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Under the Indian Contract Act, 1872, 'A' contracts to sell and deliver 500 bales of cotton to 'B' on a…

Under the illustration to section 73 of the Contract Act, since A had no knowledge of the special circumstances of B's business, he is not liable for the indirect loss of…

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Under the Indian Contract Act, 1872, 'A' contracts to sell and deliver 500 bales of cotton to 'B' on a fixed day. 'A' knows nothing of B's mode of conducting his business. 'A' breaks his promise and 'B', having no cotton is obliged to close his mill. Is 'A' responsible for the loss caused to 'B' by the closing of Mill?

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Correct answer B

Under the illustration to section 73 of the Contract Act, since A had no knowledge of the special circumstances of B's business, he is not liable for the indirect loss of the mill's closure resulting from his breach, only for damages naturally arising from such a breach in the ordinary course of things.

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