Ali FJ:

[1] By a letter dated 28 April 1966 the appellant wrote to the respondent giving a quotation for the supply of one unit specially constructed tilting type lead melting furnace as per specification mentioned therein. The appellant offered to deliver it in about four weeks time after receiving from the respondent a confirmation of the order. Some four months later, the appellant again wrote on August 13, 1966 giving another quotation for slightly higher price and promising to make delivery in about 45 days after confirmation of the order. The specification of the furnace so far as it is relevant to the present dispute was expressed in these words:

"The refractory used in the melting hearth will be Alumina Silica which can withstand temperature up to 2600 degrees F. The gas burner used will be of gas-air premix type which can produce to 2,000,000 BTU per hour with the aid of a 2 HP blower."

[2] The order was confirmed by the respondent writing on August 29, 1966 as follows:

"To

Tham Engineerng Works,

3, Jalan Ampat,

Chan Sow Lin Road, KL

Please supply one high temperature tilting type metal melting gas fired FURNACE, generally as your quotation dated 13 August 1966 @ $16,000 (dollars sixteen thousand only) ex works and charge to a/c of Associated Metal Smelters Ltd, 9 Jalan Tengah, Kuala Lumpur.

Signature

Director."

[3] On September 2, 1966 the appellant wrote back to the respondent thanking them for the order which apparently was handed over by one Mr David Wong who did not give evidence at the trial. In this letter the appellant gave word of assurance as follows:

"We wish also to assure you that the high temperature melting furnace will have a temperature of not lower than 2600 degrees F and can be properly controlled by the Radiomatic Detector connected to the Temperature Controller."

[4] According to the appellant's letter of May 9, 1967, the furnace together with the extra equipment purchased at $2,000 was delivered to the respondent on January 16, 1967. By this time there was already an exchange of correspondence between the parties relating to the inability of the furnace to reach the temperature of 2600 degrees F. From one of the letters by the solicitors of the appellant company dated May 18, 1967 there was apparently some talk about returning the furnace to the appellant and this had probably led the appellant to write:

"Our client will not take back this furnace as it stands and denies any liability whatsoever to your clients in respect of the said furnace."

[5] In the meantime, the respondent ordered new furnaces from Australia which arrived in September 1967. In a letter dated September 22, 1967, the respondent's solicitors M/s Skrine & Co wrote to the appellant's solicitors M/s Shearn, Delamore & Co informing that they had acquired two new furnaces from Australia to replace the one supplied by the appellant. The letter also said this:

"Our clients have now acquired two new furnaces from Australia to replace the one supplied by your clients. Our clients have decided to keep the furnace supplied by your clients and sue the latter for damages suffered by our clients as a result of the furnace never reaching the temperature required for lead smelting for which it was purchased."

[6] In November 1967 the respondent brought the action in this appeal alleging a breach of an express condition of the contract and claiming the total sum of $29,301.38 as damages. Of the amount claimed, $28,000 was for loss of profits, calculated at $200 per day for 140 working days. The appellant denied liability and counterclaimed for the price of the furnace and cost of extra equipments which, after deducting payments already made, amounted to $15,600. The learned trial judge gave judgment for the plaintiff, awarding a total sum of $7,501.38 as damages for loss of profits and dismissed the appellant's counterclaim The appellant has appealed against the judgment but not against dismissal of the counterclaim.

[7] At the hearing, there was consid