Court caseAIR 1962 SC 366

The seller agreed to sell canvas to the buyer at a price "F.O.R. Kanpur", delivery to be made by handing over the railway receipt, the goods to be sent to Calcutta where the buyer intended to resell. The seller failed to deliver the railway receipt. The buyer sued for damages, claiming the difference between the contract price and the market price of canvas at Calcutta on the date of breach.

The Supreme Court (Wanchoo J) laid down two principles governing damages for breach: first, the injured party is, so far as money can do it, to be placed in the same position as if the contract had been performed; second, he must take all reasonable steps to mitigate the loss and cannot claim any part of the damage that is due to his neglect to do so. Applying illustration (a) to s. 73, the measure of damages for non-delivery is the difference between the contract price and the market price at the place and date of delivery. Kanpur was the place of delivery; the buyer had led no evidence of the Kanpur market rate and could not use the Calcutta price. The claim failed.