Sale-of-goods exclusion clauses: don’t miss out on a bargain

By Fleur Turrington

It is crucial to cover the full range of potential losses in exclusion clauses. We consider exclusion clauses in sale-of-goods contracts in light of the recent Commercial Court decision of Glencore Energy Ltd v Cirrus Oil Services.

Where a buyer refuses to accept goods under a contract, the seller has the right to claim damages. According to the Sale of Goods Act 1979, if there is an available market at the relevant time for the goods in question, the measure of damages will usually be treated as the difference between the price under the contract and the market price at the time of the non-acceptance.

In other words, if the contract price was the same as the general market price, then the seller will not be viewed as suffering any loss — he could simply sell the goods to another buyer at the same price and would not be out of pocket. However, if the contract price was higher than the market price, then the seller has missed out on the opportunity of selling the goods at the higher price, and will be entitled to be compensated for this ‘loss of a bargain’…

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