Documente Academic
Documente Profesional
Documente Cultură
by
Breach
(J00
Q4b)
- Contracts may be terminated as a result of failure of the promisor to fulll his obligation under the contract. - A contract must be performed in accordance with its terms. - The promisor must perform or tender performance of his promise. - Where he has failed to do so, the promisee may be entitled to be discharged from future obligations under the contract. Breaches may occur
At the time when performance is due - Section 56 CA50 - the contract only becomes voidable at the option of the promisee if time was of the essence of the contract. If time was not of essence, the promisee would only be entitled to compensation.
During performance of the contract - The promisee may be performing the promise but not in accordance with the terms of the contract. - In such situations the innocent party is only entitled to treat the contract as discharged if the breach is of a vital term (i.e. condition). - If the breach is trivial, he is only entitled to damages. Choo Yin Loo v Visuvalingam Pillay
Before the time for performance - The promisor may indicate to the promisee that he does not intend to fulll his obligations under the contract. - This is called anticipatory breach. - It entitles the innocent party to treat the contract as discharged Section 40 CA50
Remedies
Section 21 SRA50 - The court has a discretion to refuse SP - The discretion of the court is not arbitrary but based on sound and reasonable principles, guided by judicial principles which are capable of correction by a court of appeal.
Damages
(D04
Q5b)
Specic
Performance
(J07
Q5)
- An order for damages refers to an order of the court requiring the party in breach to pay the other party monetary compensation for the loss or other inconvenience suered as a result of the breach. - The measure of damages recoverable is stipulated in Section 74 CA50. This is similar to the measure of damages payable under common law. Hadley v Baxendale Section 74 CA50 - (1)When a contract has been broken, the party who suers by the breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, (i) which naturally arose in the usual course of things from the breach; or (ii)which the parties knew, wen they made the contract to be likely to result from the breach of it. (2)Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach. Bee Chuan Rubber Factory Sdn Bhd v Loo Sam Mooi Tham Cheow Toh v Associated Metal Smelters Ltd Mitigation of Loss - The law imposes a duty upon the person claiming damages to take all reasonable steps to reduce or minimize or mitigate their loss. - If they fail to take these steps, the amount of damages they can expect to recover will be reduced. - If the plainti is able to avoid a loss, damages will not be recoverable for the potential loss that the plainti may have suered. - The party seeking damages is under a duty to mitigate the loss. Kebatasan Timber Extraction Co. v Chong Fah Sing
- Specic
performance
is
an
order
of
the
court
requiring
the
party
who
is
in
breach
of
the
contract
to
perform
his
part
of
the
bargain. - It
is
an
equitable
remedy.
In
Malaysia,
the
remedy
of
specic
performance
is
provide
for
under
Specic
Relief
Act
1950. Section
11(1)
SRA50
-
SP
of
any
contract
may
be
granted
at
the
discretion
of
the
court
in
the
following
circumstances: 1. When
the
act
agreed
to
be
done
is
in
the
performance
wholly
or
in
part
of
a
trust.
- Example A
holds
certain
stock
in
trust
for
B.
A
wrongfully
disposes
of
the
stock.
B
may
sue
for
SP.
2.Where
there
exists
no
standard
for
ascertaining
the
actual
damage
caused
by
the
non-performance
of
the
act
agreed
to
be
done.
- Example A
agrees
to
buy
and
B
agrees
to
sell,
a
picture
by
a
dead
painter
and
two
rare
China
vases.
A
may
obtain
SP
as
there
is
no
standard
for
ascertaining
the
actual
damage
which
would
be
caused
by
its
non-performance.
3.When
the
act
agreed
to
be
done
is
such
that
pecuniary
compensation
for
its
non-performance
would
not
aord
adequate
relief.
- Example where
A
transfers
without
endorsement
but
for
valuable
consideration
a
promissory
note
to
B.
A
becomes
insolvent
and
C
is
appointed
his
assignee.
B
may
compel
C
to
endorse
the
note,
for
C
has
succeeded
to
As
liabilities
and
a
decree
for
pecuniary
compensation
for
not
endorsing
the
note
would
be
fruitless.
Section
20
SRA50
SP
cannot
be
specically
enforced
in
the
following
contracts: 1. A
contract
for
the
non-performance
of
which
compensation
in
money
is
an
adequate
relief; 2. A
contract
which
runs
into
such
minute
or
numerous
details
or
which
is
so
dependent
on
the
personal
qualications
or
volition
of
the
parties
or
otherwise
from
its
nature
is
such
that
the
court
cannot
enforce
SP
of
its
material
terms; 3. A
contract
whose
terms
the
court
cannot
nd
with
reasonable
certainty; 4. A
contract
which
is
in
its
nature
revocable; 5. A
contract
made
by
trustees
either
in
excess
of
their
powers
or
in
breach
of
their
trust; 6. A
contract
made
by
or
on
behalf
of
a
corporation
or
public
company
created
for
special
purposes
or
by
the
promoters
of
the
company
which
is
in
excess
of
its
powers; 7. A
contract
which
involves
the
performance
of
a
continuous
duty
extending
over
a
longer
period
than
3
years
from
its
date; 8. A
contract
of
which
a
material
part
of
the
subject-matter
supposed
by
both
parties
to
exist,
has
before
it
has
been
made,
ceased
to
exist.
- Refers to the compensation which is intended to put the aggrieved party in the position that he would have been if the breach had not occurred.
Substantial Damages
- Refers to a token award granted by the court where the plainti has proved the defendants breach but has suered no actual loss.
Nominal Damages
- Refers to an award of damages which is intended to penalize a defendant for his breach. - The plainti in this case will be awarded more than his actual nancial loss. - It is only awarded in special circumstances - breach of promise of marriage 6 - 2 Teh Joo Ling All rights reserved
Exemplary Damages
Remedies
Quantum
Meruit
(J00
Q3v)
Rescission
(J00
Q3i)
Injunction
(D04
Q5a)
- literally as much as he deserves - Only arises in cases of part- performance. - This is a remedy by which a plainti may be able to obtain a reasonable sum for the work already performed by him, in situations where the contract does not provide for the amount or where the contract has been discharged by the conduct of the defendant. Craven Ellis v Canons Ltd
- Rescission is an equitable remedy, that entitles one party to a contract to put an end to ti due to the breach or default of the other party. - Section 40 CA50 - when a party to a contract has refused to perform or disabled himself from performing his promise, the promisee may choose to put an end to the contract. Section 65 CA50 - when a person at whose option a contract is voidable rescinds it, the other party need not perform any promise made by him under the contract. - The party rescinding the contract must restore to the other party any benet received from him. - The party rightfully rescinding the contract is entitled to compensation for any damages sustained by him as a result of the breach of the contract by the other party. Hsu Seng v Choi Soi Fua
- An injunction is essentially an order of the court which prevents or stops the defendant from doing or continuing to do something in breach of the terms of the contract between him and the plainti. - An injunction is a discretionary remedy and not one which is obtainable as of right. Two Types 1. Temporary Injunctions - Section 51 SRA50 - to continue until a specied time or until the further order of the court. - a.k.a interlocutory/interim injunction. - Usually granted by the court pending the outcome of a full hearing by the court. - An application for interlocutory injunction would normally be granted so long as the plainti has shown that there is a serious question to be tried. - Purpose: to preserve the status quo of the parties until the nal outcome of the court case. Mohamed Zainudin bin Puteh v Yap Chee Seng 2.Perpetual Injunctions - Granted by the court at the end of the hearing and upon the merits of the suit. - The defendant is thereby perpetually enjoined from the assertion of a right, or from the commission of an act, which would be contrary to the rights of the plainti. Neoh Siew Eng & ANor v Too Chee Kwong An injunction will not be granted to prevent the breach of a contract if the contract is one that cannot be specically enforced - Section 54(f) SRA50.