Suit for the Price under Section 55 of the Sale of Goods Act, 1930: Where Property Has Passed, Price Payable on a Day Certain, and the Difference Between a Claim for the Price and Damages for Non-Acceptance

When the buyer does not pay, the seller's personal remedy takes one of two forms, and the difference between them matters a great deal. A suit for the price under Section 55 is a claim in debt for a fixed sum: the seller recovers the agreed price in full and hands over the goods. A suit for damages for non-acceptance under Section 56 is a claim for loss: the seller keeps the goods, must take reasonable steps to resell them, and recovers only the shortfall. Section 55 allows the first only in two situations, so in most other cases the seller is confined to damages.

1. The Section

Section 55, Sale of Goods Act, 1930

(1) Where under a contract of sale the property in the goods has passed to the buyer and the buyer wrongfully neglects or refuses to pay for the goods according to the terms of the contract, the seller may sue him for the price of the goods.

(2) Where under a contract of sale the price is payable on a day certain irrespective of delivery and the buyer wrongfully neglects or refuses to pay such price, the seller may sue him for the price although the property in the goods has not passed and the goods have not been appropriated to the contract.

2. Where Property Has Passed: Section 55(1)

The goods are the buyer's, so the price is a debt he owes, and the seller may claim it in full.
Delivery is not a precondition, though the seller must be ready to deliver, and if he holds the goods he does so under his lien.
The passing of property is therefore decisive, which is why the rules in Sections 18 to 25 matter in practice as much as in theory.
A resale by the seller changes the claim. As Ward v. Bignall shows, a resale rescinds the contract and the seller is left with damages.

📖 Colley v. Overseas Exporters, [1921] 3 KB 302

Facts: Goods were sold on free on board terms, so the seller was to put them on a ship nominated by the buyer. The buyer failed to nominate an effective ship, and the goods were never shipped. Property had not passed, and the price was not payable on any fixed date. The seller sued for the price.

Held: The action failed. The seller could not sue for the price, because property had not passed and the case did not fall within the second limb. His remedy was an action for damages for the buyer's breach in failing to nominate a ship.

Ratio: A seller cannot claim the price merely because the buyer's breach prevented property from passing. Unless property has passed or the price is payable on a day certain, the claim lies in damages.

Two questions decide whether the seller can sue for the price or only for damages

3. Price Payable on a Day Certain: Section 55(2)

The second limb allows a claim for the price even though property has not passed and the goods have not been appropriated, where the parties agreed that the price would be payable on a fixed date irrespective of delivery. The date must be certain and independent of delivery: a term that payment is due thirty days after delivery does not satisfy it, since the obligation depends on delivery.

📖 Workman, Clark & Co. Ltd. v. Lloyd Brazileno, [1908] 1 KB 968 (CA)

Facts: A shipbuilding contract provided for the price to be paid in instalments as stages of construction were reached. One instalment fell due and was not paid, although the vessel was not complete and property in it had not passed to the buyers.

Held: The builders could sue for the instalment as a debt. The contract made the sum payable on the happening of a stated event, independently of delivery, so the claim was for the price rather than for damages.

Ratio: Where the contract makes the price, or an instalment of it, payable on a fixed date or event irrespective of delivery, the seller may sue for it as a debt.

4. Price and Damages Compared

	Suit for the price, s. 55	Damages for non-acceptance, s. 56
Nature of the claim	A debt for a fixed sum	Compensation for loss
When available	Property has passed, or the price is payable on a day certain	Otherwise, where the buyer refuses to accept and pay
Mitigation	Not required	Required; the seller should resell at the market
Measure	The contract price, with interest under s. 61	Ordinarily the difference between the contract price and the market price
What happens to the goods	They go to the buyer, who must pay in full	They stay with the seller, who resells them

Section 55(3) of the English Act has no Indian counterpart; in India the claim for damages is dealt with separately in Section 56, and Section 61 allows interest on the price and special damages where they are recoverable by law.

5. The Position Stated Shortly

Section 55(1): where property has passed and the buyer wrongfully refuses to pay, the seller may sue for the price.
Section 55(2): where the price is payable on a day certain irrespective of delivery, he may sue for it even though property has not passed.
Colley v. Overseas Exporters: no claim for the price where property had not passed and no fixed date applied.
Workman Clark v. Lloyd Brazileno: an instalment payable on a stated event was recoverable as a debt.
Otherwise the seller's remedy is damages for non-acceptance under Section 56.
A claim for the price requires no mitigation; a claim for damages does.