The decision of the Court of Appeal in Procter & Gamble Philippine Manufacturing Corp. v. Kurt A. Becher 1 provides authority on a previously unresolved point in relation to the damages recoverable by a c.i.f. buyer for the seller’s breach in tendering a bill of lading which is not “genuine” because it contains a false date of shipment.

It is well settled that a c.i.f. buyer is entitled to reject a bill of lading which is not “genuine”2 (for the reason just stated); and that he is also entitled to reject goods which have been shipped outside the shipment period, since the statement that they will be or have been shipped within that period forms part of the description of the goods.3 The buyer will normally exercise one or the other of these rights to reject where the market has fallen between the time of contracting and the time of his discovery of the breach. In this way, he will be able to avoid the loss which has resulted from the fall in the market, and to throw that loss back on the seller. The buyer will be able to do this even though the breach has caused him no loss at all: that is, even though there has been no further fall in the market between the time when the goods ought to have been shipped and the time when they actually were shipped. But the buyer may lose the right to reject for various reasons: in particular, he may lose it by acceptance without becoming aware of the breach.4 His only remedy will then be in damages as for breach of warranty.5 The problem is, then, whether in such an action he can recover what in the ensuing discussion we shall call “market loss damages”: this expression will be used to refer to the loss resulting from a fall in the market which (as explained above) the buyer could have avoided if he had known of the breach in time and had exercised his right to reject. Previous authorities have dealt with two situations.