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Payzu v Saunders [1919] 2 KB 581

By the terms of the contract, the defendant was to deliver goods to the claimant on a monthly basis and the claimant was to pay for the goods within one month of delivery. The contract was to run for nine months. The claimant received the goods at a discounted price because he had committed to purchase from the supplier over the nine month period. The claimant was late in making the first instalment (This amounted to a breach of warranty not entitling the defendant to repudiate the contract). The defendant refused to continue with the original contract but told the claimant that he would deliver the goods in future if the claimant paid cash on delivery and would still let him have the goods at the discounted price. The claimant rejected this offer and purchased the good elsewhere at a higher price. He then sued the defendant claiming the difference between the contractually agreed price and what he actually paid for them.

Held:

The claimant was not entitled to damages. He was given the opportunity to purchase at the discounted price but rejected this. He was under a duty to take reasonable steps to mitigate his loss. The offer was a reasonable one and one which the claimant could easily have complied with.

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