TAMIL NADU NATIONAL LAW UNIVERSITY, TIRUCHIRAPPALLI

Submitted for the internal assessment for the course of

B.A., LL. B (Hons.) – Third Semester
Academic Year: 2020-2021

Subject: Contracts II
Problem Solving Assessment

Course Faculty: Ms. Deepika Sivakumar,

Professor(Law), TNNLU.
Prof. K Govindramjan,
Professor(Law), TNNLU.

Submitted By: Ms. Swati Pragyan Sahoo (REG NO. BA0190053)

Ms. Sonali Priyadarsani (REG NO. BA0190048)
PLAINTIFF- Mr. Jiby (Seller, Owner of Maria Commodities Limited)
DEFENDANT- Mr. Subbu (Buyer, Director of WellCare Hospital)
STATEMENT OF FACTS
1. The Defendant Mr. Subbu, is the Director of the WellCare Hospital and the Plaintiff Mr.
Jiby is the owner of Maria Commodities Ltd, who also provides for delivery services.
2. The Plaintiff was approached by the Defendant for the monthly supply of Hospital
Essentials and the Defendant ordered for 100 cans of spirits. The time period for such
delivery was stipulated for 5 days and the same had to be completed within the 5 days.
3. Considering the urgency of the situation at hand the Plaintiff couldn't wait for glass
bottles which are ordinarily used for the storage and ultimately proceeded with the
transport of the spirits in plastic containers.
4. On the way of the delivery the truck encountered a sudden mass protests by certain
political party with regard to the arrest of their party leader due to which the truck was
made to stop in the side of the highway for one whole day in the sun.
5. At the time of delivery, it was discovered that the goods were perished, i.e., the spirits
ordered were less in quantity than the required quantity.
6. Since, the conditions of the contract were not fulfilled the Defendant refused to pay for
the transportation services and also reduced quantity of goods.
7. The Plaintiff has approached the court seeking remedy for the repayment for his delivery
services as well as for the full payment.
ISSUES RAISED
1. Whether there was a breach on the part of the Plaintiff in the performance of the Contract.
2. Whether the Contract is enforceable.
3. Whether the Plaintiff is entitled to full payment and repayment of his delivery services.
PLAINTIFF: Mr. Jiby
ISSUE 1: WHETHER THERE WAS A BREACH ON THE PART OF MR. JIBY IN THE
PERFORMANCE OF THE CONTRACT?
In the present case, Mr. Jiby, the plaintiff, delivered the spirits to Mr. Subbu as mentioned in
the contract. Although, the quality of the goods delivered was lesser than what was
contracted, it was due to the unforeseen circumstances arising during the transit of the spirits.
Therefore, he has not caused any breach in the performance of the contract neither was there
any negligence on his part. Considering the case of Howell v. Coupland1, where the farmer
entered into a contract for delivery upon harvesting the following autumn, 200 tons of
potatoes to come from his farm. In fact, only 80 tons were harvested. The buyer accepted
delivery of the 80 tons and brought an action for damages for non-delivery of the balance of
120 tons. The Court held that the unforeseen potato blight which caused the reduced amount
of potatoes being harvested, released the seller from his obligation to deliver any more than
what had been harvested. The contributing factor to this decision was that the buyer was
happy to accept the delivery of 80 tons. In the present case, the characteristics and nature of
the contract performed can be put forth as follows:

1
Howell v. Coupland, (1876) 1 QBD 258.
 Since the delivery of the spirits had to be done in 5 days, Mr. Jiby acted in the best
possible manner by using the available plastic containers, so that the delivery is not
delayed. This was in the best interest of both the parties.
 The unforeseen circumstance of sudden mass protests led to the delivery of spirits in a
lesser quantity than required which was not the fault of Mr. Jiby as he could not have
predicted such a situation. Also, had the circumstances been normal, the spirits would not
have lessened in their quantity at the time of the delivery.
Clearly, from the facts stated above, it can be construed that there was not any breach or
negligence on the part of the Plaintiff. Rather, all his actions were practical enough to
complete the delivery of the goods on time. In the case of Norfolk Term. Corp. v. United
States Lines2, it was held that at common law, carrier is absolutely liable for safe carriage and
delivery of its cargo; only exceptions occurring when carrier is able affirmatively to prove
that cargo was damaged or destroyed by act of shipper, act of God, act of public enemy, act
of public authority, or inherent nature of cargo. Taking into consideration the case mentioned
above, it is quite clear that the unforeseen circumstance is an exception leading to the non-
liability of the plaintiff for any breach or negligence. Since, it is well established that Mr. Jiby
was not at fault and did not cause the breach of the contract, he can sue Mr. Subbu for
damages arising out of the non-performance or breach of the contract owing to the non-
payment of the services and transportation charges. Therefore, Mr. Jiby should not be held
liable for the breach of the contract in the prevailing circumstances.

ISSUE 2: WHETHER MR. JIBBY IS ENTITLED TO FULL PAYMENT &

REPAYMENT OF HIS DELIVERY SERVICES.
In the present case, the Plaintiff shall be entitled to full payment for his services and other
delivery charges as agreed upon in the contract. According to Section 37(1) of the Sale of
Goods Act, 1930, “Where the seller delivers to the buyer a quantity of goods less than he
contracted to sell, the buyer may reject them, but it the buyer accepts the goods so delivered
he shall pay for them at the contract rate.” Here, such acceptance of the goods delivered is
evident from the fact that neither Mr. Subbu refused to accept them nor did he inform Mr.
Jibby about any kind of refusal. Rather, he agreed to pay for the services but only for half of
it which is contrary to Section 37(1) as mentioned above. Referring to the case of Suresh
Kumar Rajendra Kumar v. K Assan Koya & Sons3, where there was a shortage of 522 kgs of
rice out of an agreed quantity of 16,000 kgs of rice and the slight wetness in respect of about
40 bags of rice. The Court was of the view that this could be reasonably characterised only as
deterioration in the quantity and quality necessarily incidental to the course of transit from
Jogbani to Calicut and the loss if any on account of such deterioration is liable to be borne by
the defendant and the defendant was not justified in refusing to take delivery on those
grounds. The Court held that it is only a slight deficiency which comes within the "de
minimis rule" and that the defendant was not justified in rejecting the goods even under
Section 37(1) of the Sale of Goods Act. Also, in the case of Dudhia Forest Co-op. Socy. v.
Mohamed & Co.,4 where it was observed thus :"It is the duty of the seller to deliver to the
buyer the quantity of goods stipulated in the contract. However a slight deficiency in the
quantity will not entitle the buyer to reject the goods or claim damages on the principle de.
minimis non curat lex, because some flexibility in such contracts of sale of goods In bulk is
unavoidable and trivial shortfall in quantity must be overlooked. If the difference is, however,
substantial, the buyer would be, justified in resorting to Section 37(1) of the Sale of Goods
2
Norfolk Term. Corp. v. United States Lines, 215 Va. 80, 205 S.E.2d 400, 1974.
3
Suresh Kumar Rajendra Kumar v. K Assan Koya & Sons AIR 1990 Ker 20.
4
Dudhia Forest Co-op. Socy. v. Mohamed & Co., 1980 Guj LR 272.
Act.” As can be deduced from the above mentioned cases, the plaintiff is entitled to be paid
the full payment in lieu of the services provided.
What is to be considered in the present case is the question whether the defendant was
justified in refusing to take delivery on the ground that he contracted for more quantity but
got less of it in the delivery. In the nature of the contract entered into between the parties and
the law on the point the defendant was not justified in refusing to take delivery in any of the
above grounds. As we have already explained under the contract the seller's responsibility is
to deliver the goods in a reasonably safe manner to the place of destination and the risk of
deterioration of goods in quantity and quality necessarily incidental to the course of transit is
that of the buyer. This is also the general law unless otherwise agreed is clear from the
provisions contained in Section 40 of the Indian Sale of Goods Act which is to the following
effect. As stated in Section 40 of the Sales of Goods Act, “Where the seller of goods agrees
to deliver them at his own risk at a place other than that where they are when sold, the buyer
shall, nevertheless, unless otherwise agreed, take any risk of deterioration in the goods
necessarily incident to the course of transit.”
Therefore, it is well established that the defendant is liable to pay the plaintiff for the delivery
of goods and also the transportation charges under Section 37(1) & Section 40 of the Sale OF
Goods Act.

ISSUE 3: WHETHER THE CONTRACT IS ENFORCEABLE?

The contract is enforceable and Mr. Jibby is entitled to full payment for the services
provided. In the case of Sainsbury v Street,5there was a contract of sale for crops. Only part
of the crops was available. The courts said that the contract could not be frustrated just
because the quantity of the crops demanded were not available. It was argued that where only
part of the goods have perished, the seller might be required to make the remaining
(unparished) goods available to the buyer. The Court held that where a buyer contracts with a
seller to purchase a specific portion of a crop and performance becomes impossible without
the seller’s default, the seller is excused the payment of damages under Sale of Goods Act,
s.5(2) and s.61(2). Seller is however obliged to deliver the actual tonnage harvested.
Depending upon the judgement of this case, it can be said that since a part of unparished good
was delivered Mr. Subbu is ought to accept it and pay for it accordingly. As mentioned in
Section 55(1) of the Sale of Goods Act, “Where under a contract of sale the property in the
goods has passed to the buyer and the buyer wrongfully neglects or refuses to pay for the
goods according to the terms of the contract, the seller may sue him for the price of the
goods.” In the present case, if Mr. Subbu is refusing to pay for the delivery as agreed under
the terms of contract, he shall be liable for breach of contract under Section 73 of the Indian
Contract Act & Section 55(1) of the Sale of Goods Act. Referring to Section 56 of the Sale of
Goods Act, where the buyer wrongfully neglects or refuses to accept and pay for the goods,
the seller may sue him for damages for non-acceptance. Therefore, Mr. Subbu is liable for
breach of contract and can be sued by the Plaintiff for the price of the goods at the contract
rate as well as for the damages.
DEFENDANT: Mr. Subbu
ISSUE 1: WHETHER THERE WAS A BREACH ON THE PART OF THE PLAINTIFF IN
THE PERFORMANCE OF THE CONTRACT.

5
Sainsbury v Street, (1972) 1 WLR 834.
In Associated Cinemaa of America, Inc v World Amusement Co.6, it was stated that “A
breach of contract occurs when a party thereto renounces his liability under it, or by his own
act makes it impossible that he should perform his obligations under it or totally or partially
fails to perform such obligation.” In the instant case, defendant Mr. Subbu had entered into a
contract with Mr. jiby for the delivery of 100 cans of spirits. But the plaintiff delivered lesser
quantity of goods as the rest had evaporated during the transit. Moreover, the delivery was
done in plastic containers and not in the regular glass bottles that are used for the delivery.
Hence, they failed to deliver the required amount of spirits and also did not comply with the
contract entered into by both the parties.
It is evident that there has been an partial performance of the terms of the contract and that
signifies that there has been a breach by the plaintiff in the performance of the contract. The
breach by the plaintiff has led to causing of loss to the defendants who were in urgent need of
the specified quantity of spirits within 5 days.

ISSUE 2: WHETHER THE CONTRACT IS ENFORCEABLE.

In the present case, the goods at question i.e., the spirits delivered by the plaintiff were
perished and hence, the defendant is not liable to accept the goods. Under the sale of goods
act, 1930, the term ‘perishing’ signifies not only the goods that are perished rather also
damage to the goods so that the goods have ceased to exist in the commercial sense. Under
Section 8 of the Sale of Goods Act, 1930, it has been stated that in case of the goods being
perished, the agreement can be avoided. In the case of Barrow, Lane and Ballard Ltd v
Philip Phillips Co Ltd7, the buyer entered a contract with the sellers for the sale of a specific
lot of goods, which consisted of 700 bags of Chinese ground nuts still in their shells. The lot
was stored in the warehouse of a wharf company. Both the sellers and the buyer were
completely ignorant of the fact that 109 bags had been stolen before the contract had been
formed. Some 150 bags were delivered to the buyer after the original theft had taken place,
but after this initial delivery, the remaining bags were also stolen. The House of lord applying
the Sec-6 of the sale of goods act, 1979 held that forcing the buyer to accept smaller quantity
is synonymous to forcing him to accept something that he had not contracted to take and that
would be an injustice.
Further, Section 37 of the sale of goods act empowers the buyer to rejects the delivery in case
where the seller delivers to the buyer a quantity of goods less than he contracted to sell.
Hence, the defendant has the rights to reject the spirits that are delivered by the plaintiff as
they are less in quantity than the contracted amount. Therefore, since the quantity of goods
delivered was definitely less than the exact quantity contracted to be delivered, the defendant
has a right to reject the entire goods as provided in Section 37(1) of the Sale of Goods Act.
Thus, the contract is not enforceable and hence, void on account of being perished. The
respondents have beard loss due to the delayed delivery of the goods of the petitioners and
hence, the petitioners should be held liable for the loss caused to the respondents owing to the
non-performance of the contract. And compelling the respondent to accept the delivery of the
spirits that were in less quantity than what was ordered by the respondent, is injustice towards
him as it was not the intention of the respondent to contract for the lesser quantity of the
spirits in the first place and hence the respondents are not liable to pay for the delivery.

6
Associated Cinema of America, Inc v World Amusement Co.,
7
ISSUE 3: WHETHER THE PLAINTIFF IS ENTITLED TO FULL PAYMENT &
REPAYMENT OF HIS DELIVERY SERVICES.
In the case of Asfar & Co. Ltd v Blundell8, dates were shipped on a barge under bills of
lading. On arrival at the port of discharge it was found that the dates still looked like dates.
The insurance underwriters claimed therefore that the dates had not perished they were
impregnated with sewage and sea water, but were still dates. It was held that Freight was not
payable in respect of them, the nature of the thing had been altered. Further, in  Blackburn
Bobbin Co Ltd v TW Allen & Sons Ltd 9, where the seller failed to deliver Finnish timber,
and the nearest substitute which the buyer could obtain was English timber which involved
more expenditure, in cutting and also more wastage, it was held that the buyer was entitled to
claim the extra cost since the buyer had acted reasonably in mitigating his claim.
Under Section 26 of the sale of goods act states that ‘Unless otherwise agreed, the goods
remain at the seller’s risk until the property therein is transferred to the buyer’. In the present
case, since the property has not been transferred to the buyer, the risk lies on the seller and
hence, the petitioners are at fault of casing damage to the goods and hence, the respondents
are under no obligation to carry the aftermaths of such damage caused. Further, since there
has been no transfer of goods, the goods remain the seller’s risk and thus, the respondents is
not liable to pay for the risk that he has not assumed. Section 39(2) of the sale of goods act
states that “Unless otherwise authorised by the buyer, the seller shall make such contract with
the carrier or wharfinger on behalf of the buyer as may be reasonable having regard to the
nature of the goods and the other circumstances of the case. If the seller omits so to do, and
the goods are lost or damaged in course of transit or whilst in the custody of the wharfinger,
the buyer may decline to treat the delivery to the carrier or wharfinger as a delivery to
himself, or may hold the seller responsible in damages.” The seller has not proposed any such
contract the buyer and since, the seller not obliging with his duty and responsibility shall be
held liable to carry the burden of the loss caused due to such irresponsibility. The absence of
any such prior contract for any such circumstances, makes the seller entirely responsible for
the damages caused to the goods.
In the instant case, the defendant are alleging the plaintiff for the damages caused for non-
delivery under the Section 57 of the Sale of Goods Act. The plaintiff has neglected in the
delivery as a result of which damages have been suffered by the defendant and thus the
former is entitled to compensate for the damages caused.
DECISION
Considering the contentions of the plaintiff and the defendant, it can be concluded that the
plaintiff has not abided by the terms of the contract but the same has happened due to
unforeseeable circumstances. Taking account of the factor that although the goods are
perished but not the entire of it has and the goods are divisible and the same can be
segregated and supplied to the defendant. The court in Dudhia Forest Co-op. Socy. v.
Mohamed & Co, has had held a similar view and stated that a slight difference in the quantity
can be neglected. So, in the present case, the difference in the quantity can be neglected and
the contract shall be enforceable. And the defendant is liable to pay for the delivery of the
transportation and the goods that it receives. Also, since there is a delivery of the said goods
which have been accepted by the Defendant, him not paying for it shall make him liable for
breach of contract as well. According to the law, the Plaintiff is entitled to be paid under

8
Asfar & Co. Ltd v Blundell [1896] 1 QB 123.
9
Blackburn Bobbin Co Ltd v TW Allen & Sons Ltd [1918] 1 KB 540.
Section 37(1) of the Sale of Goods Act and if the Defendant does not abide by the same, he
can be sued for damages by the Plaintiff under Section 56 of the aforementioned Act. Thus,
the Defendant is directed to pay the contract rate for the goods, transportation charges and
damages owing to the breach of contract in the first place.