LD sold 7kmt sugar to R, C and FFO Banjul at $257.43 per mt. Shipment was ‘per m.v. Dawn currently discharging at Banjul’. An associate of R had already sold 5kmt to B at $290 per mt, for which the sugar was bought. LD knew of the resale and insisted that R buy the full 7kmt and B bought the extra 2kmt at $253 per mt. On August 17 payment was made by R to LD and by B to R for 3kmt. LD was responsible for a delayed discharge, and mean tme the price fell $224 per mt. R said that they would only take the 4,000 m.t. if a reduced price was applied to the whole 7kmt. LD treated R as in default in regards to the 4kmt. R sought damages at the difference between the contract price ($257.43) and the value of the goods when they eventually became available ($224). LD said that R had suffered no loss. They pointed out that R was to receive from B $290 for 5kmt and $253 for the balance and that it was likely that R had obtained payment for the 3kmt discharged at $290 per mt and Reliance had still profited. The arbitrators awarded R damages calculated as claimed.
Held: The profit or loss made by a buyer on a sub-sale is generally irrelevant to the assessment of damages for breach by a seller of a warranty of quality or failure to deliver; but that if the parties had a particular sub-sale within their contemplation when making their contract the buyer might be entitled to have that sub-sale brought into account to increase his damages or the seller might be entitled to have it brought into account in order to reduce the award against him. Where the parties anticiated when the contract was made that the buyer was committed to deliver the same goods to a sub-buyer under a specific contract, principles of remoteness did not require that the sub-sale be disregarded in assessing they buyer’s damages. It was to be taken to have been within the parties’ reasonable contemplation as a serious possibility, or a consequence not unlikely to result from LD being in breach of their obligations, that the loss suffered by R might depend on the impact of the sub-sale to B. The case was remitted to the arbitrators for reconsideration because it was apparent that they had not considered whether or not LD had rebutted the presumption that the damages should be assessed in accordance with section 53 (3) of the 1979 Act.
Judges:
Andrew Smith J
Citations:
[2004] 2 LLR 243
Statutes:
Cited by:
Cited – Transfield Shipping Inc of Panama v Mercator Shipping Inc of Monrovia ComC 1-Dec-2006
The owners made substantial losses after the charterers breached the contract by failing to redliver the ship on time as agreed.
Held: On the facts found the Owners’ primary claim is not too remote. To the knowledge of the Charterers, it was . .
Lists of cited by and citing cases may be incomplete.
Contract, Damages
Updated: 01 May 2022; Ref: scu.246957