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There are two types of remedies which the seller has against the
buyer. They are:
Suit for Price: Section 55 of the Sale of Goods Act states two
conditions. The first is that when any goods are passed to the buyer
under the contract to a sale, and the buyer intentionally neglects
payment or refuses to pay for the goods according to the terms
stated in the contract, the seller may sue the buyer for the payment
of the price of the goods. The second provision states that when
payment is due on a particular day, irrespective of whether or not it
has been delivered or not, and the buyer is neglecting the payment
or refusing to pay for the good, the seller may sue the buyer to
recover the price of the goods. In the case the buyer is required to
pay the seller partly in kind and partly in cash, if either of the
payment is not given to the seller, then he has the right to sue the
buyer.
Damage for Non-Acceptance: Section 56 of the Act states that
when the buyer is intentionally and wrongfully refusing to accept
the goods and pay for the same, the seller may sue the buyer for
non-acceptance of goods. The damage is to be calculated on the
basis of the principle which has been given under Section 73 and 74
of the Indian Contract Act, 1872.[2] Section 73 of the Contracts
Act states that when any breach of contract happens, the party who
suffers any loss can recover the amount from the person who
breached the contract. The damage which can be recovered is the
loss which would have occurred in the usual course and about which
the parties knew when the agreed to enter into a contract. When the
loss is calculated, the means which existed to remedy the breach
will also be considered. The market price of the goods regarding
which breach has been done will be ascertained on the basis of the
date on which the good was to be delivered. For instance, X and Y
entered into a contract for the sale of wheat. X had to deliver 100
bags of wheat to Y on 15th of the month. Y refused to take delivery
on 15thand on that day the price of one bag was Rs 5, 000. A suit
was filed by X for non-acceptance on 20th of the month and on that
day the market price for a bag of wheat was Rs 4,500. For the
purpose of the suit, the market price will be considered as Rs 5,000.
Following the principle enshrined in Section 55 and Section 63 of
the Contracts Act. When a date or time is fixed for the
performance of the contract, but due to any reason, some other date
is set, that substituted date will be considered for calculating the
damage caused. When the seller is required to deliver the goods in
installments, and the buyer rejects any one of the installments, the
date on which the installment was to be delivered will be considered
for determining the damage.
Buyer's Remedies against Seller for Breach of Contract
A buyer also has certain remedies against the seller who commits a
breach. These are:
1. Suit for Damages for Non-Delivery- When the seller wrongfully
neglects or refuses to deliver the goods to the buyer, the buyer may
sue the seller for damages for non-delivery. This is in addition to the
buyer's right to recover the price, if already paid, in case of non-
delivery.
2. Suit for price- Where the buyer has paid the price and the goods
are not delivered to him, he can recover the amount paid.
3. Suit for specific performance- When the goods are specific or
ascertained a buyer may sue the seller for specific performance of
the contract and compel him to deliver the same goods. The court
orders for specific performance only when the goods are specific or
ascertained and an order for damages would not be an adequate
remedy. Specific performance is generally allowed where the goods
are of special significance or value e.g. a rare paining, a unique
piece of jewellery, etc.
4. Suit for Breach of Warranty- Where there is a breach of
warranty by the seller, or where the buyer elects or is compelled to
treat the breach of condition as breach of warranty, the buyer cannot
reject the goods. The buyer may, (a) set up the breach of warranty in
extinction or diminution of the price payable by him, or (b) sue the
seller for damages for breach of warranty.
5. Suit for Damages for Repudiation of contract before Due
date-Where the seller repudiates the contract before the date of
delivery, the buyer may adopt any of the following two courses of
action --
A.He may treat the contract as rescinded and sue the seller for
damages. This is also known as 'damages for anticipatory breach'.
The damages will be assessed according to the prices prevailing on
the date of breach.
B. He may treat the contract as subsisting and wait till the date of
delivery. The contract remains open at the risk and for the benefit of
both the parties. If the seller subsequently chooses to perform there
shall be no damages otherwise he shall be liable to damages
assessed according to the prices on the day stipulated for delivery.
6. Suit for interest- The buyer may recover such interest or special
damages, as may be recoverable bylaw. He may also recover the
money paid where the consideration for the payment of it has failed.
In the absence of a contract to the contrary, the court may award
interest, to the buyer, in a suit by him for the refund of the price in a
case of a breach on the part of the seller, at such rate as it thinks fit
on the amount of the price from the date on which the payment was
made.