Site navigation

A seller keeps a sale contract alive after the buyer repudiates it. The buyer then fails to accept the…

Affirmation leaves the contract alive under section 39 of the Indian Contract Act, 1872. The failure to accept the goods on the agreed date is the breach here. Ordinary…

Choose your answer

A seller keeps a sale contract alive after the buyer repudiates it. The buyer then fails to accept the goods on the agreed delivery date. Assume an available market and the ordinary market-price measure of damages. Which statements are true?

I. Damages are ordinarily measured using the market price at the date of anticipatory repudiation.

II. Damages are ordinarily measured using the market price at the agreed delivery date.

III. Keeping the contract alive exposes the seller to the risk that the market moves adversely before delivery is due.

IV. Once the buyer breaches on the agreed date, the seller can recover loss that reasonable mitigation would have avoided.

Select one answer
Answer and explanation

Correct answer C

Affirmation leaves the contract alive under section 39 of the Indian Contract Act, 1872. The failure to accept the goods on the agreed date is the breach here.

Ordinary market damages compare the contract price with the market at the due date, exposing the affirming party to intervening market changes.

Reasonable means of reducing the loss are taken into account under the explanation to section 73.

Option feedback

Option A

The answer needs to include statement II. The answer needs to exclude statement I.

Option B

The answer needs to include statement II. The answer needs to exclude statement I and statement IV.

Option C

The selected statements give the complete combination supported by the rule.

Option D

The answer needs to exclude statement IV.

Practice for these exams

Related question papers

Related exam syllabi

Related questions in this topic