Cases on Breach of Contract of Sale: What Every Business Owner Should Know
The sale of goods is a fundamental aspect of any business. Unfortunately, disputes can often arise due to breach of contract. In this article, we will discuss some prominent cases on breach of contract of sale and how businesses can avoid such situations in the future.
1. Hadley v Baxendale (1854)
In this case, the plaintiff, a mill owner, had a broken crankshaft and required a new one to keep his business running. He contracted the defendant, a carrier, to transport the shaft for him. However, due to the defendant`s negligence, the delivery was delayed, causing the plaintiff to suffer significant business losses.
The court held that the plaintiff could only recover damages that were within the reasonable contemplation of both parties at the time of entering into the contract. In this case, because the defendant was unaware of the importance of timely delivery, the losses incurred were unforeseeable and therefore not recoverable.
The lesson here is that businesses should always be clear about their expectations and communicate them effectively to the other party. This can help to avoid misunderstandings and prevent potential losses.
2. Cutter v Powell (1795)
In this case, the plaintiff, a sailor, had entered into a contract with the defendant, a ship owner, to work for a specific period. However, the plaintiff fell ill and was unable to perform his duties for the last few days of his contract. The defendant refused to pay the plaintiff for the time he was absent, which led to a lawsuit.
The court held that the plaintiff was entitled to receive payment for the time he had worked and also for the time he was unwell. This case highlights the importance of fulfilling contractual obligations, even if unforeseen circumstances arise. Businesses should ensure that their contracts are clear and unambiguous and that all parties understand their obligations.
3. British Steel Corp v Cleveland Bridge and Engineering Co Ltd (1984)
In this case, the defendant company was contracted to manufacture steelwork for a bridge, which they delivered. However, the steelwork was found to be defective, and the plaintiff had to pay extra costs to remedy the situation.
The court held that the defendant was liable for the extra costs incurred by the plaintiff as a direct result of their breach of contract. This case emphasizes the importance of providing goods and services that meet the required quality standards and that businesses should make sure that they deliver on their promises.
Conclusion
These cases on breach of contract of sale highlight the importance of being clear about contractual obligations and fulfilling them. Businesses should take the necessary steps to communicate their expectations to the other party and ensure that the other party understands what is expected of them. They should also deliver on their promises and provide goods and services that meet the required quality standards.
In conclusion, businesses that pay attention to these factors can significantly reduce the risk of disputes arising from breach of contract, saving them time, money, and reputation damage.