Case No: B2/2014/0792
Neutral Citation Number: [2016] EWCA Civ 18
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE PRESTON COUNTY COURT
DISTRICT JUDGE KNIFTON
CLAIM NUMBER 2YM73598
Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 20/01/2016
Before:

LORD JUSTICE RICHARDS
LADY JUSTICE MACUR
and
MR JUSTICE CRANSTON

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Between:

	Hughes	Appellant/
Claimant	
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	Pendragon Sabre Limited T/A Porsche Centre Bolton	Respondent/Defendant	

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Martin Budworth (instructed by Smith Jones (Solicitors) Limited) for the Appellant
Nigel Jones QC and Mr Edward Rowntree (instructed by Geldards Llp) for the Respondent

Hearing date: 01/12/2015

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Judgment
Mr Justice Cranston: 
Introduction
1.	This appeal raises a number of not unfamiliar problems in the sale of goods: had the parties entered an agreement to agree, rather than an agreement for sale, because the price and specification for the goods were to be agreed later; was there a collateral contract, overriding the terms of the standard-form sale contract the parties signed; and what was the measure of damages when the seller failed to deliver what were goods in such high demand that substitute goods were not available?  The context in which these issues arise is somewhat unusual, the manufacture of a limited number of high performance vehicles, where demand would never be satisfied; an assurance by a retailer that if allocated one by the manufacturer the customer would be first in the queue to obtain it since he was first to pay a deposit; and the decision of the retailer to sell the one vehicle the manufacturer allocated it to someone who paid the deposit later, on the basis that it was thought that the first customer would resell it for profit rather than keeping it, effectively, as a collector’s item.
Background
2.	The appellant, Mr Kevin Hughes, owns two car garages, one servicing, repairing and providing MOT testing for “day-to-day” vehicles, the other, a classic car workshop specialising in the servicing, repair and rebuilding of classic, high performance vehicles, especially Porsches.  The respondent, Pendragon Sabre Ltd (“Pendragon”), is a Porsche dealer in Bolton, part of a larger group of Porsche dealers.  Mr Sam Mansfield was a sales executive with Pendragon at the relevant time.  Over the years, Mr Hughes had dealt with Pendragon to order spare parts to enable him to service and repair his customers’ vehicles.
3.	In early 2011, Mr Hughes became aware that Porsche was to manufacture a limited edition of the 911 GT3 RS4 model, the last four litre 911 that Porsche was to produce.  It would be a vehicle very much in demand and Mr Hughes was later to describe it as his dream car.  Mr Hughes decided to contact Pendragon about the vehicle.  After a telephone conversation with Mr Mansfield on 15 March 2011, Mr Hughes sent an email later that day stating that he “would like to place an order for the new GT3 4 litre subject to price and availability”.  Mr Mansfield replied to the email the same day that, regarding Mr Hughes’s “intent to purchase” the vehicle, he would keep him up-to-date with the information that Pendragon received “and you will get the (sic) one of the first opportunities to order the earliest builds in the UK.”  In his evidence before the judge, Mr Mansfield accepted that there would be incredibly high competition from customers and a race amongst them to pay a deposit so as to secure a vehicle if Porsche allocated one to Pendragon.
4.	On 18 March 2011, a Friday, Mr Mansfield telephoned Mr Hughes and informed him that he had now received confirmation that he could take deposits on the Porsche 911 GT3 RS4 in the sum of £10,000.  At the hearing, Mr Hughes’s evidence was that Mr Mansfield informed him that he needed to visit the premises to pay the deposit that day to be first on the list, whereas if he waited until the Monday he would be further down.  Mr Mansfield’s evidence was that he informed Mr Hughes that if he wanted to increase his chances of obtaining any allocated 911 GT3 RS4 he needed to pay his “expression of interest deposit” as quickly as possible.  He accepted that, to be as fair as possible, allocation generally turned on who paid the deposit first and that that also determined which salesperson at the dealership would obtain the commission on the sale.  Late in the afternoon of 18 March 2011, Mr Hughes visited Pendragon’s premises.  He paid a deposit of £10,000 by way of presentation of a Visa debit card and he was given a receipt.  Mr Mansfield denied that there was any discussion of Mr Hughes purchasing the vehicle as an investment.
5.	During his visit to the premises, Mr Hughes also signed a document headed on the first page “Vehicle Order Form… Porsche Centre Bolton”.  The document stated that Mr Hughes (“the Purchaser”) “hereby agree[s] to purchase from the Porsche Centre detailed above (“the Seller”) subject to the Terms and Conditions hereof (including those attached) the under-mentioned vehicle, extras and accessories (hereinafter called “the goods”)”.  The box covering the description stated the model as a “911 GT3”, with 6 speed manual transmission, exterior colour black, and trim colour “black leatherette interior, seats leather/Alcantara”.  As to the price of the vehicle, the relevant box was populated with dummy amounts since, as Mr Mansfield explained in his evidence, the vehicle was so new that at that point it was not covered by the “drop down” menu on the computer system.  Written across the face of the box covering the description and price were the words “Subject to Price + Spec”.  A further box covered “consumer transactions” and provided that nothing was intended to affect a consumer’s statutory rights under the Sales of Goods Act 1979 or the Unfair Contract Terms Act 1977 or any amendment.  There then followed this statement:
“I, the Purchaser, agree to deposit the sum of £10,000 with the Seller forthwith and to pay any further deposit and the balance of the purchase monies in accordance with the terms and conditions overleaf.”
That was signed and dated, as indeed was each page of the terms and conditions which followed, by both Mr Hughes and Mr Mansfield.  Finally, at the very foot of the order form was this statement:
“This document contains the terms of a contract and includes the Terms and Conditions attached. Sign it only if you wish to be legally bound by them.”
6.	The terms and conditions covered two double columned pages.  Clause 1, “Acceptance”, provided that “this order” and any allowance in respect of a used motor vehicle was subject to acceptance by the seller.  Clause 2 was headed “Delivery” and read, in part,
“(b) the Seller shall not be obliged to fulfil orders in the sequence in which they are placed.”
As to “Specification Details”, clause 4 read:
“If the goods to be supplied by the Seller is (sic) new and if the specification details are not stated in this order then the following provisions shall apply:
(a) the Seller shall give written notice to the Purchaser when the specification is required by the Manufacturer for the purpose of building the goods and shall furnish particulars of the Specification options then available for the goods:
(b) the Purchaser shall within 14 days after receiving such notice inform the Seller in writing of the full and complete specification he selects failing which the Seller shall have the right to cancel the contract.”
Clause 5 covered deposits.  It provided that deposits should be paid to the seller as stakeholder and that:
“(d) within 14 days of receiving notification from the Seller that the goods are ready for delivery the Purchaser shall pay to the Seller the balance of the purchase price of the goods, being the difference between the Importer’s recommended retail price of the goods and any deposits paid by the Purchaser under sub-conditions (b) or (c) above and any accrued interest thereon.”
The governing law of the terms and conditions pursuant to clause 17 was English law and the purchaser irrevocably submitted to the jurisdiction of the English courts.  Clause 18 provided for variation or modification of the terms and conditions:
“No verbal arrangements can be recognised by the Seller and no variation or modification of these terms and conditions shall be in any way effective unless in writing and signed on behalf of the Seller by a director or authorised signatory thereof.”
7.	In his evidence, Mr Hughes maintained that he had never seen the document previously but accepted that the signatures on it were his.  His evidence was that, during the meeting, Mr Mansfield’s boss came down the stairs, shook his hand and assured him that Mr Mansfield was the best man to get him the vehicle.  Mr Mansfield’s evidence was that the document was a basic order form subject to further agreement once the specification and the price of the vehicle had been released and determined.  Both he and Mr Hughes were fully aware that by signing the document and paying the deposit it was simply an acknowledgment of an expression of interest.  Mr Hughes’s evidence was that he informed Mr Mansfield that a price of up to £130,000 would not be a problem.  In his evidence, Mr Mansfield accepted that Mr Hughes would still want the motor car even if the price was a little over £120,000.
8.	The same day that Mr Mansfield and Mr Hughes met at the dealership and signed the document, Mr Mansfield sent Mr Hughes a letter.  It read that the vehicle specification had not yet been confirmed, but that should he wish to proceed with the car as detailed on the attached sheets he should inform Mr Mansfield, who would submit the final details to the factory.  In evidence Mr Mansfield said this about specification:
“Q. … Then when you know you are getting an allocation, that is the time to go to the customer and say, “Right. What bits of spec are you interested in?”
A.	Yes.”
9.	On 23 March 2011, Mr Mansfield emailed Mr Hughes, after having spoken to his team leader, as follows:
“I can confirm that you have placed a £10,000 pounds deposit and placed an order for the next version of the GT3.
I can also confirm that you will get the first one from Porsche Centre Bolton if we get one, which I am very confident that we will. We have also taken another order after yours and should take several more yet, which puts us in a great position to get the cars.”
Mr Hughes replied with brief thanks.  Mr Mansfield’s evidence about the email was as follows:
“Q. If we look at the email that followed up a few days later… It is exactly as it says, it is confirmation that he will get the first one if [you] get it.
A.	Yeah.”
10.	Over the following months, Mr Hughes contacted Mr Mansfield on a number of occasions to inquire as to the progress of his order.  On 23 May 2011, Mr Mansfield emailed to the effect that Porsche had not allocated a vehicle to Pendragon at that stage but there might be another wave of allocations and he would pursue the matter with the Porsche representative the following day.  Mr Mansfield and Pendragon subsequently accepted that this was untrue: Pendragon had been allocated a 911 GT3 RS4 model, but it had been supplied to another customer.  The reason for not supplying it to Mr Hughes was that it was thought that he was not a genuine Porsche enthusiast, but that he would resell the vehicle to make a profit, which was in breach of Pendragon’s and Porsche’s policy.  Later inquiries from Mr Hughes drew a blank, with Pendragon informing Mr Hughes as late as July 2012 that despite attempting to obtain a model for him it had been unable to do so “due to Porsche allocation”.
11.	In October 2012, Mr Hughes’s solicitors issued a claim against Pendragon for specific performance, alternatively for damages for breach of an agreement to sell, subject only to a condition that a vehicle be allocated to the dealership.  Damages were said to be the difference between the list price, which Mr Hughes contracted to pay, and the current market value according to the expert evidence.  In its defence, Pendragon stated that the contract terms were uncertain until the price and specification were agreed.  Further, Mr Hughes could have purchased a 911 GT3 RS4 model elsewhere in the Porsche dealer network.
12.	Regarding price, Mr Hughes’s evidence was that, on the basis of extensive discussion among aficionados on the internet, he expected the price to be roughly £130,000, up to maybe £150,000, depending on the specification.  The only change from the basic specification which he would want was a different colour from the standard white, but he did not desire other features such as ceramic brakes, satellite navigation, Bluetooth, a tyre pressure monitor or a lighter battery.  Mr Hughes produced particulars of other similar vehicles with asking prices of some £170,000.  
13.	Mr Hughes’s case was supported by what was said to be an expert report dated 25 October 2013 from Mr Peter Reeves, who owned a number of motor vehicle retailers.  His evidence was that the list price of the vehicle was just under £128,000.  Only 22, possibly 29, vehicles appeared to have been sold in the UK.  At the time of his report he could not find any of the 911 GT3 RS4 models available for sale.  A dealer, who hoped to have one with a mileage of 600 miles, wanted £225,000 and said he had sold a similar vehicle for that amount.  Mr Reeves would expect dealers to pay £180,000 to obtain one, which they would expect to sell at £225,000, although £200,000 would still leave them an acceptable margin.
14.	The evidence on price from Mr Mansfield was that all of the vehicles supplied to the British market had additional specifications to the basic model.  The basic model price was approximately £129,000, but with additional specifications a vehicle would be sold for approximately £15,000 extra.  A subsequent reseller could market the vehicle at an asking price of between £165,000 and £170,000.  Mr Mansfield had seen on the internet that a number of vehicles were for sale in excess of that, but all of those vehicles had additional specification details.
15.	Pendragon obtained a report from Lee Cookson, dated 24 October 2013, who had had wide experience in the automotive sector.  His evidence, quoted by the judge, was that the base specification price of the vehicle was just over £128,000; it was common ground that when manufactured with extra specifications the price appeared to have been around £140,000.  All of the vehicles supplied to the UK market appeared to have extra specifications.  There were no vehicles currently being offered for sale via authorised Porsche dealers and no evidence available to suggest that any had been resold.
16.	In Pendragon’s disclosure there was an email from Pendragon’s group legal advisor to its solicitors, dated 11 October 2012, referring to a Porsche 911 GT3 RS4 (2011) model on sale for £174,850 at the Porsche Centre, Leicestershire.  It was painted black and had a mileage of just over 5000 miles.
The judgment
17.	The claim was heard in the Preston County Court on 22 November 2013 by District Judge Knifton (“the judge”), to whom the case had been released by the designated civil judge for Lancashire.  He heard evidence from Mr Hughes and Mr Mansfield and submissions from Mr Budworth for Mr Hughes and Mr Rowntree for Pendragon.
18.	Before the judge, Mr Budworth abandoned the claim for specific performance since the allocated vehicle had been sold elsewhere.  He advanced the case as one for breach of contract, which gave rise to a claim for damages.  His main contention was that Mr Hughes had entered a contract on 18 March 2011 that if a vehicle was allocated to Pendragon he was guaranteed it and that the email on 23 March 2011 was a record of that agreement already reached.  Pendragon breached the contract by failing to deliver the vehicle Porsche allocated to it sometime between May and September.  There would have been no need for Pendragon to lie if there had been no contract.  Alternatively, Mr Budworth submitted that Mr Hughes had an equitable interest in the Porsche which had been allocated to Pendragon.
19.	In response, Mr Rowntree submitted that there was no contract to sell a vehicle but an agreement to agree, since price, specification and delivery date had not been agreed.  If there was a contract, clause 2(b) of the terms and conditions excused Pendragon from fulfilling orders in the sequence in which they were placed.  The email of 23 March 2011 had no effect since it post-dated the contract.  Mr Rowntree submitted that there was no basis for an equitable interest in the Porsche.
20.	After canvassing the evidence and the parties’ submissions, the judge turned to his findings and conclusions.  He said this about Mr Budworth’s submission:
“29. … I find there was no contract. The Claimant signed an order form and placed a deposit on 18th March. I find that all he did was to express his wish to purchase a GT 3. There was no vehicle. There was no price. There was no delivery date. If there were a contract, the contract would have to be the document signed on 18th March. In any event, the dealership was simply not obliged to fulfil orders in the sequence in which they are placed and that is quite clear from clause 2 in the terms and conditions. Furthermore, the email subsequently sent by Mr Mansfield on 23rd March postdates the contract and is not a valid variation.
30. Whilst the conduct of the Defendant leaves a lot to be desired, and, on the Defendant’s own case, Mr Mansfield lied to the Claimant, there is no basis at all for making any finding there was a breach of contract. The whole manner in which such vehicles are provided is unusual. A customer simply places a deposit to show that they are expressing an interest in purchasing a vehicle. I am entirely satisfied that the payment of the deposit was no more than an “agreement to agree” and is unenforceable. I am supported in this finding by the decision in Dhanani v. Crasnianski [[2011] EWHC 926 (Comm)].  Again, I remind myself there were no details or agreement as to the specification of the vehicle, the price or the delivery date. There was no term in any contract that the Claimant would receive the first car if the Defendant received an allocation.”
21.	The judge then rejected the claimant’s submission that he had an equitable interest in the Porsche which had been allocated to Pendragon.  Turning to the loss which Mr Hughes alleged he suffered, the judge concluded:
“32. Finally, I cannot find that the Claimant could prove any loss. Damages for breach of contract are assessed at the date of accrual of the cause of action i.e. the breach. Although Mr Hughes states he would not have sold the car, he cannot point to any time at which he would have sold and at which damages might otherwise have been assessed. Furthermore as there was no indication of the level of specification or the price the Claimant would have been willing to pay, it is impossible in my judgment to ascertain any loss. Finally, in the absence of sale, the Claimant cannot as a matter of fact have suffered loss.
33. The expert evidence by the Claimant does not assist me. Quite simply, Mr Reeves has been unable to find any Porsche GT 3 for sale and the “hope” is vague and unparticularised.”
The appeal
22.	In advancing Mr Hughes’s appeal, Mr Budworth contended that the judge was wrong to find that there was no binding agreement.  The document signed on 18 March 2011 stated that it was contractual.  Pendragon must have thought this was an agreement with legal force because Mr Hughes was specifically asked to attend its premises that day and signed it.  The email of 23 March 2011 confirmed what was already agreed and it was not a variation of the agreement.  That the vehicle had not been manufactured overlooked, Mr Budworth submitted, section 5(2) of the Sale of Goods Act 1979 (an agreement for the sale of goods, the acquisition of which depends on a contingency).  The judge said that no price had been agreed but in his evidence Mr Mansfield accepted that the price was quite predictable.  An agreement for the sale of goods may be complete as soon as the parties have agreed to buy and sell where the remaining details can be determined by the standard of reasonableness or by law: Bear Stearns Bank plc v. Forum Global Equity Ltd [2007] EWHC 1576; the Sale of Goods Act 1979, section 8(2).  Future delivery, at some undefined date, was irrelevant.  The choice of ceramic brakes and so on were specification details which no purchaser would have to agree until the dealership knew that it had been allocated a vehicle.  There was a collateral agreement that if Pendragon were allocated a vehicle Mr Hughes would have it.
23.	As to damages for non-delivery of the vehicle, Mr Budworth’s case was that these were governed by section 51(2) of the Sale of Goods Act 1979.  Damages under that section do not have to be assessed by reference to the date of breach: see Johnson v. Agnew [1980] AC 367.  The mere difficulty of quantifying loss does not relieve the court of the task.  Reference could be made, submitted Mr Budworth, to the model on sale at £174,850 at the Leicestershire Porsche dealer in 2012 and to Mr Reeves’s evidence.
24.	For Pendragon, Mr Nigel Jones QC submitted that the judge was correct that there was no contract and that this was a finding of fact which we were not entitled to challenge.  The only material evidence about what happened that day when the document was signed was from Mr Mansfield, since Mr Hughes denied even seeing it.  Mr Mansfield’s unchallenged evidence, accepted by the judge, was that both he and Mr Hughes were aware that, in signing it, Mr Hughes was simply acknowledging his expression of interest and the terms to which he would subsequently be bound should Pendragon receive an allocation from Porsche.  Until Mr Hughes provided specification details for the car, he was entitled to the return of his deposit.
25.	As in Dhanani v. Crasnianski [[2011] EWHC 926, although on different facts, there was, in Mr Jones’s submission, simply an agreement to agree.  In his quest to establish a contract Mr Hughes could not surmount the hurdles that there was no vehicle, no price and no delivery date, and that the order form which he signed was for a different model altogether.  Mr Jones rejected Mr Budworth’s recently advanced notion of a collateral contract, along the lines of Shanklin Pier Ltd v. Detel Products [1957] 2KB 854.  In his submission, the 23 March 2011 email was equivocal in its language.  In any event it could not transform the document signed on 18 March 2011 into a contract.
26.	If there was a contract, Mr Jones’s case was that there had been no breach.  There was no term in any contract that Mr Hughes would receive the first car if the dealership received an allocation.  If there was such a term, Mr Jones submitted that the judge properly relied on clause 2 of the terms and conditions as providing that Pendragon was not obliged to fulfil orders in the sequence in which they were received.  As to the email of 23 March 2011, that was post-contractual and could not constitute a valid variation of any contract, being unsupported by consideration.  Mr Jones also invoked clause 18, that no verbal arrangements would be recognised by the seller.
27.	As to any loss for breach of contract, Mr Jones submitted that the correct question, addressed by the judge, was whether any loss could properly be proven.  Whilst absolute precision might not be required, it must be possible fairly to establish whether Mr Hughes suffered any loss and, if so, to quantify that loss.  Plainly, Mr Jones submitted, Mr Hughes did not contract to pay a specific price.  Further, there was no proper evidence of the specifications that Mr Hughes would have chosen and there was no basis upon which the judge could have made a finding about it.  Accordingly, there was no proper evidence as to the price that Mr Hughes would have paid.  As to the value of the vehicle at some relevant point in time, the value to which he was allegedly entitled but of which he was wrongly deprived, Mr Jones submitted that were it possible to derive such a figure Mr Hughes would have to give credit for the cost of keeping and maintaining the vehicle and for any aspects of his use impacting on its value.  The judge’s finding that damages can only be assessed at the date of breach is correct in so far as firstly, assessing damages at that date is the starting point (see County Personnel v. Pulver [1987] 1 WLR 916); and secondly, there was no submission on behalf of Mr Hughes as to the date at which loss should be assessed if it were not at the breach date.  The judge had been right to say that Mr Reeves’s evidence was vague and unparticularised.
Analysis
28.	For my part, I cannot accept the judge’s conclusion that there was no contract under which Pendragon agreed to sell a 911 GT3 RS4 to Mr Hughes, if it were to be allocated one of these models.  His conclusion is based in part on his reasoning that there was no vehicle, no price and no delivery date and that there was simply an agreement to agree.  Under the Sale of Goods Act 1979 there can be an agreement to sell what are called future goods, which include goods to be acquired by the seller after the making of the contract of sale and there can be a contract for the sale of goods the acquisition of which by the seller depends on a contingency which may or may not happen: ss. 5(1)-(2).  That there was no vehicle at the time of any agreement to sell, and that Pendragon might not be allocated one, were not fatal, therefore, to the existence of a contract.  Similarly, the Sale of Goods Act 1979 makes explicit that the price of goods need not be fixed by the contract but may be “left to be fixed in a manner agreed by the contract, or may be determined by the course of dealing between the parties”: s.8(1).  Further, the fact that there was no delivery date is irrelevant to the existence of a contract, since when under a contract of sale the seller is bound to send the goods to the buyer, and no time for this is fixed, they are to be delivered within a reasonable time: s.29(3).  In practice, a seller may restrict his delivery burden to the minimum by undertaking merely to hold the goods available for collection: see Goode on Commercial Law (E. McKendrick ed.), 4th ed., 2010, 294.
29.	The judge also reasoned that all Mr Hughes did was to express his wish to purchase a Porsche 911 GT3 RS4.  In my view this flies in the face of what happened.  As early as his email of 15 March 2011, Mr Hughes said he wanted to order a vehicle and, in his reply the same day, Mr Mansfield for Pendragon acknowledged Mr Hughes’s intention to purchase.  On 18 March 2011 it is as plain as a pikestaff that Mr Hughes entered some sort of contract with Pendragon.  To characterise it as simply an expression of interest, with no contractual force, belies what was contained in the standard form Pendragon proffered to Mr Hughes for signature.  The so-called order form, signed by Mr Hughes and Mr Mansfield on behalf of Pendragon, states that Mr Hughes agrees to purchase from Pendragon a Porsche 911 GT3 RS4, subject to the terms and conditions, and there is the express statement at the foot of the order form that the document contains the terms of a contract and includes the terms and conditions attached.  As to the terms and conditions, these have all the hallmarks of what one would expect with an agreement to sell a motor vehicle, including a proper law and a jurisdiction clause.
30.	By no stretch of the imagination was this simply an agreement to agree, even though it was “Subject to Price + Spec”.  As a matter of general principle, the courts are readier in modern times to find a contract “even though apparent certainty may be lacking as regards some term such as the price, provided that some means or standard by which that term can be fixed can be found”: Cudgen Rutile (No.2) Pty Ltd v. Chalk [1975] AC 520, 536F-G, per Lord Wilberforce.  That is the case here.  The specification details for the vehicle were to follow, but clause 4 of the terms and conditions expressly contemplate that these might not be stated in the order form and sets out the procedure for that eventuality.  With respect to price, clause 5(d) of the terms and conditions covers this, providing that once a vehicle is available for delivery a purchaser must pay the balance of the purchase price, being the difference between “the importer’s recommended retail price” and any deposits paid.  So the price is the importer’s recommended retail price, the list price as described in the evidence, but taking into account the cost of additional items, in other words, the specification details.  That was not specified at the time of the contract but, consistently with section 8 of the Sale of Goods Act 1979, it was a price which was to be fixed in a manner agreed in the contract.  Albeit that the order form was populated with dummy details, that was explained by Pendragon’s Mr Mansfield: there was no dropdown menu on the computer covering this model of Porsche.  In sum, this was an agreement for the sale of a Porsche 911 GT3 RS4, subject to the contingency of Porsche allocating one to Pendragon.
31.	The judge held that, if there were a contract, clause 2 precluded Mr Hughes from establishing any breach because it conferred on Pendragon the discretion to fulfil orders in a sequence other than that in which they were placed.  The judge rejected the notion that the email of 23 March 2011 had contractual effect varying clause 2, because it post-dated the contract and “is not a valid variation”.  However, he did not consider whether there was a collateral contract to this effect, entered on 18 March 2011, of which the email of 23 March 2011 was evidence.  Mr Jones refuted the idea, but this turned largely on his submission, which I have rejected, that the judge was right that payment of the deposit was simply to express an interest and that consequently there was no intention on either side to enter any sort of contract.
32.	In my view there was a collateral contract that if Porsche supplied a vehicle to Pendragon it would be allocated to Mr Hughes.  The email of 23 March 2011 is a clear expression that that was what had been agreed, which Mr Mansfield accepted in his evidence.  There is ample authority that the courts may treat a statement intended to have contractual effect as a contract collateral to the main transaction, in particular where one party enters the main contract because the statement is an assurance on a certain point.  Mr Hughes was ordering the 911 GT3 RS4 from Pendragon and paying the deposit on 18 March 2011 because of the assurance that he would be first in the queue if Porsche allocated one to the dealership.  Mr Mansfield’s statement to that effect was endorsed by his “boss” on 18 March 2011 as was his 23 March 2011 email.  In my view, the statement was intended to have contractual effect, the consideration for it being entry into the main contract, the written contract of 18 March 2011.
33.	That collateral contract was contrary to the terms of clause 2(b) of the terms and conditions, which confers a discretion on Pendragon not to fulfil orders in the order they are received.  But the effect of a collateral contract may be to vary the terms of the main contract and in my judgment that is what occurred here.  The decision in Wake v. Renault (UK) Ltd, The Times August 1, 1996; [1996] Trading LR 514, not cited by either party, is illustrative.  There a motor vehicle manufacturer attempted to terminate a dealership pursuant to a clause in the standard form dealer’s agreement, but the dealer in that case had been given an oral reassurance that termination was highly unlikely.  Robert Walker J (as he then was) held that this constituted a binding collateral contract which had the effect of varying the main contract.  It was sufficiently certain to be distinct from a mere statement of intention and consideration for it was provided by the dealer committing himself to refinancing arrangements on the strength of it.
34.	As to clause 18, I am not persuaded that the language, on its face, would catch a collateral contract.  It is well established that a collateral contract can override an exemption clause framed in general terms: e.g., Couchman v. Hill [1947] KB 554; Mendelssohn v. Normand Ltd [1970] 1 QB 177.  That to my mind is what happened here.
35.	If there was an agreement for the sale of a Porsche 911 GT3 RS4 to Mr Hughes, and if there was a collateral contract that Mr Hughes would be first in the queue if Porsche supplied one to Pendragon, the dealership was in breach of contract when it sold the one vehicle it was allocated to someone else.  Pendragon did not attempt to argue that it was entitled to do this because Mr Hughes fell into the category of someone who was in breach of any contractual condition about intending to resell the vehicle rather than keeping it as a collector’s item.  Thus the issue becomes one of the measure of damages to which Mr Hughes is entitled, the value of his lost chance of purchasing it.
36.	Here the Sale of Goods Act 1979 provides the starting point in section 51, “Damages for non-delivery”.  The prima facie rules in section 51(3) are that the measure of damages is to be ascertained by the difference between the contract price and the market or current price at the time the goods ought to have been delivered or, as in this case, if no time was fixed for delivery, at the time of the refusal to deliver.  But the breach date rules in section 51(3) apply only when there is an available market in the goods.  That does not require a market in the traditional sense of a commodity market, only that the goods are available and freely sold, with the price being settled by the laws of supply and demand: Charter v. Sullivan [1957] 2 QB 117, 128.  Here, as Professor Bridge expresses it, the nature of the contract goods is specialised to the point of insufficient activity to evidence a market: M. G. Bridge, The Sale of Goods, 3rd ed., 2014, 679.  Porsche manufactured a limited number of the Porsche 911 GT3 RS4 model – it seems that at most about 30 were supplied to the UK – and when they prepared their reports in October 2013 neither Mr Reeves nor Mr Cookson could find one for sale.
37.	In the absence of an available market, section 51 (2) of the Sale of Goods Act 1979 throws the disappointed buyer back on the rule in the first limb of Hadley v. Baxendale (1854) 9 Ex 341, that the measure of damages is the loss directly and naturally resulting, in the ordinary course of events, from the seller’s breach of contract.  This will be based on the value of the contract goods at the time and place of the breach and that can be assessed by any relevant evidence: Benjamin’s Sale of Goods, 9th ed., 2014, 1083; Chitty on Contracts (Special Contracts), 32nd ed., 2015, 2126-7.  It does not require any resale, as the judge seemed to think, but can turn on other evidence such as the cost of the nearest equivalent vehicle.  As ever, a buyer must act reasonably so as to mitigate his loss.
38.	In this case it is not, in my view, sensible to remit the case to the county court for the assessment of damages, given the delay so far and the costs associated with doing so.  So it is necessary for us to determine the contract price and what Mr Hughes would have had to pay to obtain the nearest equivalent vehicle, the difference being the value of Mr Hughes’s lost chance.
39.	As I have explained, the contract price for the basic model was the list price.  Both sides accepted that that was around £128,000-£129,000.  There was then the cost of extras and it was common ground, said Mr Cookson, that the price of a Porsche 911 GT3 RS4 with extras was around £140,000.  Mr Hughes’s evidence was that he was only interested in a different colour, black, to the standard white.  It seems to me that we can assume that the price Mr Hughes would have paid would have been some £135,000.  Macur LJ pointed out in argument that Pendragon provided no assistance to the court as regards the price to the customer who trumped Mr Hughes.  As Lord Diplock noted in Herrington v. British Railways Board [1972] AC 877, 930, parties can withhold evidence under our adversarial system but cannot complain if the court draws from the facts which have been disclosed reasonable inferences as to what the facts are when a party chooses to do so.
40.	The evidence about the cost of the nearest equivalent vehicle is deficient.  The market in the Porsche 911 GT3 RS4 has been illiquid after its launch in 2011.  One thing however is certain, the value of this model has appreciated and the resale value of the vehicles is in excess of the price as new.  Mr Hughes himself produced particulars of other similar vehicles with asking prices of some £170,000; Mr Reeves referred to expecting dealers to pay £180,000 to obtain one; Mr Mansfield gave a figure of £165,000 - £170,000 were a purchaser to resell; and there was the reference in the disclosure by Pendragon to a black Porsche 911 GT3 RS4, with limited mileage, on sale at the Porsche Centre Leicestershire for £174,850.  It seems to me that given that Mr Hughes himself produced evidence of similar vehicles being available at £170,000, and that the other evidence is not significantly inconsistent with that figure, that this is the appropriate figure to adopt.  Consequently, I would award damages to Mr Hughes of £35,000, the difference between what would have been the contract price of £135,000 and the cost of the nearest equivalent vehicle of £170,000.
41.	At one point, Mr Budworth submitted that damages should be assessed under the second limb of Hadley v. Baxendale, as damages contemplated by the parties, greater than those following in the usual course of events.  That was because, he contended, Mr Hughes was purchasing the vehicle as an investment.  There is no finding by the judge that that was Mr Hughes’s intention or that, if it were, Pendragon was privy to it.  Mr Mansfield denied the suggestion in his evidence.  I reject the submission that the second limb of Hadley v. Baxendale is relevant in this case.
42.	Finally, I note Mr Budworth’s case that somehow Mr Hughes acquired an equitable interest in the vehicle that was allocated to the dealership.  A seminal case in sales law is Re Wait [1927] 1 Ch 606 where, led by Atkin LJ, the Court of Appeal said, in short, that equitable principles are inapplicable to the sale of future goods and that with an agreement to sell a buyer could not acquire an equitable interest in the goods.  The judge was therefore correct to reject that submission.  Mr Hughes succeeds in this appeal on the contract point, not through the application of any equitable doctrine.
Conclusion
43.	For the reasons I have given I would allow this appeal and award Mr Hughes damages of £35,000.
Macur LJ:
44.	I agree.
Richards LJ:
45.	I agree.