " Hillman Minx" cars he could get. completely destructive of the plaintiff's case on damages. it was for the plaintiff to prove that he did in fact sustain the loss of profit claimed, and this to my mind he wholly failed to do. We have lost " sale of a car " is clearly not enough, particularly when read in

conjunction with his '' Can sell all ' Hillman Minx ' we can " get. Thinks appeal should be allowed where there has in fact been a resale of the goods, the seller has the burden of proving a loss of profit beyond that which on the face of it has been recouped in whole or in part by the resale. It is for this reason that I would allow this appeal. There are two items in the damage claimed, loss of profit on a car heater and on wheel discs, both of which were ordered for the " Hillman " Minx " and for which £7 12s. 6d. in all is claimed. These items might stand on a different, footing from the loss of profit of £90 2s. 6d. claimed for the loss of the sale of the car, but no such distinction was made either at the trial or on the appeal and I would therefore find the plaintiff entitled to 40s. nominal damages only....