In Westbrook Resources Ltd v Globe Metallurgical Inc – Lawtel 23.10.07 the Claimant metals trader claimed damages from the Defendant metal manufacturer and supplier for non-performance of an FOB contract to supply manganese ore to be screened at ‘over plus one half inch’. The Defendant counterclaimed damages for the Claimant's alleged repudiatory breach of the contract. When it transpired that the cargo would be less than half an inch in size, the Claimant had put two options to the Defendant (1) to pay the invoice for the first barge, in which event the material would be delivered, and (2) to confirm that the Defendant would not pay, in which case the Claimant would mitigate its losses.
The Defendant chose the second and claimed that the Claimant was in breach of contract.
The judge held that it was the Defendants who had repudiated the contract by not accepting material tendered which was less than half an inch in size. The loss directly and naturally resulting from the Defendants’ breach of contract was the difference between the price payable by Defendant and that payable by the buyers to whom the goods were instead sold. The Claimant’s decisions that were subsequent to the breach of contract and the manner of their ultimate disposal of the goods were not matters which resulted directly and naturally from the Defendant’s breach of contract