M/S. MURLIDHAR CHIRANJILAL vs M/S. HARISHCHANDRA DWARKADAS AND ANOTHER

The Supreme Court held that under Section 73 of the Indian Contract Act, 1872, the measure of damages for breach of contract is determined by the foreseeability of loss at the time of contract formation. The court ruled that the seller's knowledge of the buyer's intended resale location does not automatically imply liability for lost profits unless explicitly stated in the contract. Since the respondent failed to prove the market price of the goods in Kanpur at the time of breach, they were not entitled to any damages, leading to the dismissal of the appeal.