What is the core rule from Jamaal v. Moola Dawood?

Damages in a sale of shares are fixed at the market price on the breach date. Later price moves are the seller’s own speculation.

Does the seller need to resell immediately to claim damages?

No. The measure is still the breach-date difference. A later resale does not cut down or increase that loss.

Is profit on later resale deducted from damages?

No. Later profit does not affect the loss that crystallised on the breach date.

What principle about mitigation does the case highlight?

Mitigation does not require the seller to gamble on price changes. The buyer’s liability is set at breach.

Which area of law does this case belong to?

Contract Law—damages for non-acceptance in sale of negotiable securities (shares).

Jamaal v. Moola Dawood (1916) ILR 43 Cal 493

Contract Law India Privy Council 1916 Citation: ILR 43 Cal 493 Bench: Lord Wrenbury Reading: ~6 min

Author: Gulzar Hashmi • Published: 26 Oct 2025 • Keywords: measure of damages, duty to mitigate, date of breach, share sale

Quick Summary

This case fixes damages in a share sale at the market price on the breach date. Later ups and downs belong to the seller’s own gamble, not to the buyer. So, the seller cannot claim extra loss if prices fall after breach, and the buyer cannot demand a cut if prices rise later.

Main Idea: damages crystallise at breach Duty to Mitigate Market Price Rule

Issues

In a contract to sell negotiable securities (shares), is the measure of damages the difference between contract price and market price on the breach date?

Rules

Damages for non-acceptance are assessed at the breach date market price.
If the seller holds the shares after breach, later price movements are the seller’s speculation, not the buyer’s.
No recovery for extra fall after breach; no liability for seller to share later rise with buyer.

“The seller’s loss at the date of the breach was and remained the difference between contract price and market price at that date.” — Lord Wrenbury

Facts (Timeline)

Apr–Aug 1911: Six contracts. Plaintiff sells 23,500 shares. Total contract price: ₹1,84,125.10.

30 Dec 1911: Delivery due. Market has fallen. Buyer fails to pay.

30 Dec 1911: Buyer seeks set-off and sends cheques of ₹75,925; asks for transfer.

2 Jan 1912: Seller rejects set-off; gives notice of resale and claim for loss.

28 Feb 1912: Seller begins resale of shares in the market.

22 Mar 1912: Suit filed for ₹1,09,218.12—difference between contract price and market price on 30 Dec 1911.

Arguments

Appellant (Seller)

Breach occurred on 30 Dec 1911. Loss must be fixed on that date.
Contract allowed resale on buyer’s default; any loss is recoverable.
Later price moves cannot reduce the crystallised loss.

Respondent (Buyer)

Set-off claimed from another transaction; tendered cheques for the difference.
Implied that resale timing and later prices should affect damages.

Judgment

The Court held that damages for breach of a sale contract are normally assessed as at the breach date. Profit on a later resale is not deducted, and extra fall after breach is not added.

Effect: Buyer’s liability is the contract price − market price on breach date. Nothing more, nothing less.

Ratio Decidendi

Loss crystallises on the breach date. Later gains or losses from holding the shares are irrelevant to the damages claim.

Why It Matters

Gives a clear, predictable yardstick for damages in share transactions.
Prevents parties from turning litigation into a market bet.
Clarifies the scope of mitigation in volatile markets.

Key Takeaways

Measure: Contract price − Market price on breach date.
Later rise? Buyer does not benefit.
Later fall? Seller cannot claim extra loss.
Mitigation: No duty to chase best resale price post-breach.
Certainty: Damages are fixed once breach happens.

Mnemonic + 3-Step Hook

Mnemonic — “B.R.E.A.C.H. FIX”: Breach day, Rule is price gap, Extra fall ignored, After rise ignored, Certainty first, Holding is seller’s risk — FIX damages at breach.

Spot the breach date. That’s your valuation day.
Find market price that day. Use reliable market data.
Compute difference. Ignore later price swings.

IRAC Outline

Issue: Is the proper measure of damages the difference between contract price and market price on the breach date?

Rule: Yes. Damages are assessed at the breach date; later price changes are the seller’s speculation.

Application: Buyer defaulted on 30 Dec 1911. Seller’s loss crystallised that day. Later resale and rising market did not reduce that loss.

Conclusion: Damages = Contract price − Market price on 30 Dec 1911.

Glossary

Breach Date: The day the buyer failed to perform. The yardstick day for damages.
Market Price: Prevailing price of the shares on the breach date.
Mitigation: Reasonable steps to limit loss; here it does not mean chasing later price moves.
Resale Option: Contract right to resell on default; does not change the breach-date measure.