WHERE A SELLER REFUSES TO MAKE DELIVERIES, BUYER CAN PROTECT HIMSELF.
Question—A places a contract with B for future delivery of lumber beginning in October; B, for certain reasons, does not care to deliver this contract. A has the opportunity to buy the identical goods for the same delivery from competitors at the same price, after being notified by B that he does not care to deliver this contract. Does the fact that A has the opportunity to cover himself on the same conditions release B of damages arising from non-delivery of the contract, or can A wait until the time of delivery before buying goods in the open market against the contract of B which the latter refuses to deliver?
Reply: If B is under contract to deliver goods to A in October, and if, before October, he notifies A that he does not intend to fulfill his contract obligation, A may accept that statement as final and protect himself at once. He may make other arrangements for an October delivery and compel B to pay the loss, if any, or he may sue at once for breach of contract. The buyer is not bound to pursue this course, however. He may act upon the supposition that, upon further consideration of the matter, the seller will conclude to do his duty after all; and so the buyer, A in this case, may wait till the time arrives for the October delivery, and may then buy goods to replace those that the seller ought to have delivered, holding the seller liable for the loss, if any, or he may then sue for breach of the contract. If this costs the seller more than the other plan might have cost him, the fault is his own. He will not be heard to complain because the buyer has taken it for granted that he really would perform his contract obligation when the time arrived, in spite of his previous statement that he did not intend to do so.
Opinion No. 49.