Madras High Court in Madras Railway Company vs. Govind Ram, Mad. 176.
In this case a tailor had given his sewing machine to railways to be
delivered at a station as a consignment. He did not mention that any delay in delivering the
sewing machine would result in damages for the business of the tailor as he had planned to do
good business at the place proposed where a festival was to be held. The sewing machine
was delivered after the festival was over. Held Railways were not responsible for the damages
as the Railway authorities were not informed of the specific purpose of delivery of the sewing
machine namely business during a festival.
Compensation can be recovered even
without notice for damages or ‘deterioration’ caused to goods on account of delay by carriers
amounting to breach of contract. Here the word “deterioration” means not only physical
damages but also loss of opportunity. In Wilson vs. Lancashire and Yorkshire Railway
Company 50 LJCP 232, the plaintiff bought velvet with a view to making it into caps for sale
during spring. But due to delay in transit, he was unable to use the velvet for making caps for
sale during season.
It was held that the fall in value of sale of cloth in consequence of the same having arrived
after the season amounted to deterioration. It was here held that the plaintiff is entitled for
compensation without notice.
In the first case it was held that the party plaintiff is not entitled for damages as the purpose was not informed earlier.
However in the second case, it was held that even without notice, the plaintiff is entitled for compensation.
As we can see damages is also given for loss of opportunity.
In the tailors case, there was loss of opportunity.
Then why didn't the court grant damages?
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Contract Act
Replies (1)
damage is injury or harm; the condition or measure of something not being intact while,
deterioration is the process of making or growing worse. In the tailor case, the tailor can sell the sewing machine in normal as well as in a special occasion thus the damage will be the amount of excessive profit which he might earn on that occasion.
In the Wilson case, the good are meant for seasonal sale and not for offseason, thus losing the opportunity to sell in the favoured season will not only result in a complete loss due to "zero sale" in that particular season but also result in time loss during offseason and a uncertain risk of fall in price or demand in the next season sale.
if the plaintiff Govind Ram had alleged and proved that, owing to the loss of the special opportunity for sale of which he wished to take advantage, the cloth had fallen in value compared to what he could have got for it had he been able to dispose of it at Karamadai as he intended, the plaintiff would have been entitled to a finding that there was a "deterioration" within the meaning of section 72 of ICA 1872.
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