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CMA Foundation · Fundamentals of Business Laws and Business Communication · Sale of Goods Act, 1930

Gupta Foods, a buyer, sets up a breach of warranty by the seller in diminution of the price payable for a lot of packing machines. Afterwards it finds it has suffered further loss from the same breach. Under the Sale of Goods Act, 1930, what is the position?

Gupta Foods may still sue the seller for damages for the same breach if it has suffered further damage. Setting up the breach to reduce the price does not bar a later suit, so the buyer can recover its remaining loss.

  1. AIt cannot sue because having reduced the price it has exhausted its remedy
  2. BIt may sue for damages for the same breach if it has suffered further damageCorrect
  3. CIt may sue only if it returns the goods to the seller
  4. DIt may sue only for the amount of the original price reduction

Explanation

Section 59(2) says that setting up a breach of warranty in diminution or extinction of price does not prevent the buyer from suing for the same breach if it has suffered further damage. So the two remedies can be combined to cover total loss. The view that the price reduction exhausts the remedy is wrong because the section expressly preserves the suit.

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