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Monetary Remedies Notes

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S.G.A. ss. 37, 49-53
Seller's Monetary Remedies
S37 - Buyer's liability for not taking delivery of the goods
(1)When the seller is ready and willing to deliver the goods, and requests the buyer to take delivery, and the buyer does not within a reasonable time after such request take delivery of the goods, he is liable to the seller for any loss occasioned by his neglect or refusal to take delivery, and also for a reasonable charge for the care and custody of the goods.
(2)Nothing in this section affects the rights of the seller where the neglect or refusal of the buyer to take delivery amounts to a repudiation of the contract.
S49 - Action for Price
NOTE: S49(2) is the one exception to the rule that price isn't payable until property passes -> although there may be others (see Res Cogitans) -> S49(2) is also unlikely to apply in a CIF context, where it's usually payment against documents
(1)Where, under a contract of sale, the property in the goods has passed to the buyer and he wrongfully neglects or refuses to pay for the goods according to the terms of the contract, the seller may maintain an action against him for the price of the goods.
(2)Where, under a contract of sale, the price is payable on a day certain irrespective of delivery and the buyer wrongfully neglects or refuses to pay such price, the seller may maintain an action for the price, although the property in the goods has not passed and the goods have not been appropriated to the contract.

S50 - Damages for non-acceptance
(1)Where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may maintain an action against him for damages for non-acceptance.
(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.
(3)Where there is an available market for the goods in question the measure of damages is prima facie to be ascertained by the difference between the contract price and the market or current price at the time or times when the goods ought to have been accepted or (if no time was fixed for acceptance) at the time of the refusal to accept.
Buyer's Monetary Remedies
S51 - Damages for non-delivery
(parallels S50)
(1)Where the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer may maintain an action against the seller for damages for non-delivery.
(2)The measure of damages is the estimated loss directly and naturally resulting, in the ordinary course of events, from the seller's breach of contract.
(3)Where there is an available market for the goods in question the measure of damages is prima facie to be ascertained by the difference between the contract price and the market or 1 current price of the goods at the time or times when they ought to have been delivered or (if no time was fixed) at the time of the refusal to deliver.
S52 - Specific performance
NOTE: only applies to specific or ascertained goods
(1)In any action for breach of contract to deliver specific or ascertained goods the court may,
if it thinks fit, on the plaintiff's application, by its judgment or decree direct that the contract shall be performed specifically, without giving the defendant the option of retaining the goods on payment of damages.
(2)The plaintiff's application may be made at any time before judgment or decree.
(3)The judgment or decree may be unconditional, or on such terms and conditions as to damages, payment of the price and otherwise as seem just to the court.
S53 - Remedy for breach of warranty
(1)Where there is a breach of warranty by the seller, or where the buyer elects (or is compelled) to treat any breach of a condition on the part of the seller as a breach of warranty,
the buyer is not by reason only of such breach of warranty entitled to reject the goods; but he may—
(a)set up against the seller the breach of warranty in diminution or extinction of the price, or
(b)maintain an action against the seller for damages for the breach of warranty.
(2)The measure of damages for breach of warranty is the estimated loss directly and naturally resulting, in the ordinary course of events, from the breach of warranty.
(3)In the case of breach of warranty of quality such loss is prima facie the difference between the value of the goods at the time of delivery to the buyer and the value they would have had if they had fulfilled the warranty.
(4)The fact that the buyer has set up the breach of warranty in diminution or extinction of the price does not prevent him from maintaining an action for the same breach of warranty if he has suffered further damage.
S49(1) Action for Price does not arise if property has not passed to buyer
Stein Forbes v. County Tailoring (1916) 115 L.T. 215
Facts (from Napier v Dexters)
- the facts were that a large quantity of sheepskins had been shipped and that the documents in the case which were formal documents, such as a bill of lading-here apparently there was no bill of lading at all but a mere mate's receipt-were in the hands of bankers, and in those circumstances, particularly as so far as I am aware the sheepskins were not perishable goods,
I am not at all surprised that the Judge had no difficulty in coming to a decision that it was quite plain that the seller or his banker reserved the jus disponendi (right of disposal)
- Three lots of sheepskins, buyers refused to take delivery of third
Colley v. Overseas Exporters [1921] 3 K.B. 302
- Unascertained goods were sold f.o.b.
- The seller sent them to the port of shipment, but, owing to the failure of the buyer to name an effective ship, he was prevented from putting them on board

The defendants instructed the plaintiff to consign the goods to the Alexandra Dock
Station at Liverpool, c/o Daniel Maccabe, Ld., shipping agents, for shipment on board steamship Kenuta .
2 The plaintiff duly dispatched the goods to the station named on February 3, 1921, but unfortunately the Kenuta was withdrawn from service by her owners, and four other vessels which were in turn substituted by the defendants for the Kenuta were all prevented from one cause or another from taking the plaintiff's belting on board,
with the result that after the goods had been lying at the dock station for more than two months they were still not shipped
- Plaintiff sellers brought an action for the price
Held (McCardie J)
- 1) There can be no action for price until property has passed

"In my opinion (subject to what I say hereafter as to estoppel) no action will lie for the price of goods until the property has passed, save only in the special cases provided for by s. 49, subs. 2. This seems plain both on the code and on common law principle.
I have searched in vain for authority to the contrary. A clear distinction exists between cases where the default of the buyer has occurred after the property has passed and cases where that default has been before the property has passed."
o Although NOTE: s49(2) was only in the old SGA, appears to not be in the SGA 1979
- 2) Seemed to reaffirm Benjamin's: in such cases the seller can only rely on a special action for damages for non-acceptance

"And the learned editor adds: "Where the property has not passed, the seller's claim must, as a general rule, be special for damages for non-acceptance.""
- 3) Otherwise, every action for damages for repudiatory breach in sale of goods could be converted into an action for price

"Here the substantial allegation against the defendants is that their default prevented the plaintiff from passing the property and so entitling him to the price. Just the same default however would, in substance, have been committed if the defendants had repudiated the contract before the goods had been sent from Sheffield. So too every buyer who refuses to take delivery of unascertained goods and thereby prevents the transference of property in them from the seller commits a similar default. It the ingenious contention of Mr. Willes were correct it would be difficult to imagine a case of sale of goods, even though unascertained, to which Mackay v. Dick would not apply"
- 4) There is an exception for estoppel: if the Ds represent that property has passed to them,
and the Cs rely on this to their detriment, the Ds are estopped from denying it

However, no evidence of this in the present case

"If therefore the defendants in this case represented to the plaintiffs facts showing that the property in the goods had passed to them, and if also the plaintiff had believed that representation and had acted upon it to his damage, then the defendants would, I conceive, be estopped from denying that the property had passed to them and that the price was therefore payable to the plaintiff: see Knights v. Wiffen .
o I am satisfied that there is no estoppel on the facts and documents here before me."
o "The defendants made no misrepresentation of fact. The plaintiff has not acted on any statement or relied on any misleading conduct of the defendants"

Napier v. Dexters (1926) 26 Ll. L. Rep. 62, 184
- Case about "pushing property in"
- In this case, seller essentially wanted to argue that they hadn't reserved any right of disposal,
thereby pushing property into the buyers hands so they could bring an action for price!

3 But, as Burrows points out, it seems possible for the seller to push property away, it seems difficult to imagine the seller pushing property in, since a common intention is required for property to be transferred
In this case, the sellers did not actually manage to push property in

Since it was a mate's receipt that did not actually retain title

Thus, dicta about pushing property in is obiter (see CA judgement)
oFactsContract of sale for 20 tones of London sweet fat FOB
The buyers instructed the goods to be delivered alongside the steamship Friedrich Jurgen at
Fenning's Wharf on Oct, 30.
o Only 93 barrels containing 16 tons 18 cwts. were delivered, shipped and taken by the
Friedrich Jurgen to Hamburg (less than contract quantity)
- Question of whether buyer could reject and whether seller could sue for price
Held (Roche J)
- 1) Counsel for seller argued that price was payable for the quantity delivered (93 barrels), at the contract rate

But this argument assumes that property has passed in the 93 barrels

Counsel for buyer argued that no property had passed, because the seller reserved a right of disposal

They relied on Stein Forbes v County Tailoring and Colley v Overseas Exporters to argue that a right of disposal had been reserved
- 2) Distinguished Stein Forbes -> that case concerned sheepskins which were "not perishable goods" -> thus it was "quite plain that the seller or his banker reserved the jus disponendi
(right of disposal)"
- 3) Whereas in the present case, the goods consisted "of a comparative small quantity of fat"
"which is capable of deterioration more or less rapidly"
o "It was going to a foreign country; and I can quite understand as a matter of business probability that the sellers might very well prefer under such circumstances to confine themselves to their personal remedy against the debtor in London rather than the reservation of the right of disposition in a foreign country, over goods which were capable of deterioration and might have to be sold under circumstances amounting to a forced sale"
- 4) Thus, held that there was no right of disposal reserved by the sellers (despite lack of payment from buyers) -> upheld the arbitrator's award that price was payable with respect to the quantity delivered

"On that ground I hold that the arbitrator's award that the price is due is right in law."
- [Some suggestion in the case that because the reservation of the right of disposal was entirely for the seller's benefit, it was open to him to waive it]
Held (CA)
- 1) "There is a further point that Roche, J., took. He apparently took the view that it may be that the buyers' contention is right, and that the seller reserved the jus disponendi by virtue of his contract, and this document. But assuming that to be so, in my opinion (he says) it was competent for the seller in the circumstances to waive the condition precedent in his favour;
and waiving that condition precedent in his favour the acceptance of the goods was sufficient to justify the claim for the price at the contract rate."
- 2) "I can see no fault in law in that view of the learned Judge. Therefore, whether you take the view I first indicated, that on these materials the buyers failed in proof, or whether you take the view adopted by the Judge-whichever view is taken is in my opinion sufficient to justify the decision of the Judge."

4 White & Carter (Councils) v. McGregor [1962] A.C. 413
- Suing for agreed sum (and by analogy SP) is only available where one party can complete his obligations without the cooperation of the other

Lord Reid suggests that continuing performance and suing for agreed sum is only possible where the party has a legitimate interest in doing so, but unclear what this could be
- The appellants, advertising contractors, agreed with the representative of the respondent, a garage proprietor, to display advertisements for his garage for three years. On the same day the respondent wrote requiring them to cancel the contract on the ground that his representative had mistaken his wishes, but they refused, and five months after the date of the contract began the display in accordance with it.
o The contract provided: "In the event of an instalment ... being due for payment, and remaining unpaid for a period of four weeks or in the event of the advertiser being in any way in breach of this contract then the whole amount due for the 156 weeks or such part of the said 156 weeks as the advertiser shall not yet have paid shall immediately become due and payable."
- The appellant then sued the respondent for the agreed sum under the contract
- Lord Reid, Lord Tucker, Lord Hodson in the majority

Lord Morton and Lord Keith dissenting
Lord Hodson (with whom Lord Tucker agreed)
- 1) Where there is a repudiatory breach, the innocent party is not bound to accept it, he can choose to keep the contract alive

"It follows that, if, as here, there was no acceptance, the contract remains alive for the benefit of both parties and the party who has repudiated can change his mind but it does not follow that the party at the receiving end of the proffered repudiation is bound to accept it before the time for performance and is left to his remedy in damages for breach."
- 2) Thus, in a case of anticipatory beach, he can either accept repudiation and sue for damages, or keep the contract alive and wait for the date of performance of the guilty party
(and bring claims on that date)
o "When the assistance of the court is not required the innocent party can choose whether he will accept repudiation and sue for damages for anticipatory breach or await the date of performance by the guilty party. Then, if there is failure in performance, his rights are preserved."
- 3) "equity will not rewrite an improvident contract where there is no disability on either side"
- 4) To hold otherwise would introduce a new legal doctrine that a party would not be held to his contract unless the Court thought it reasonable to do so, which is undesirable

"To hold otherwise would be to introduce a novel equitable doctrine that a party was not to be held to his contract unless the court in a given instance thought it reasonable so to do"
- 5) The alternative would also introduce legal uncertainty

"This would introduce an uncertainty into the field of contract which appears to be unsupported by authority either in English or Scottish law"
Lord Reid
- 1) In the case of anticipatory breach, the innocent party can choose to accept the repudiation
(and sue for damages), or may disregard/refuse to accept it, which keeps the contract alive

5 "If one party to a contract repudiates it in the sense of making it clear to the other party that he refuses or will refuse to carry out his part of the contract, the other party, the innocent party, has an option. He may accept that repudiation and sue for damages for breach of contract, whether or not the time for performance has come;
or he may if he chooses disregard or refuse to accept it and then the contract remains in full effect."
2) Counsel argued that this only applied to allowing the innocent party to wait until the date at which performance became due, not to incur needless expenditure to extract a higher amount of compensation 3) If a party has no legitimate interest, financial or otherwise in performing the contract rather than claiming damages, he should not be allowed to continue performance and sue for the agreed sum

"It may well be that, if it can be shown that a person has no legitimate interest,
financial or otherwise, in performing the contract rather than claiming damages, he ought not to be allowed to saddle the other party with an additional burden with no benefit to himself. If a party has no interest to enforce a stipulation, he cannot in general enforce it: so it might be said that, if a party has no interest to insist on a particular remedy, he ought not to be allowed to insist on it. And, just as a party is not allowed to enforce a penalty, so he ought not to be allowed to penalise the other party by taking one course when another is equally advantageous to him."
o "If I may revert to the example which I gave of a company engaging an expert to prepare an elaborate report and then repudiating before anything was done, it might be that the company could show that the expert had no substantial or legitimate interest in carrying out the work rather than accepting damages: I would think that the de minimis principle would apply in determining whether his interest was substantial, and that he might have a legitimate interest other than an immediate financial interest. But if the expert had no such interest then that might be regarded as a proper case for the exercise of the general equitable jurisdiction of the court"

The Res Cogitans [2016] UKSC 23, [2016] A.C. 1034
- Lord Mance suggests that there could be common law claims for price falling outside S49,
even for a contract of sale governed by the SGA (i.e. the SGA did not fully exclude the common law in this area)
o But not very clear when such common law claims would arise?
o Clearly the risk must have passed to the buyer, but not sure what else is required
- NOTE: Lord Mance's remarks are obiter, since they found that the contract here wasn't a contract of sale in the end (but rather a sui generis contract)
- Contract of sale to shipowners of bunkers of fueloil and gasoil

Contract provided for payment 60 days after delivery and contained both a retention of title clause under which property was not to pass to the owners until the bunkers had been paid for in full and a clause entitling the owners to use the bunkers to propel the vessel from the moment of delivery
- Question of whether the contract was a "contract of sale of goods" under the SGA 1979 since there was no obligation to transfer property (given that parties contemplated some fuel would be used up before property could even be transferred)
o Counsel for shipowners argued that they were not liable for the price, because the seller (first supplier) had not discharged his obligation to pass property (under S49),

6 because the first supplier had not even gained property in the bunkers due to their own insolvency and failure to pay their suppliers
- Commercial relevance: shipowners were concerned that they might be liable twice over:
having to pay the first supplier and then also the original supplier (who had retention of title)
Held (Moore-Bick LJ with whom Longmore LJ agreed)
- 1) If one party has agreed to transfer property in goods to another in return for a money payment, then the contract will be one for the sale of goods, and SGA will apply

"The first question is "What have the parties undertaken to do?" If one party has agreed to transfer property in goods to another in return for a money payment, the contract will be one for the sale of goods and the incidents described in the 1979 Act will apply to it."
- 2) The parties necessarily contemplated that some fuel would be used up before payment was due, thus this was only a contract to sell whatever remains, rather than a contract to sell the contract quantity

"Whenever the contract provides that property is to pass on payment and that anything more than a minimal part of the goods may be consumed before payment is due, the parties necessarily contemplate that part of the goods may not exist at that time. In truth, therefore, it is not an agreement to sell the nominal contract quantity,
but an agreement to sell whatever remains at the time of payment"
- 3) In fact, parties contemplated that a large part, if not all of the bunkers would cease to exist before payment was due

"The critical terms, in my view, are to be found in the agreement for 60 days credit and in clauses H1 and H2, which provide that property in the bunkers is not to pass until they have been paid for in full but that the owners have the right to use them for the propulsion of the vessel from the moment of delivery"
o "the parties contemplated that a large part, if not all, of the bunkers would or might be consumed within 60 days of delivery and as a result would cease to exist"
- 4) Furthermore, "it is no longer possible to transfer property in goods once they have ceased to exist"
o "even if the goods have been only partly consumed, it is not possible to transfer title in the whole of the goods covered by the contract"
o Thus, simply not possible for property in the goods covered by the contract to pass on payment
- 5) The present contract "is a contract under which goods are to be delivered to the owners as bailees with a licence to consume them for the propulsion of the vessel, coupled with an agreement to sell any quantity remaining at the date of payment, in return for a money consideration which in commercial terms can properly be described as the price."
o "That may not satisfy the definition of a contract of sale of goods in section 2(1) of the 1979 Act, but there is no reason why the incidents of a contract of sale of goods for which the Act provides should not ap-ply equally to such a contract at common law, save to the extent that they are inconsistent with the parties' agreement"
- 6) The SGA only applied to the limited section of the contract that did concern the transfer of property -> sufficient for S12 to be implied

"Since the contract provided for the transfer to the owners of property in any part of the bunkers remaining at the time of payment, it was to that extent a contract for the sale of goods to which the Act, including the implied condition in section 12, applied"
- 7) Therefore, the first supplier's failure to pass title to the residue remaining was a breach,
but not a repudiatory breach

"A failure to pass title to any residue remaining at the time of payment would therefore involve a breach of contract, but it would not be one which entitled the owners to treat the contract as a whole as discharged, unless (contrary to all 7

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