Excluding liability for loss of profit and loss of bargain
Section 50(1) of the Sale of Goods Act 1979 provides that where a buyer wrongfully neglects or refuses to accept and pay for goods, the seller may bring an action for damages for non-acceptance. How such damages are to be calculated is set out in section 50(2) of the 1979 act, which states that ‘the measure of damages is the estimated loss directly and naturally resulting, in the ordinary course of events, from the buyer’s breach of contract’. Section 50(3) elaborates further, providing that where there is an available market for the goods in question, the measure of damages is prima facie to be ascertained by the difference between the contract price and the market price at the time when the goods ought to have been accepted.
In Glencore Energy UK Ltd v Cirrus Oil Services Ltd, Glencore agreed to supply crude oil to Cirrus. In turn, Glencore entered into a contract to purchase the oil from its supplier, Socar Trading SA. Cirrus refused to accept the oil on the basis that it was blended. Glencore in turn terminated its contract with Socar and brought an action for damages against Cirrus under section 50…
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