A Seller can default:

(1) By non delivery (including dalrung of wrong goods)

༩་

dalay

in delivery.

The buyer has a right to have the goods delivered to him as agreed or within a reasonable time. If the seller wrongfully fail or refuse so to deliver the goods, the buyer may bring an action against him for damages. The amount of such damages will be measured by the loss to the buyer which is the direct and natural result in the ordinary course of things of the seller's breach of contract. Therefore all the circumstances must be considered in each case in order to estimate the damages, and each case must depend on its own facts.

If the buyer want the goods for a special purpose, which fact is not known to the seller, he cannot recover the damages he has suffered through not being able to carry out that purpose. But if the seller make the contract knowing that the goods are for a special purpose, and with this knowledge fail to deliver the goods, he is liable to pay to the buyer damages for the loss he has suffered through the goods not being delivered as agreed.

If the goods are goods for which there is an available market, the buyer may buy other goods in the market. Then, if he have to pay more for the goods than the contract price, he can recover as damages from the seller the difference between the contract price and the market price at the time when the goods should have been delivered. If the buyer can readily get goods in the market at a price not greater than the contract price, he probably has only a right to nominal damages against the seller; but even in this case he may have a claim for any loss he has suffered by delay.

The buyer also has a right to recover damages for breach of warranty by the seller, and such damages are measured by the loss naturally resulting from the breach.

p.170.

6.179. p. 371

see p. 122

Where the contract is for the sale of specific goods which the seller refuses to deliver, the Court has power to order the actual goods sold to be delivered up to the buyer. This power, however, is very seldom exercised,1 and when it is exercised, the goods usually consist of some unique article which cannot be obtained elsewhere, as, for instance, a picture by some well-known artist.

DOCUMENTS OF TITLE

In business it is customary in many cases to use certain documents as proof of the possession of goods and of the right to dispose of goods. The possession of such a document is treated as possession of the goods; and the goods may be sold and delivered by transferring the document for value to a buyer. The goods can be obtained by production of the document; and the document can be transferred by mere delivery or by indorsement and delivery. Such documents are called "documents of title" to the goods; and the regular transfer of such a document is symbolical of delivery of the goods.

A "dock warrant" is an example of such a document. When goods from aboard ship are landed, they may, instead of being carried away, be given into the custody of a dock company by the person who has a right to dispose of them. In return for the goods the dock company hands to the person depositing them a document which describes the goods, acknowledges the receipt of them, and undertakes to deliver them to the order of the depositor. This document is called a dock warrant. The person to whom it is given may sell the goods and give the buyer the right to have them handed over to him by

1 That is, in England or Ireland; it is exercised quite freely in Scotland,

the dock company by indorsing the dock warrant and handing it to the buyer. The dock company must deliver the goods to any person who produces the dock warrant so indorsed.

Other examples of documents of title to goods are warehouse-keeper's certificates, which are similar in nature to dock warrants, and bills of lading, which will be dealt with later.1 In many cases such documents of title may be bought and sold or otherwise dealt with just as if they were the goods they represent.

Bonded Goods,

1 See p. 179.

a

Ascaipt

Dutiable goods
are put into "bonded warehouses,
by the customs authorities. The owner gats
warrant for his consignment, &
underges the document, an action which
To claim the goods.
producing the

น

selling the stoves
the bugar

the right

༢༩༦༠⪜
indorsed dock-warrant,

see p. 37,38.

p.130.

1138. p. 180..

see p. 120.

PART VII

NEGOTIABLE INSTRUMENTS

IT has been already stated that, as a general rule, one party to a contract can only assign his rights under the contract to a third person, subject to any existing rights against him which the other party to the contract may have.1 Negotiable instruments, however, form exceptions to this general rule.

A negotiable instrument is a document containing a contract, to the ownership of which document is attached all rights under the contract. Whoever is in bona fide possession of such a document is presumed to be the lawful owner of it, and therefore entitled to enforce all rights under the contract. The document, and with it all rights under it, is transferred either by mere delivery or by delivery accompanied by indorsement. And the person who in good faith takes it, takes it free from any rights which might be enforced against the person from whom he takes it, and free from any defect in the title of such person.

An example of a negotiable instrument has already been given in a dock warrant.2 The simplest example possible is a Bank of England note. This is a promissory note. issued by the Bank undertaking to pay a certain amount to the bearer. If a bank-note be stolen by a pick-pocket, and the thief go to a shop and buy an article and give the 2 See ante, p. 120.

1 See ante, p. 38.

bank-note in payment, going away with the article bought and the change, the shopkeeper, who acts innocently, has a perfect right to the note, and to receive payment of it from the Bank. Other examples of negotiable instruments are dividend warrants, debentures payable to bearer, and Exchequer Bills. A bill of lading, also, has many of the qualities of a negotiable instrument. Bills of Exchange and Promissory Notes are, however, the best-known and most widely-used kinds of negotiable instruments.

BILLS OF EXCHANGE1

"A bill of exchange is an unconditional order in writing, addressed by one person (A) to another (B), signed by the person giving it (A), requiring the person to whom it is addressed (B) to pay on demand, or at a fixed or determinable future time, a sum certain in money to or to the order of a specified person (C), or to bearer." A document which does not satisfy this definition, or which orders anything to be done in addition to the payment of money, is not a bill of exchange. A bill of exchange payable on demand (c. g. a cheque) may be stamped with an adhesive penny stamp. Other inland bills and promissory notes must be written on stamped paper, the stamp being impressed, and the value of the stamp depending on the amount for which the bill or note is drawn, i. e. the duty being ad valorem. The duty on foreign bills is payable by adhesive stamps affixed after they come into this country. An inland bill or note cannot be stamped after it is made.

It will be noticed that there are three parties to a bill of exchange: (1) the person who addresses it to another, 1 The law on Bills of Exchange, Cheques, and Promissory Notes is contained in the Bills of Exchange Act, 1882, which constitutes a code on the subject.