Lecture 6

Contract Law – Performance, Discharge and Remedies

Discharge
A contract is discharged when it is brought to an end/dissolved/terminated.
There are a number of ways it can be discharged –

1. Discharge by Performance
Once a contract has been performed and payment received for it and there is nothing
left to do, the contract is discharged and so are the parties. They will have no liability to
each other. Ex: goods delivered and payment received.

Contracts which must be performed

S 38 Contracts Act 1950
(1) The parties to a contract must either perform, or offer to perform, their respective
promises, unless the performance is dispensed with or excused under this Act, or of any
other law.
(2) Promises bind the representatives of the promisors in case of the death of the
promisors before performance, unless a contrary intention appears from the contract.
ILLUSTRATIONS
(a) A promises to deliver goods to B on a certain day on payment of RM1,000. A dies
before that day. A’s representatives are bound to deliver the goods to B, and B is bound
to pay the RM1000 to A’s representatives.
(b) A promises to paint a picture for B by a certain day, at a certain price. A dies before
the day. The contract cannot be enforced either by A’s representatives or by B.

S 39 Contracts Act 1950

(1) Where a promisor has made an offer of performance to the promisee, and the offer
has not been accepted, the promisor is not responsible for non-performance, nor does
he thereby lose his rights under the contract.
(2) Every such offer must fulfil the following conditions:
(a) it must be unconditional;
(b) it must be made at a proper time and place, and under such circumstances that the
person to whom it is made may have a reasonable opportunity of ascertaining that the
person by whom it is made is able and willing there and then to do the
whole of what he is bound by his promise to do; and
(c) if the offer is an offer to deliver anything to the promisee, the promisee must have a
reasonable opportunity of seeing that the thing offered is the thing which the promisor
is bound by his promise to deliver.
(3) An offer to one of several joint promisees has the same legal consequences as an
offer to all of them.
ILLUSTRATION
A contracts to deliver to B at his warehouse, on the 1st of March, 100 bales of cotton of
a particular quality. In order to make an offer of a performance with the effect stated in
this section, A must bring the cotton to B’s warehouse, on the appointed day, under such
circumstances that B may have a reasonable opportunity of satisfying himself that the
thing offered is cotton of the quality contracted for, and that there are 100 bales.

Who must perform the contract

S 41 Contracts Act 1950 - If it appears from the nature of the case that it was the
intention of the parties to any contract that any promise contained in it should be
performed by the promisor himself, such promise must be performed by the promisor. In
other cases, the promisor or his representatives may employ a competent person to
perform it.
ILLUSTRATIONS
(a) A promises to pay B a sum of money. A may perform this promise, either by
personally paying the money to B, or by causing it to be paid to B by another; and, if A
dies before the time appointed for payment, his representatives must perform the
promise, or employ some proper person to do so.
(b) A promises to paint a picture for B. A must perform this promise personally.

Time and place for performance

S 52 Contracts Act 1950 When a contract consists of reciprocal promises to be
simultaneously performed, no promisor need perform his promise unless the promisee
is ready and willing to perform his reciprocal promise.
ILLUSTRATIONS
(a) A and B contract that A shall deliver goods to B to be paid for by B on delivery. A need
not deliver the goods unless B is ready and willing to pay for the goods on delivery.
B need not pay for the goods unless A is ready and willing to deliver them on payment.
(b) A and B contract that A shall deliver goods to B at a price to be paid by instalments,
the first instalment to be paid on delivery. A need not deliver unless B is ready and
willing to pay the first instalment on delivery. B need not pay the first instalment unless
A is ready and willing to deliver the goods on payment of the first instalment.

Order of performance of reciprocal promises

S 53 Contracts Act 1950 Where the order in which reciprocal promises are to be
performed is expressly fixed by the contract, they shall be performed in that order; and,
where the order is not expressly fixed by the contract, they shall be performed in that
order which the nature of the transaction requires.

ILLUSTRATIONS
(a) A and B contract that A shall build a house for B at a fixed price. A’s promise to build
the house must be performed before B’s promise to pay for it.
(b) A and B contract that A shall make over his stock-in-trade to B at a fixed price, and B
promises to give security for the payment of the money. A’s promise need not be
performed until the security is given, for the nature of the transaction requires that A
should have security before he delivers up his stock.

S 54 Contracts Act 1950 When a contract contains reciprocal promises, and one party to
the contract prevents the other from performing his promise, the contract becomes
voidable at the option of the party so prevented; and he is entitled to compensation
from the other party for any loss which he may sustain in consequence of the non-
performance of the contract.
ILLUSTRATION
A and B contract that B shall execute certain work for A for RM1,000. B is ready and
willing to execute the work accordingly, but A prevents him from doing so. The contract
is voidable at the option of B; and, if he elects to rescind it, he is entitled to recover from
A compensation for any loss which he has incurred by its non-performance.

S 55 Contracts Act 1950 When a contract consists of reciprocal promises, such that one
of them cannot be performed, or that its performance cannot be claimed till the other
has been performed, and the promisor of the promise last mentioned fails to perform it,
the promisor cannot claim the performance of the reciprocal promise, and must make
compensation to the other party to the contract for any loss which the other party may
sustain by the non-performance of the contract.
ILLUSTRATIONS
(a) A hires B’s ship to take in and convey, from Kelang to Singapore, acargo to be
provided by A, B receiving a certain freight for its conveyance. A does not provide any
cargo for the ship. A cannot claim the performance of B’s promise, and must make
compensation to B for the loss which B sustains by the non-performance of the contract.
(b) A contracts with B to execute certain builders’ work for a fixed price, B supplying the
scaffolding and timber necessary for the work. B refuses to furnish any scaffolding or
timber, and the work cannot be executed. A need not execute the work, and B is bound
to make compensation to A for any loss caused to him by the non-performance of the
contract.
(c) A contracts with B to deliver to him, at a specified price, certain merchandise on
board a ship which cannot arrive for a month, and B engages to pay for the merchandise
within a week from the date of the contract. B does not pay within the week. A’s
promise to deliver need not be performed, and B must make compensation.
(d) A promises B to sell him one hundred bales of merchandise, to be delivered next day,
and B promises A to pay for them within a month. A doesnot deliver according to his
promise. B’s promise to pay need not be performed, and A must make compensation.

Appropriation of payments
S 60 Contracts Act 1950 Where a debtor, owing several distinct debts to one person,
makes a payment to him, either with express intimation, or under circumstances
implying that the payment is to be applied to the discharge of some particular debt, the
payment, if accepted, must be applied accordingly.
ILLUSTRATIONS
(a) A owes B, among other debts, RM1,000 upon a promissory note, which falls due on
the 1st of June. He owes B no other debt of that amount. On the1st of June A pays to B
RM1,000. The payment is to be applied to the discharge of the promissory note.
(b) A owes to B, among other debts, the sum of RM567. B writes to A and demands the
payment of this sum. A sends to B RM567. This payment is to be applied to the discharge
of the debt of which B had demanded payment.

S 61 Contracts Act 1950

Where the debtor has omitted to intimate, and there are no other circumstances
indicating to which debt the payment is to be applied, the creditor may apply it at his
discretion to any lawful debt actually due and payable to him from the debtor, whether
its recovery is or is not barred by the law in force for the time being as to the limitation
of suits.

S 62 Contracts Act 1950

Where neither party makes any appropriation the payment shall be applied in discharge
of the debts in order of time, whether they are or are not barred by the law relating to
the limitation of suits. If the debts are of equal standing, the payment shall be applied in
discharge of each proportionably.

Strict/Exact performance
Performance must be exact to what was agreed..

Cutter v Powell [1795] 6 TR 320

Defendant engaged plaintiff, a seaman, to work on a ship on a voyage from Jamaica to
England. The plaintiff would be paid upon arriving in England. The voyage took 2
months but after 6 weeks into the voyage, the plaintiff died. His estate sued the
defendant on a quantum meruit.
Court – as the contract is entire and as the defendant’s promise depends on a
condition precedent to be performed by the other party, the condition must be
performed before the other party is entitled to receive anything under it. The estate
was not entitled to any payment.

Exceptions –
i Divisible/severable contracts
It is one where the parties have divided the contract price into a number of
instalments, each corresponding to a definite proportion of the other’s performance.
Payment is apportioned according to work done. If the contract is divisible, the court
will consider the obligations relating to the divisible part of the contract which will
entitle the party performing the divisible to recover after each part of the contract is
performed notwithstanding the whole contract has not been performed. Whether a
contract is divisible or not depends on the parties’ intention at the time of contract.
A K Translogic Sdn Bhd Kausar Corporation Sdn Bhd [2010]
In “Keating on Construction Contracts” [8th Edition, 2006] page 101 – “Whether any
contract is an entire contract is indeed a matter of construction. Clear words are
needed to bring an entire contract into existence”. In this case, the Plaintiff was paid
according to the progress of the works. The subcontract was divisible and capable of
being assigned into several parts with payments to the Plaintiff not dependent on
complete performance by the Plaintiff.

ii de minimis rule –

Performance falls short by insignificant amount. Courts will disregard shortfall.

Shipton, Anderson & Co. v Weil Bros.[1912]

Purchaser ordered 4500 tons of wheat, ‘2 % more or less’. 4950 tons 55 pounds
delivered but purchaser billed for 4950 tons.. Purchaser refused it.
Crt: Purchaser cannot refuse. Difference in weight insignificant. De minimis rule
applied.

iii substantial performance -

Where there has substantial performance of the agreed obligations, the defaulting
party can still get paid for work done. Therefore, although the contract price is
enforceable, the sum required to remedy the defects in the performance will be
deducted from the contract price. Where the cost of rectification is substantially
large the court will not allow recovery of the contract price.

Kabelcom Sdn Bhd. Pakadiri Modal Sdn Bhd [2010]

The plaintiff was employed as a contractor by the 1st defendant to complete its
abandoned housing project at Kerteh, Terengganu. The plaintiff claimed it had
completed 95% of works of 2 contracts executed by the parties.
HC: Both the contracts were essentially contracts which require the plaintiff to
complete the project left undone by the previous contractor without cost breakdown
for items of work to be performed and it is clear that entire performance was not a
condition precedent to payment. The doctrine of substantial performance can
therefore be applied under the circumstances, given that the plaintiff had failed to
complete only a mere 5% of the works in each contract its failure to be construed as
merely a breach of a term of the contract. It should therefore be entitled to be paid for
95% of the contract sums subject to being liable in damages for its failure to complete
the balance of 5% under the doctrine of substantial performance.

iv) Acceptance of part performance -

A party who partially performs a contract cannot enforce the contract price. But the
other party may indicate her acceptance of the benefit of the partial performance. The
court may find that the original contract has been terminated and a new obligation
exists to pay for the partial performance. The performing party can sue on a quantum
meruit for the value of the work done.

Smith Construction Ltd. v Phit Kirivatna [1955] MLJ 8

Plaintiffs employed to build a house for the defendant. The house was built
encroaching on the adjoining land. Defendant was negotiating the owner of the
adjoining land. Plaintiff wanted to be paid for work done but defendant refused.
Plaintiff stopped work. Crt: There was an implied contract by the defendant to pay for
work done. Plaintiff entitled to be paid for work done.

v) complete performance prevented

Example – when owner of a property locks it up thereby preventing contractor from
going in.

Time for performance

s 56 Contracts Act 1950

Effect of failure to perform at fixed time, in contract in which time is essential
(1) When a party to a contract promises to do a certain thing at or before a specified
time, or certain things at or before specified times, and fails to do any such thing at or
before the specified time, the contract, or so much of it as has not been performed,
becomes voidable at the option of the promisee, if the intention of the parties was that
time should be of the essence of the contract.

Effect of failure when time is not essential

(2) If it was not the intention of the parties that time should be of the essence of the
contract, the contract does not become voidable by the failure to do the thing at or
before the specified time; but the promisee is entitled to compensation from the
promisor for any loss occasioned to him by the failure.

Effect of acceptance of performance at time other than that agreed upon

(3) If, in case of a contract voidable on account of the promisor’s failure to perform his
promise at the time agreed, the promise accepts performance of the promise at any
time other than that agreed, the promisee cannot claim compensation for any loss
occasioned by the non-performance of the promise at the time agreed, unless, at the
time of the acceptance, he gives notice to the promisor of his intention to do so.

MARDALE PIPES PLUS LTD v MALAYSIAN INTERNATIONAL TRADING CORP (JAPAN) SDN
BHD [2009]
The Plaintiff was awarded a contract to supply the Defendant pipes. It was an express
term in the letter of award that time was of the essence of the contract. In the event of
a delay the Plaintiff was obligated to notify the Defendant immediately in writing
giving reasons for the delay. There was further a provision for the imposition of
liquidated damages for such delay.
It is not in dispute that the Plaintiff delivered the goods to the Defendant. It is also not
in dispute that the Defendant has refused to settle the sum claimed.
HC: The parties here negotiated at arm’s length the terms of this written contract
which clearly evinces the intention of the parties. In it the parties have agreed that
time shall be of essence. Such is usually the case in commercial contracts. This is no
different. This simply means performance at agreed times was critical.
Nonperformance by the due dates allows the innocent party to treat the contract as
voidable, that is, to reject late delivery. This position under common law is enshrined
in section 56(1) Contracts Act 1950.
However an innocent party may nevertheless choose to accept a late delivery. But
where he chooses to do so and wants to claim for any damages for late delivery he
must notify the other party of this intention at the time of acceptance of late delivery.
This too is encapsulated in section 56(3) Contracts Act 1950. Since no notice was given
at the time of acceptance of delivery at dates other than those stipulated in the
orders then the Plaintiff is entitled to treat the delivery as being accepted by the
Defendant without issue. Such delivery would not set the LAD clause into operation.

2. Discharge by Agreement
Novation – cancelling the original contract and replacing it with a new one.

S 63 Contracts Act 1950 - If the parties to a contract agree to substitute a new contract
for it, or to rescind or alter it, the original contract need not be performed.
ILLUSTRATIONS
(a) A owes money to B under a contract. It is agreed between A, B and C that B shall
henceforth accept C as his debtor, instead of A. The old debt of A to B is at an end, and a
new debt from C to B has been contracted.
(b) A owes B RM10,000. A enters into an arrangement with B, and gives B a mortgage of
his (A’s) estate for RM5,000 in place of the debt of RM10,000. This is a new contract and
extinguishes the old.
(c) A owes B RM1,000 under a contract. B owes C RM1,000. B orders A to credit C with
RM1,000 in his books, but C does not assent to the agreement. B still owes C RM 1,000,
and no new contract has been entered into.

Noraimi Alias v. Rangkaian Hotel Seri Malaysia [2009]

The Defendant owns the exclusive franchise rights to a medium cost hotel chain under
the name of “SERI MALAYSIA”. The plaintiff was contracted to manage the franchise.
The initial term of the franchise was for a period of 8 years, with effect from 21.1.1995
and expiring on 21.1.2003. The agreement provided for a renewal of the franchise for
another term of 8 years subject to terms and conditions.
Before the expiry of this first term, the Defendant informed the Plaintiff of its decision
to extend the franchise by 3 years, till 21.1.2006. This extension was agreed to by the
Plaintiff. By a letter of 10.4.2006, the Defendant informed the Plaintiff that the
franchise agreement which had expired on 21.1.2006 would not be renewed with
effect from 1.6.2006.
Crt: the Franchise Agreement had been mutually varied but only insofar as introducing
the concept of extension of the initial term of franchise from 8 to 11 years. The other
terms and conditions of the Franchise Agreement will continue to apply. This proposal
was accepted by the Plaintiff. At no time did the Plaintiff sought an 8 year term of
renewal. This does not render the performance of the agreement no longer necessary
as provided under section 63 of the Contracts Act 1950. Only the period of renewal of
franchise was varied. Therefore the Defendant’s refusal to renew is invalid as it
violates the terms of the Franchise Agreement.

Discharge by Dispensation
s 64 Contracts Act 1950 Every promisee may dispense with or remit, wholly or in part,
the performance of the promise made to him, or may extend the time for such
performance, or may accept instead of it any satisfaction which he thinks fit.
ILLUSTRATIONS
(a) A promises to paint a picture for B. B afterwards forbids him to do so. A is no longer
bound to perform the promise.
(b) A owes B RM5, 000. A pays to B, and B accepts, in satisfaction of the whole debt,
RM2, 000 paid at the time and place at which the RM5,000 were payable. The whole
debt is discharged.
(c) A owes B RM5,000. C pays to B RM1,000 and B accepts them, in satisfaction of his
claim on A. This payment is a discharge of the whole claim.
(d) A owes B under a contract, a sum of money, the amount of which has not been
ascertained. A, without ascertaining the amount, gives to B, and B, in satisfaction
thereof, accepts the sum of RM2,000. This is a discharge of the whole debt, whatever
may be its amount.
(e) A owes B RM2,000, and is also indebted to other creditors. A makes an arrangement
with his creditors, including B, to pay them a composition of fifty cents in the dollar upon
their respective demands. Payment to B of RM1,000 is a discharge of B’s demand.

Discharge by Operation of Law

Change in the law discharges the parties against their wishes
Frustration

s 57 Contracts Act 1950

(2) A contract to do an act which, after the contract is made, becomes impossible, or by
reason of some event which the promisor could not prevent, unlawful, becomes void
when the act becomes impossible or unlawful.
(3) Where one person has promised to do something which he knew, or, with
reasonable diligence, might have known, and which the promisee did not know, to be
impossible or unlawful, the promisor must make compensation to the promisee for any
loss which the promisee sustains through the non-performance of the promise.
ILLUSTRATIONS
(c) A contracts to marry B, being already married to C, and being forbidden by the law to
which he is subject to practise polygamy. A must make compensation to B for the loss
caused to her by the non-performance of his promise.
(d) A contracts to take in cargo for B at a foreign port. A’s Government afterwards
declares war against the country in which the port is situated. The contract becomes
void when war is declared.
(e) A contracts to act at a theatre for six months in consideration of a sum paid in
advance by B. On several occasions A is too ill to act. The contract to act on those
occasions becomes void.

The test used by Malaysian Courts to determine if a contract is frustrated –

Lord Radcliffe in Davis Contractors Ltd v Fareham Urban Distrcit Council [1956] AC 696
– frustration occurs whenever the law recognises that without default of either party,
a contractual obligation becomes incapable of being performed because the
circumstances in which performance is called for would render it a thing radically
different from that which was undertaken by the contract.

1) Performance of contract becomes illegal through operation of law –

Contract is legal when made but becomes illegal because of change in law.
See illustration (d)

2) destruction of subject matter –

Taylor v Caldwell [1863] 3 B & S 826 -
A music hall hired for a series of concerts was destroyed by fire.
Court held: the contract came to an end and discharged the parties from further obligations
under it. The justification for this is that there was an implied condition that the hall would exist
for the purpose for which it was hired.

3) Personal incapacity –
Where both parties agree that the contract is to be carried out by a particular individual and that
individual dies or is too ill to perform the contract.
Condor v Barron Knights [1966] 1 WLR 87 - a drummer was contracted to play 7 nights a week
but was ill and his doctor advised him not to play for 4 nights. Contract frustrated.
4) by injunction
3rd party obtains an injunction making performance impossible.

Shigenori Ono v Thong Foo Ching [1992] 1 MLJ 117

Defendant entered into agreement to sell land to plaintiff. Before signing the
agreement, defendant rented the ground floor of building located on the land to
Golden Scoope who took out an injunction to prevent the sale. Plaintiff rescinded the
agreement claiming frustration.
Crt: Injunction prevented the defendant from completing the sale.

Limitations of the doctrine of frustration –

a) A contract will not be frustrated where there is an express provision in the contract
providing for the intervening event.

Claude Neon Ltd v Hardie [1970] Qd R 93 –

Defendant agreed to hire from the plaintiff an illuminated sign to be placed on the
defendant’s building. There was a clause in the agreement that the unpaid balance
of the rental will be paid forthwith if the premises become ‘extinguished or
transferred’. The premises were acquired by the govt. The plaintiffs invoked the
clause and demanded payment of the unpaid balance. The defendant claimed the
agreement was frustrated by the acquisition.
Court – The acquisition was an extinguishment of the defendant’s interest in the
premises and the consequences were provided in the agreement.

b) contract does not become impossible but only more expensive

Davis Contractors v Fareham UDC [1956] AC 696

the claimant who were contractors agreed to build 78 houses for the defendants for
94,000 pounds. The work was to last for 8 months but it took 14 months due to
shortage of labor. The claimant argued that the contract was frustrated.
Lord Radcliffe: rejected the claimants argument saying that what had happened was
not 'hardship or inconvenience or material loss itself which calls the principle of
frustration into play. There must be as well such a change in the significance of the
obligation that the thing undertaken would, if performed, be a different thing from
that contracted for.'

c) Self-Induced Frustration
Where the frustrating event was caused by the default or action of a party to the
contract, that party is precluded from claiming discharge by frustration. The party
relying on this form of frustration has the burden to prove it.
 Maritime National Fish Ltd v Ocean Trawlers Ltd [1935] AC 524
Govt passed legislation making it compulsory to have a license to fish. The
charterers of a trawler applied for 5 licenses but only got 3 which they used for
their other trawler. No license was applied to the St Cuthbert. They claimed that
the contract with the owner was frustrated because of the new legislation.
Court – it was the charterers own fault for not applying one of its license to the St
Cuthbert.

Effect –
S 15 Civil Law Act 1956
(1) Where a contract has become impossible of performance or been otherwise
frustrated, and the parties thereto have for that reason been discharged from the
further performance of the contract, subsections (2) to (6) shall, subject to section 16,
have effect in relation thereto.
(2) All sums paid or payable to any party in pursuance of the contract before the time
when the parties were so discharged (in this Act referred to as “the time of discharge”)
shall, in the case of sums so paid, be recoverable from him as money received by him for
the use of the party by whom the sums were paid, and, in the
case of sums so payable, cease to be so payable:
Provided that, if the party to whom the sums were so paid or payable incurred expenses
before the time of discharge in, or for the purpose of, the performance of the contract,
the Court may, if it considers it just to do so having regard to all the circumstances of the
case, allow him to retain or, as the case may be, recover the whole or any part of the
sums so paid or payable, not being an amount in excess of the expenses so incurred.
(3) Where any party to the contract has, by reason of anything done by any other party
thereto in, or for the purpose of, the performance of the contract, obtained a valuable
benefit (other than a payment of money to which subsection (2) applies) before the time
of discharge, there shall be recoverable from him by the said other party such sum (if
any), not exceeding the value of the said benefit to the party obtaining it, as the Court
considers just, having regard to all the circumstances of the case and, in particular—
(a) the amount of any expenses incurred before the time of discharge by the party
benefited in, or for the purpose of, the performance of the contract, including any sums
paid or payable by him to any other party in pursuance of the contract and retained or
recoverable by that party under subsection (2); and
(b) the effect, in relation to the said benefit, of the circumstances giving rise to the
frustration of the contract.
(4) In estimating, for the purposes of subsections (1) to (3), the amount of any expenses
incurred by any party to the contract, the Court may, without prejudice to the generality
of the said subsections, include such sum as appears to be reasonable in respect of
overhead expenses and in respect of any work or services performed personally by the
said party.
(5) In considering whether any sum ought to be recovered or retained under subsections
(1) to (4) by any party to the contract the Court shall not take into account any sums
which have, by reason of the circumstances giving rise to the frustration of the contract,
become payable to that party under any contract of insurance unless there was an
obligation to insure imposed by an express term of the frustrated contract or by or
under any enactment.
(6) Where any person has assumed obligations under the contract in consideration of
the conferring of a benefit by any other party to the contract upon any other person,
whether a party to the contract or not, the Court may, if in all the circumstances of the
case it considers it just to do so, treat for the purposes of subsection (3) any benefit so
conferred as a benefit obtained by the person who has assumed the obligations as
aforesaid.

S 66 Contracts Act 1950 When an agreement is discovered to be void, or when a

contract becomes void, any person who has received any advantage under the
agreement or contract is bound to restore it, or to make compensation for it, to the
person from whom he received it.
ILLUSTRATIONS
(d) A contracts to sing for B at a concert for RM1,000, which are paid in advance. A is
too ill to sing. A is not bound to make compensation to B for the loss of the profits which
B would have made if A had been able to sing, but must refund to B the RM1,000 paid in
advance.
Breach of Contract
Where one party refuses to continue performing or commits an act, which prevents
further performance, it is clear that a breach of contract has occurred. It entitles the
innocent party to terminate the contract, not perform it and claim damages or affirm the
contract, perform it and claim damages.

Repudiation
Not all breaches entitle the innocent to terminate. Only breach of a condition of the
contract and not breach of a warranty.

Rasiah Munusamy v. Lim Tan & Sons Sdn. Bhd. [1985] 1 CLJ 541
It should be observed that not every refusal to perform some part of a contract will
amount to a renunciation. Even a deliberate breach will not necessarily entitle the
innocent party to treat himself as discharged, since it may sometime be that such a
breach can appropriately be sanctioned by damages (see Suisse Atlantique Societe v
NV Rotterdamsche Kolen Centrale [1967] 1 AC 367, 435). It is not a mere refusal or
omission of one of the contracting parties to do something which he ought to do that
will justify the other in repudiating the contract, but there must be an absolute refusal
to perform his part of the contract (see Freeth v Burr (1874) LR 9 CP 208, 214). If there
is an absolute refusal to perform, the other party may treat himself as discharged.
Short of an express refusal, however, the test is to ascertain whether the action or
actions of the party in default are such as to lead a reasonable person to conclude that
he no longer intends to be bound by its provisions. Where such an inference cannot be
drawn, the innocent party will be entitled to claim damages for breach, but not to
treat himself as discharged. In particular where there is a genuine dispute as to the
construction of a contract, the courts may be unwilling to hold that an expression of an
intention by one party to carry out the contract only in accordance with his own
erroneous interpretation of it amounts to a repudiation (see Chitty on Contracts, 25th
Ed vol 1, para 1602, page 884).

s 40 Contracts Act 1950 When a party to a contract has refused to perform, or disabled
himself from performing, his promise in its entirety, the promise may put an end to the
contract, unless he has signified, by words or conduct, his acquiescence in its
continuance.
ILLUSTRATIONS
(a) A, a singer, enters into a contract with B, the manager of a theatre, to sing at his
theatre two nights in every week during the next two months, and B engages to pay her
RM100 for each night’s performance. On the sixth night A wilfully absents herself from
the theatre. B is at liberty to put an end to the contract.
(b) A, a singer, enters into a contract with B, the manager of a theatre, to sing at his
theatre two nights in every week during the next two months, and B engages to pay her
at the rate of RM100 for each night. On the sixth night A wilfully absents herself. With
the assent of B, A sings on the seventh night. B has signified his acquiescence in the
continuance of the contract, and cannot now put an end to it, but is entitled to
compensation for the damage sustained by him through A’s failure to sing on the sixth
night.

Chin Kit Yee & Anor v. Yeng Chong Realty Bhd (Low Hop Bing J) [2006] 4 CLJ 432 [HC]

Pursuant to the SPA, the defendant agreed to sell and the plaintiffs agreed to buy a
bungalow lot identified as Lot C1036 in the project known as Bandar Golden Valley
Golf Resort ("the project"), for which the plaintiffs have made part payments which
now amount to the said sum. Clause 16 of the SPA requires the defendant to deliver
vacant possession of the bungalow lot within 36 months of the date of the SPA.
However, the defendant has failed to do so as the project has since been abandoned.
Vide letter dated 14 June 2003 issued by the plaintiffs' solicitors, the plaintiffs had
terminated the agreement and demanded the refund of the said sum, which the
defendant has also failed to do.

Crt: The plaintiffs' reliance on s. 40 is justified by the defendant's abandonment of the

project as well as the defendant's refusal or disability to deliver the bungalow lot to
the plaintiffs pursuant to the SPA, as a result of which the SPA is voidable at the option
of the plaintiff as the promisee. The legal effect of s. 40 has been succinctly stated by
the Federal Court through the judgment of MacIntyre J (as he then was) in Yong Mok
Hin, supra, at p 15 B-I left column ie, to render a contract (which a promisor refuses to
perform or disables himself from performing) voidable at the option of the promisee
eg, when the promisor (such as the defendant herein) has repudiated the contract by
abandoning the project.
Damages
Effect of breach resulting in the discharge of the contract –
Contract comes to an end;
Parties released from further performance;
Obligations accrued before the discharge must be performed or paid for;
Innocent party can sue for damages/SP/injunction
Innocent party can still continue with the contract but sue for damages/SP/injunction.

SP and injunction - equitable remedies.

Damages – common law remedy.

The object/purpose of damages in contract is to compensate the innocent party for loss
sustained by the breach and not punish the wrongdoer.

Types of Damages –
1. Ordinary/compensatory – also known as general damages.
Must prove loss suffered in order to claim for damages.

2. Nominal damages – no loss suffered but breach of contract occurred.

Assessment -
1. Remoteness
2. Measure of damages

Hadley v Baxendale [1854] 9 Ex 341

Pl., flour mill owner sent broken crankshaft to def., delivery co., to deliver to
engineers. Delivery of the shaft delayed. Mill stopped for 5 days longer than it causing
loss of profits.
Crt – def. not liable for loss of profits. He was a carrier who did not know mill will be
stopped. The plaintiff’s loss of profit was not within the contemplation of the
defendant.
Alderson B ‘Where two parties have made a contract which one of them has broken,
the damages which the other party ought to receive in respect of such breach of
contract should be such as fairly and reasonably be considered either arising naturally,
i.e. according to the usual course of things, from such breach of contract itself, OR such
as may reasonably be supposed to have been in the contemplation of both parties, at
the time they made the contract, as the probable result of the breach of it’.
2 limbs of the rule in Hadley v Baxendale –
First Limb of Hadley - ‘damages that arise naturally… according to the usual course of
things’ – such damages are recoverable.
Second limb of Hadley – unusual loss. Beyond those that arise naturally.

Victoria Laundry (Windsor) v Newman Industries [1949] 2 KB 528 –

Plaintiff purchased from the defendant a boiler to be used for dyeing and dry cleaning
business. Defendant caused damage to the machinery when moving it and the plaintiff
refused to take possession until it was repaired. Defendant delayed for 5 months in
delivery.
Court – plaintiff could recover for loss of profits in respect of dyeing contracts that
were reasonably expected as it resulted from the ordinary business of the plaintiff.
Plaintiff could not recover for the loss of the more lucrative businesses.
ASQUITH LJ:
(1) It is well settled that the governing purpose of damages is to put the party whose
rights have been violated in the same position, so far as money can do so, as if his
rights had been observed: Wertheim v Chicoutimi Pulp Co. This purpose, if relentlessly
pursued, would provide him with a complete indemnity for all loss de facto resulting
from a particular breach, however improbable, however unpredictable. This, in
contract at least, is recognised as too harsh a rule.
(2): In cases of breach of contract the aggrieved party is only entitled to recover such
part of the loss actually resulting as was at the time of the contract reasonably
foreseeable as liable to result from the breach.
(3) What was at that time reasonably foreseeable depends on the knowledge then
possessed by the parties, or, at all events, by the party who later commits the breach.
(4) For this purpose, knowledge ‘possessed’ is of two kinds -- one imputed, the other
actual. Everyone, as a reasonable person, is taken to know the ‘ordinary course of
things’ and consequently what loss is liable to result from a breach in that ordinary
course. This is the subject-matter of the ‘first rule’ in Hadley v Baxendale, but to this
knowledge, which a contract-breaker is assumed to possess whether he actually
possesses it or not, there may have to be added in a particular case knowledge which
he actually possesses of special circumstances outside the ‘ordinary course of things’
of such a kind that a breach in those special circumstances would be liable to cause
more loss. Such a case attracts the operation of the ‘second rule’ so as to make
additional loss also recoverable.
(5) In order to make the contract-breaker liable under either rule it is not necessary
that he should actually have asked himself what loss is liable to result from a breach.
As has often been pointed out, parties at the time of contracting contemplate, not the
breach of the contract, but its performance. It suffices that, if he had considered the
question, he would as a reasonable man have concluded that the loss in question was
liable to result: see certain observations of Lord Du Parcq in Monarch Steamship Co.,
Ltd. v A/B Karlshamns Oljefrabriker ([1949] 1 All ER 19). (6), Nor, finally, to make a
particular loss recoverable, need it be proved that on a given state of knowledge the
defendant could, as a reasonable man, foresee that a breach must necessarily result in
that loss. It is enough if he could foresee it was likely so to result. It is enough, to
borrow from the language of Lord Du Parcq in the same case, if the loss (or some
factor without which it would not have occurred) is a ‘serious possibility’ or a ‘real
danger.’ For short, we have used the word ‘liable’ to result. Possibly the colloquialism
‘on the cards’ indicates the shade of meaning with some approach to accuracy.

Codification of Hadley is found in s 74 Contracts Act 1950 –

(1) When a contract has been broken, the party who suffers 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, which naturally arose in the usual course of things from
the breach, or which the parties knew, when 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.
(3) When an obligation resembling those created by contract has been incurred and has not
been discharged, any person injured by the failure to discharge it is entitled to receive the same
compensation from the party in default as if the person had contracted to discharge it and had
broken his contract.
Explanation— In estimating the loss or damage arising from a breach of contract, the means
which existed of remedying the inconvenience caused by the non-performance of the contract
must be taken into account.
ILLUSTRATIONS
(a) A contracts to sell and deliver 50 gantangs of saltpetre to B, at a certain price to be paid on
delivery. A breaks his promise. B is entitled to receive from A, by way of compensation, the sum,
if any, by which the contract price falls short of the price for which B might have obtained 50
gantangs of saltpetre of like quality at the time when the saltpetre ought to have been delivered.
(b) A hires B’s ship to go to Telok Anson, and there take on board, on the 1st of January, a cargo,
which A is to provide, and to bring it to Port Dickson, the freight to be paid when earned. B’s ship
does not go to Teluk Intan, but A has opportunities of procuring suitable conveyance for the
cargo upon terms as advantageous as those on which he had chartered the ship. A avails himself
of those opportunities, but is put to trouble and expense in doing so. A is entitled to receive
compensation from B in respect of the trouble and expense.
(c) A contracts to buy of B, at a stated price, 50 gantangs of rice, no time being fixed for delivery.
A afterwards informs B that he will not accept the rice if tendered to him. B is entitled to receive
from A, by way of compensation the amount, if any, by which the contract price exceeds that
which B can obtain for the rice at the time when A informs B that he will not accept it.
(d) A contracts to buy B’s ship for RM60,000, but breaks his promise. A must pay to B, by way of
compensation, the excess, if any, of the contract price over the price which B can obtain for the
ship at the time of the breach of promise.
(e) A, the owner of a boat, contracts with B to take a cargo of tin to Singapore, for sale at that
place, starting on a specified day. The boat, owing to some avoidable cause, does not start at the
time appointed, whereby the arrival of the cargo at Singapore is delayed beyond the time when
it would have arrived if the boat had sailed according to the contract. After that date, and
before the arrival of the cargo, the price of tin falls. The measure of the compensation payable to
B by A is the difference between the price which B could have obtained for the cargo at
Singapore, at the time when it would have arrived if forwarded in due course, and its market
price at the time when it actually arrived.
(f) A contracts to repair B’s house in a certain manner, and receivespayment in advance. A
repairs the house, but not according to contract. B is entitled to recover from A the cost of
making the repairs conform to the contract.
(g) A contracts to let his ship to B for a year, from the 1st of January, for acertain price. Freights
rise, and, on the 1st of January, the hire obtainable for the ship is higher than the contract price.
A breaks his promise. He must pay to B, by way of compensation, a sum equal to the difference
between the contract price and the price for which B could hire a similar ship for a year on and
from the 1st of January.
(h) A contracts to supply B with a certain quantity of iron at a fixed price, being a higher price
than that for which A could procure and deliver the iron. B wrongfully refuses to receive the iron.
B must pay to A, by way of compensation, the difference between the contract price of the iron
and the sum for which A could have obtained and delivered it.
(i) A delivers to B, a carrier, a machine, to be conveyed, without delay, to A’s mill, informing B
that his mill is stopped for want of the machine. B unreasonably delays the delivery of the
machine, and A, in consequence, loses a profitable contract with the Government. A is entitled
to receive from B, by way of compensation, the average amount of profit which would have been
made by the working of the mill during the time that delivery of it was delayed, but not the loss
sustained through the loss of the Government contract.
(j) A, having contracted with B to supply B with 1,000 tons of iron at RM100 a ton, to be
delivered at a stated time, contracts with C for the purchase of 1,000 tons of iron at RM80 a ton,
telling C that he does so for the purpose of performing his contract with B. C fails to perform his
contract with A, who cannot procure other iron, and B, in consequence, rescinds the contract. C
must pay to A RM20,000, being the profit which A would have made by the performance of his
contract with B.
(k) A contracts with B to make and deliver to B, by a fixed day, for a specified price, a certain
piece of machinery. A does not deliver the piece of machinery at the time specified, and, in
consequence of this, B is obliged to procure another at a higher price than that which he was to
have paid to A, and is prevented from performing a contract which B had made with a third
person at the time of his contract with A (but which had not been then communicated to A), and
is compelled to make compensation for breach of that contract. A must pay to B, by way of
compensation, the difference between the contract price of the piece of machinery and the sum
paid by B for another, but not the sum paid by B to the third person by way of compensation.
(l) A, a builder, contracts to erect and finish a house by the 1st of January, in order that B may
give possession of it at that time to C, to whom B has contracted to let it. A is informed of the
contract between B and C. A builds the house so badly that, before the 1st of January, it falls
down and has to be rebuilt by B, who in consequence, loses the rent which he was to have
received from C, and is obliged to make compensation to C for the breach of his contract. A must
make compensation to B for the cost of rebuilding the house, for the rent lost and for the
compensation made to C.
(m) A sells certain merchandise to B, warranting it to be of a particular quality, and B, in reliance
upon this warranty, sells it to C with similar warranty. The goods prove to be not according to the
warranty, and B becomes liable to pay C a sum of money by way of compensation. B is entitled to
be reimbursed this sum by A.
(n) A contracts to pay a sum of money to B on a day specified. A does not pay the money on that
day. B, in consequence of not receiving the money on that day, is unable to pay his debts and is
totally ruined. A is not liable to make good to B anything except the principal sum he contracted
to pay, together with interest up to the day of payment.
(o) A contracts to deliver 50 gantangs of saltpetre to B on the 1st of January, at a certain price. B
afterwards, before the 1st of January, contracts to sell the saltpetre to C at a higher price than
the market price of the 1st of January. A breaks his promise. In estimating the compensation
payable by A to B, the market price of the 1st of January, and not the profit which would have
arisen to B from the sale to C, is to be taken into account.
(p) A contracts to sell and deliver 500 bales of cotton to B on a fixed day. A knows nothing of B’s
mode of conducting his business. A breaks his promise, and B, having no cotton, is obliged to
close his mill. A is not responsible to B for the loss caused to B by the closing of the mill.
(q) A contracts to sell and deliver to B, on the 1st of January, certain cloth which B intends to
manufacture into caps of a particular kind, for which there is no demand, except at that season.
The cloth is not delivered till after the appointed time, and too late to be used that year in
making caps. B is entitled to receive from A, by way of compensation, the difference between
the contract price of the cloth and its market price at the time of delivery, but not the profits
which he expected to obtain by making caps, nor the expenses which he has been put to in
making preparation for the manufacture.
(r) A, a shipowner, contracts with B to convey him from Kelang to Sydney in A’s ship, sailing on
the 1st of January, and B pays to A, by way of deposit, one-half of his passage-money. The ship
does not sail on the 1st of January, and B, after being, in consequence, detained in Kelang for
some time, and thereby put to some expense, proceeds to Sydney in another vessel, and, in
consequence, arriving too late in Sydney, loses a sum of money. A is liable to repay to B his
deposit, with interest, and the expense to which he is put by his detention in Kelang, and the
excess, if any, of the passage-money paid for the second ship over that agreed upon for the first,
but not the sum of money which B lost by arriving in Sydney too late.

Bank Bumiputra Malaysia Bhd Kuala Trengganu v. Mae Perkayuan Sdn Bhd & Anor
[1993] 2 CLJ 495
In June 1983, the respondent, Mae Perkayuan Sdn. Bhd. wanted to develop certain
lands into a housing estate. The respondent approached the appellant, Bank
Bumiputra Malaysia Bhd. for a loan. On 25 June 1983, the Bank having studied details
of the proposals of the respondent, agreed to grant ‘overdraft facilities’ to the
respondent, in the sum of RM4,500,000.
SC: The consequences of a breach of contract are governed by s. 74 of the Contract Act
1950 which is the same as in England, and requires that the damage or loss suffered
must be within the contemplation of both parties. In this case, the Bank had full
knowledge from the very beginning that the project, if successfully and duly
completed, would bring in a profit of about RM5.3 million to the respondent. The Bank
had studied every aspect of the project and had decided what amount was required by
the first respondent as bridging finance before the first respondent could be expected
to derive a profit from sales of dwelling houses. We are, therefore, of the view that the
loss of profits on the housing project which the respondent would suffer was the
natural and probable result of the breach of agreement by the Bank, and when the
Bank agreed to provide the bridging finance to the first respondent, the Bank well
knew of the loss that the first respondent would incur should the Bank break the
contract.

Damages for inconvenience and injured feelings –

Jarvis v Swans Tours [1973] QB 233
Jarvis booked a 2 week package to Switzerland after reading a brochure by Swan Tours.
Very few of the promises in the brochure were kept. Proprietor of the inn could not
speak English, skis were too small and the entertainment comprised of a local singer
who sang a few songs.
CA – Jarvis was entitled to damages for his disappointment, distress, upset and
frustration in addition to economic loss.

Baltic Shipping v Dillon [1993] 176 CLR 344

Mrs Dillon was a passenger in a cruise ship which sank shortly after the cruise began.
She was safe but sued for damages for disappointment and distress and was awarded
$5000. Shipping company appealed but appeal failed. She was entitled to damages
because the object of the cruise was for enjoyment and relaxation which she was
deprived of.
Mason CJ: ‘Where the very object of a contract is to provide pleasure, relaxation,
peace of mind or freedom from molestation, damages will be awarded if the fruit of
the contract is not provided or if the contrary result is procured instead. If the law did
not cater for this exceptional category of case it would be defective.’

Subramaniam Paramasivam. vs Malaysian Airline System Bhd [2002]

The plaintiffs were passengers of Malaysian Air System Flight MH 181 from Madras to
Kuala Lumpur on June 1, 1995. They had checked in with their baggage at Madras
airport and had an excess baggage of 20kg. They paid the excess baggage payment of
Rs4080 (RM325) imposed by the defendant.
Upon landing at Subang International Airport, Kuala Lumpur, the plaintiffs were
stopped by an officer of the airline who insisted that their baggage be re-weighed.
They were directed to a baggage counter where the defendant's employees went
through another process of re-weighing the baggage. The baggage was found to be
60kg in excess instead of only 20kg as determined at Madras Airport. The defendant's
employees insisted that the plaintiffs pay an additional RM618 failing which the
baggage would not be released.
They protested but to no avail. The ordeal lasted some two hours from 5.40 a.m. to
7.40 a.m. when in the end the plaintiffs managed somehow to settle the sum with the
defendant.
The First plaintiff was a practising lawyer. He was the head of the youth wing of the
Malaysian Indian Congress and was also its chief of information for the State of Perak.
He also held the chairmanship of two private registered companies. At the time he
arrived at Subang Airport his friends and supporters were waiting to welcome him. He
did not have enough money to pay to the defendant as he had already spent all of it
on his relatives in India. He had to resort to borrow the sum from his friends in
consequence of which they had put him in low esteem. By reason of the act of the
defendant he said he suffered physical inconvenience, mental distress, agony,
humiliation, loss of reputation and injured feeling.
The second plaintiff was the wife of the first plaintiff. She went through the same
experience and claimed to have suffered the same loss as the first plaintiff as a result.
She also claimed to have suffered flight phobia as she came to realise later that the
plane had been flying with excess weight and had therefore compromised on safety.
She consulted her doctor a Dr Raja Ram who gave evidence supporting her complaint.
He treated her for weakness and fatigue, but not for any psychological condition.
HC: a claimant must prove his loss. To "prove", in the context of the speech of Lord
Goddard means to provide some form of evidence sufficient to convince the
decider to the point that he believes it to exist or considers its existence so
probable that a prudent man ought, under the circumstances of the particular
case, to act on the supposition that it exists. The plaintiffs provided none of the
evidence that they claimed to have suffered beyond the mere assertion of having
suffered them. Being forced to wait at the airport for a while longer than necessary
for the purpose of attending to problems relating the clearance of one's baggage
was nothing extraordinary. Had their egress from the airport been without let or
hindrance, they would have arrived home some two hours earlier in time to start a
new day with a clear mind and purpose. In all fairness therefore, they should be
compensated for the discomfort and inconvenience they had undergone. This
should translate in monetary form, in my estimate, to the cost of providing each of
them with a day's rest, say the sum of RM300.

Mitigation –
See explanation to s 74.
Malaysian Rubber Development Corp Bhd v Glove Seal Sdn Bhd (1994) 3 MLJ 569
It is settled principle that the plaintiff is under a duty to take reasonable steps to
mitigate the loss consequent to the defendant’s wrong and he will not get damages in
respect of any part of the loss which is due to his neglect to take such steps. In the sale
of goods, the principle of mitigation is a foundation of the normal rule for the measure
of damages which requires the innocent party to act immediately upon the breach,
buy or sell in the market, if there is an available market. Even in the absence of an
available market, the innocent party must act reasonably to mitigate his loss. The
question of what is reasonable or whether the plaintiff has acted reasonably in
mitigation of his damages in every case is a question of fact and not law.
Expectation loss –
See s 74 illustration (d).
Gains or profits innocent party expected to get upon completion of performance of
contract.

Reliance loss –
Expenses and costs innocent part incurred relying on promise of other party.

Restitutionary damages –
Innocent party suffers no loss but wrongdoer makes hugh profit even though he has
breached contract – in exceptional cases the court would not only put the parties in the
position they were had the contract been performed but also make the wrongdoer part
with some of his profits to the innocent party.

Liquidated damages
Parties to a contract may stipulate an amount payable in the event of a breach. This will
be referred to as liquidated or agreed damages.
A ‘liquidated sum’ is a sum that is fixed by the terms of the contract and it is a genuine
pre-estimate of the actual damage suffered which is recoverable as a debt. If the sum is
not a genuine estimate i.e. it is penal in nature, being extravagant and unconscionable,
then it cannot be recovered and is treated as a penalty. This will not be enforced by the
courts.

s 75 Contracts Act 1950 - When a contract has been broken, if a sum is named in the
contract as the amount to be paid in case of such breach, or if the contract contains any
other stipulation by way of penalty, the party complaining of the breach is entitled,
whether or not actual damage or loss is proved to have been caused thereby, to receive
from the party who has broken the contract reasonable compensation not exceeding the
amount so named or, as the case may be, the penalty stipulated for.
Explanation—A stipulation for increased interest from the date of default may be a
stipulation by way of penalty.
ILLUSTRATIONS
(a) A contracts with B to pay B RM1,000, if he fails to pay B RM500 on a given day. A fails
to pay B RM500 on that day, B is entitled to recover from A such compensation, not
exceeding RM1,000, as the court considers reasonable.
(b) A contracts with B that, if A practises as a surgeon within Calcutta, he will pay B
RM5,000. A practises as a surgeon in Calcutta. B is entitled to such compensation, not
exceeding RM5,000, as the court considers reasonable.
(c) A gives a recognizance binding him in a penalty of RM500 to appear in court on a
certain day. He forfeits his recognizance. He is liable to pay the whole penalty.
(d) A gives B a bond for the repayment of RM1,000 with interest at 12 per cent at the
end of six months, with a stipulation that, in case of default, interest shall be payable at
the rate of 75 per cent from the date of default. This is a stipulation by way of penalty,
and B is only entitled to recover from A such compensation as the court considers
reasonable.
(e) A who owes money to B, a moneylender, undertakes to repay him by delivering to
him 10 gantangs of grain on a certain date, and stipulates that, in the event of his not
delivering the stipulated amount by the stipulated date, he shall be liable to deliver 20
gantangs. This is a stipulation by way of penalty, and B is only entitled to reasonable
compensation in case of breach.
(f) A undertakes to repay B a loan of RM1,000 by five equal monthly instalments, with a
stipulation that, in default of payment of any instalment, the whole shall become due.
This stipulation is not by way of penalty, and the contract may be enforced according to
its terms.
(g) A borrows RM100 from B and gives him a bond for RM200 payable by five yearly
instalments of RM40, with a stipulation that, in default of payment of any instalment,
the whole shall become due. This is a stipulation by way of penalty.

Selva Kumar a/l Murugiah v. Thiagarajah a/l Retnasamy [1995] 1 MLJ 817

Both the appellant and respondent in this case are medical practitioners. The
appellant entered into an agreement in writing ("the agreement") with the
respondent whereby the respondent sold his clinic to the appellant for a total
purchase price of RM120,000. Pursuant to the agreement, the appellant paid to the
respondent RM12,000 on signing the agreement, and thereafter paid a further sum of
RM48,000. The balance of RM60,000 was to be paid by 15 monthly instalments of
RM4,000 each. However, at the stage when the appellant had paid up to a total sum of
RM96,000 towards the total purchase price, he refused to go on paying the remaining
six monthly instalments. The respondent sought to forfeit the RM96,000 by relying on
a clause in the agreement which in effect, provided that if the appellant defaulted, all
moneys paid to date of such breach would be forfeited absolutely to the respondent
as agreed liquidated damages, and the agreement would be terminated. The
respondent successfully obtained a declaration from the High Court that the clause
was valid and enforceable. The appellant appealed.

In Malaysia, there is no distinction between liquidated damages and penalties as

understood under English law, in view of s. 75 of the Contracts Act 1950 which
provides that in every case the court must determine what is the reasonable
compensation, ‘whether or not actual damage or loss is proved to have been caused
thereby’ ("the words in question").

However, the words in question must be given a restricted construction. Hence,

despite the words in question, a plaintiff who is claiming for actual damages in an
action for breach of contract must still prove the actual damages or the reasonable
compensation in accordance with the settled principles in Hadley v. Baxendale [1854]
9 Exch 341; [1843-60] All ER Rep. 461. Any failure to prove such damages will result in
the refusal of the court to award such damages.

However, for cases where the court finds it difficult to assess damages for the actual
damage as there is no known measure of damages employable, and yet the evidence
clearly shows some real loss inherently which is not too remote, the words in question
will apply. The court ought to award substantial damages as opposed to nominal
damages which are reasonable and fair according to the court’s good sense and fair
play. In any event, the damages awarded must not exceed the sum so named in the
contractual provision.

Johor Coastal Development Sdn Bhd v Constrajaya Sdn Bhd [2009] 4 MLJ 445
S 75 was taken from s. 74 of the Indian Act 1872 and first introduced as Contract
Enactment 1889 later Cap. 52 (Revised FMS Enactments). In Selva Kumar a/l Murugiah
v. Thiagarajah a/l Retnasamy [1995] 1 MLJ 817 the Federal Court had comprehensively
considered both the local and Indian authorities on s. 75 of the Act and s. 74 of the
Indian Act. For completeness,
It should be noted that the facts in Selva Kumar is no different from the present case
even though it involved the sale of a clinic. In Selva Kumar, the Federal Court
examined the following Indian cases dealing with s. 74 of the Indian Act, which is in
pari materia with our s. 75,
It is pertinent to refer to the observations made in some of these cases. In Bhai Panna
Singh, Lord Atkin who delivered the judgments of the PC stated:
The effect of s. 74 Contracts Act of 1892 is to entitle the plaintiffs to recover the
sum of Rs10,000 whether penalty or liquidated damages, the plaintiffs must
prove the damages they have suffered.
Reverting to the first question posed to us, based on the authorities considered above,
it is my view that the legal position may be summarised as follows:
The appellant/vendor cannot recover or retain without proof by evidence of the loss
or damage suffered as a result of the breach of the agreements. This is because s. 75 of
the Act provides that in every case, the court must determine what is reasonable
compensation, "whether or not actual damage or loss is proved to have been caused
thereby."
And as was held in Selva Kumar actual damages or reasonable compensation must be
proved in accordance with the principles set out in Hadley v. Baxendale [1854] 9 Exch.
341; [1843-1860] 9 Exch. 341.
Specific Performance
Equitable remedy.
Discretionary remedy – s 21 Specific Relief Act 1950.
It is a court order requiring a defendant to perform the contract or directing the
defendant to fulfill his obligations under the contract where it is not done. Ordered
where damages not adequate.

Circumstances where SP wld be ordered –

1. S&P of land
2. subjectmatter of contract is rare e.g. antiques or unique painting
3. exceptional cases – damages can be awarded but it would be nominal.

Circumstances where SP wld NOT be ordered –

1. damages adequate
2. Contract requires supervision
3. Performance of the contract is impossible.
SP cannot enforce that which cannot be done. E.g. in cases for the sale of land,
SP cannot be ordered where the land has passed to a 3rd party.
4. Plaintiff is guilty of laches.
SP will be refused if the plaintiff has been guilty of delay and this delay prejudices
the defendant’s position.
PALMERSTON HOLDINGS SDN BHD V. SULASTRI MOHD HOESSEIN ENAS [2005] 8 CLJ
Sale and Purchase of land.
The doctrine of laches in the court of equity is not an arbitrary or technical
doctrine and the discretion is founded on the principle that there may be
circumstances when it would be practically unjust to give a remedy of specific
performance eg. either because a party has by his conduct done that which
might be fairly be regarded as a waiver or put the other party in a situation in
which it would be unreasonable to place him if the remedy were afterwards to
be asserted - M. Ratnavale and Saad Marwi. The fundamental principles
governing the granting or refusal of specific performance are basically that
specific performance is an equitable remedy which is special and extraordinary
in its character, that the court's power to grant it are not arbitrary or capricious
but rather a discretionary power which is to be exercised on fixed principles
and that the conduct of the plaintiff such as delay or laches may render it
inequitable to grant the remedy.
5. Contracts for Personal Services
CH Giles & Co Ltd v Morris [1972] 1 All ER 960
Megarry J observed: The reasons why the court is reluctant to decree specific
performance of a contract for personal services (and I would regard it as a strong
reluctance rather than a rule) are, I think, more complex and more firmly bottomed on
human nature. If a singer contracts to sing, there could no doubt be .... proceedings for
committal if, ordered to sing, the singer remained obstinately dumb. But if instead the
singer sang flat, or sharp, or too fast, or too slow, or too loudly, or too quietly) or
resorted to a dozen of the manifestations of temperament traditionally associated
with some singers, the threat of committal would reveal itself as a most unsatisfactory
weapon; for who could say whether the imperfections of performance were natural or
self-induced? To make an order with such possibilities of evasion would be vain; and
so the order will not be made.

Cases in which specific performance enforceable

S 11 Specific Relief Act 1950
(1) Except as otherwise provided in this Chapter, the specific performance of any
contract may, in the discretion of the court, be enforced—
(b) when there exists no standard for ascertaining the actual damage caused by the non-
performance of the act agreed to be done;
ILLUSTRATION
A agrees to buy, and B agrees to sell, a picture by a dead painter and two rare China
vases. A may compel B specifically to perform this contract, for there is no standard for
ascertaining the actual damage which would be caused by its non-performance.
(c) when the act agreed to be done is such that pecuniary compensation for its non-
performance would not afford adequate relief; or
ILLUSTRATIONS
(a) A contracts with B to sell him a house for RM1,000. B is entitled to a decree directing
A to convey the house to him, he paying the purchasemoney.
(b) In consideration of being released from certain obligations imposed on it by its Act of
incorporation, a railway company contracts with Z to make an archway through their
railway to connect lands of Z served by the railway, to construct a road between certain
specified points, to pay a certain annual sum towards the maintenance of this road, and
also to construct a siding and a wharf as specified in the contract. Z is entitled to have
this contract specifically enforced, for his interest in its performance cannot be
adequately compensated for by money; and the court may appoint a proper person to
superintend the construction of the archway, road, siding, and wharf.
(c) A contracts to sell, and B contracts to buy, a certain number of railway-shares of a
particular description. A refuses to complete the sale. B may compel A specifically to
perform this agreement, for the shares are limited in number and not always to be had
in the market, and their possession carries with it the status of a shareholder, which
cannot otherwise be procured.
(d) A contracts with B to paint a picture for B, who agrees to pay therefore RM1,000. The
picture is painted. B is entitled to have it delivered to him on payment or tender of the
RM1,000.
(d) when it is probable that pecuniary compensation cannot be got for the non-
performance of the act agreed to be done.
ILLUSTRATION
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 A’s liabilities and a decree for pecuniary compensation for
not endorsing the note would be fruitless.
(2) Unless and until the contrary is proved, the court shall presume that the breach of a
contract to transfer immovable property cannot be adequately relieved by
compensation in money, and that the breach of a contract to transfer movable property
can be thus relieved.

20. (1) The following contracts cannot be specifically enforced:

(a) a contract for the non-performance of which compensation in money is an adequate
relief;
ILLUSTRATION
A contracts to sell, and B contracts to buy, RM10,000 in the four per cent loan of the City
of Penang;
A contracts to sell, and B contracts to buy, 40 pikuls of coffee at RM30 per pikul;
In consideration of certain property having been transferred by A to B, B contracts to
open a credit in A’s favour to the extent of RM10,000, and to honour A’s drafts to that
amount:
The above contracts cannot be specifically enforced, for in the first and second both A
and B, and in the third A, would be reimbursed by compensation in money.

(b) a contract which runs into such minute or numerous details, or which is so
dependent on the personal qualifications or volition of the parties, or otherwise from its
nature is such, that the court cannot enforce specific performance of its material terms;
ILLUSTRATIONS
(a) A contracts to render personal service to B;
A contracts to employ B on personal service;
A, an author, contracts with B, a publisher, to complete a literary work;
B cannot enforce specific performance of these contracts.
(b) A contracts to buy B’s business at the amount of a valuation to be made by two
valuers, one to be named by A and the other by B. A and B each name a valuer, but
before the valuation is made A instructs his valuer not to proceed;
By a charter-party entered into in Telok Anson between A, the owner of a ship, and B,
the charterer, it is agreed that the ship shall proceed to Rangoon, and there load a cargo
of rice, and thence proceed to London, freight to be paid, one-third on arrival at
Rangoon, and two-thirds on delivery of the cargo in London;
A lets land to B, and B contracts to cultivate it in a particular manner for three years next
after the date of the lease;
A and B contract that, in consideration of annual advances to be made by A, B will, for
three years next after the date of the contract, grow particular crops on the land in his
possession and deliver them to A when cut and ready for delivery;
A contracts with B that, in consideration of RM1,000 to be paid to him by B, he will paint
a picture for B;
A contracts with B to execute certain works which the court cannot superintend;
A contracts to supply B with all the goods of a certain class which B may require;
A contracts with B to take from B a lease of a certain house for a specified term, at a
specified rent, “if the drawing-room is handsomely decorated,” even if it is held to have
so much certainty that compensation can be recovered for its breach;
A contracts to marry B:
The above contracts cannot be specifically enforced.

(c) a contract the terms of which the court cannot find with reasonable certainty;
ILLUSTRATION
A, the owner of a refreshment-room, contracts with B to give him accommodation there
for the sale of his goods and to furnish him with the necessary appliances. A refuses to
perform his contract. The case is one for compensation and not for specific
performance, the amount and nature of the accommodation and appliances being
undefined.

(d) a contract which is in its nature revocable;

ILLUSTRATION
A and B contract to become partners in a certain business, the contract not specifying
the duration of the proposed partnership. This contract cannot be specifically
performed, for, if it were so performed, either A or B might at once dissolve the
partnership.

(e) a contract made by trustees either in excess of their powers or in breach of their
trust;
ILLUSTRATIONS
(a) A is a trustee of land with power to lease it for seven years. He enters into a contract
with B to grant a lease of the land for seven years, with a covenant to renew the lease at
the expiry of the term. This contract cannot be specifically enforced.
(b) The directors of a company have power to sell the concern with the sanction of a
general meeting of the shareholders. They contract to sell it without any such sanction.
This contract cannot be specifically enforced.
(c) Two trustees, A and B, empowered to sell trust property worth RM10,000, contract to
sell it to C for RM3,000. The contract is so disadvantageous as to be a breach of trust. C
cannot enforce its specific performance.
(d) The promoters of a company for working mines contract that the company, when
formed, shall purchase certain mineral property. They take no proper precautions to
ascertain the value of the property, and in fact agree to pay an extravagant price
therefor. They also stipulate that the vendors shall give them a bonus out of the
purchase-money. This contract cannot be specifically enforced.

(f) 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;
ILLUSTRATION
A company existing for the sole purpose of making and working a railway contracts for
the purchase of a piece of land for the purpose of erecting a cotton-mill thereon. This
contract cannot be specifically enforced.

(g) a contract the performance of which involves the performance of a continuous duty
extending over a longer period than three years from its date; and
ILLUSTRATION
A contracts to let for twenty-one years to B the right to use such part of a certain railway
made by A as was upon B’s land, and that B should have a right of running carriages over
the whole line on certain terms, and might require A to supply the necessary engine-
power, and that A should during the term keep the whole railway in good repair. Specific
performance of this contract must be refused to B.

(h) 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.
ILLUSTRATION
A contracts to pay an annuity to B for the lives of C and D. It turns out that, at the date of
the contract, C, though supposed by A and B to be alive, was dead. The contract cannot
be specifically performed.
(2) Save as provided by the law relating to civil procedure, no contract to refer a
controversy to arbitration shall be specifically enforced.
Injunction
It is a court order exercising inherent equitable jurisdiction directing the defendant NOT
to do a certain act or restraining the defendant from doing a certain act.
Direct contrast to specific performance because the latter compels while the former
prohibits/restrains.

Requirements
1. damages not adequate
2. plaintiff must have interest to protect
3. there is danger that unless restrained, the breach would continue

S 50 Specific Relief Act 1950 - Preventive relief is granted at the discretion of the court
by injunction, temporary or perpetual.
Temporary and perpetual injunctions
S 51. (1) Temporary injunctions are such as are to continue until a specified time, or until
the further order of the court. They may be granted at any period of a suit, and are
regulated by the law relating to civil procedure.
(2) A perpetual injunction can only be granted by the decree made at 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 plaintiff.
Perpetual injunctions when granted
52. (1) Subject to the other provisions contained in, or referred to by, this Chapter, a
perpetual injunction may be granted to prevent the breach of an obligation existing in
favour of the applicant, whether expressly or by implication.
(2) When such an obligation arises from contract, the court shall be guided by the rules
and provisions contained in Chapter II.
(3) When the defendant invades or threatens to invade the plaintiff’s right to, or
enjoyment of, property, the court may grant a perpetual injunction in the following
cases, namely:
(a) where the defendant is trustee of the property for the plaintiff;
(b) where there exists no standard for ascertaining the actual damage caused, or likely to
be caused, by the invasion;
(c) where the invasion is such that pecuniary compensation would not afford adequate
relief;
(d) where it is probable that pecuniary compensation cannot be got for the invasion; and
(e) where the injunction is necessary to prevent a multiplicity of judicial proceedings.
Explanation—For the purpose of this section a trade-mark is property.
ILLUSTRATIONS
(a) A lets certain land to B, and B contracts not to dig sand or gravel thereout. A may sue
for an injunction to restrain B from digging in violation of his contract.
(b) A trustee, threatens a breach of trust. His co-trustees, if any, should, and the
beneficial owners may, sue for an injunction to prevent the breach.
(c) The directors of a public company are about to pay a dividend out of capital or
borrowed money. Any of the shareholders may sue for an injunction to restrain them.
(d) The directors of a fire and life insurance company are about to engage in marine
insurances. Any of the shareholders may sue for an injunction to restrain them.
(e) A, an executor, through misconduct or insolvency, is bringing the property of the
deceased into danger. The court may grant an injunction to restrain him from getting in
the assets.
(f) A, a trustee for B, is about to make an imprudent sale of a small part of the trust-
property. B may sue for an injunction to restrain the sale, even though compensation in
money would have afforded him adequate relief.
(g) A makes a settlement (not founded on marriage or other valuable consideration) of
an estate on B and his children. A then contracts to sell the estate to C. B or any of his
children may sue for an injunction to restrain the sale.
(h) In the course of A’s employment as a solicitor, certain papers belonging to his client,
B, come into his possession. A threatens to make these papers public, or to
communicate their contents to a stranger. B may sue for an injunction to restrain A from
so doing.
(i) A is B’s medical adviser. He demands money of B which B declines to pay. A then
threatens to make known the effect of B’s communications to him as a patient. This is
contrary to A’s duty, and B may sue for an injunction to restrain him from so doing.
(j) A, the owner of two adjoining houses, lets one to B and afterwards lets the other to
C. A and C begin to make such alterations in the house let to C as will prevent the
comfortable enjoyment of the house let to B. B may sue for an injunction to restrain
them from so doing.
(k) A lets certain arable lands to B for purposes of husbandry, but without any express
contract as to the mode of cultivation. Contrary to the mode of cultivation customary in
the district, B threatens to sow the lands with seed injurious thereto and requiring many
years to eradicate. A may sue for an injunction to restrain B from sowing the lands in
contravention of his implied contract to use them in a husbandlike manner.
(l) A, B, and C are partners, the partnership being determinable at will. A threatens to do
an act tending to the destruction of the partnership-property. B and C may, without
seeking a dissolution of the partnership, sue for an injunction to restrain A from doing
the act.
(m) A, the owner of certain houses in Kelang, becomes insolvent. B buys them from the
Official Receiver of A’s estate and enters into possession. A persists in trespassing on and
damaging the houses, and B is thereby compelled, at considerable expense, to employ
men to protect the possession. B may sue for an injunction to restrain further acts of
trespass.
(n) A, in an administration-suit to which a creditor, B, is not a party, obtains a decree for
the administration of C’s assets, B proceeds against C’s estate for his debt. A may sue for
an injunction to restrain B.
(o) A and B are in possession of contiguous lands and of the mines underneath them. A
works his mine so as to extend under B’s mine and threatens to remove certain pillars
which help to support B’s mine. B may sue for an injunction to restrain him from so
doing.
(p) A rings bells or makes some other unnecessary noise so near a house as to interfere
materially and unreasonably with the physical comfort of the occupier, B. B may sue for
an injunction restraining A from making the noise.
(q) A pollutes the air with smoke so as to interfere materially with the physical comfort
of B and C, who carry on business in a neighbouring house. B and C may sue for an
injunction to restrain the pollution.
(r) A infringes B’s patent. If the court is satisfied that the patent is valid and has been
infringed, B may obtain an injunction to restrain the infringement.
(s) A pirates B’s copyright. B may obtain an injunction to restrain the piracy, unless the
work of which copyright is claimed is libellous or obscene.
(t) A improperly uses the trade mark of B. B may obtain an injunction to restrain the
user, provided that B’s use of the trade mark is honest.
(u) A, a tradesman, holds out B as his partner against the wish and without the authority
of B. B may sue for an injunction to restrain A from so doing.
(v) A, a very eminent man, writes letters on family topics to B. After the death of A and
B, C, who is B’s residuary legatee, proposes to make money by publishing A’s letters. D,
who is A’s executor, has a property in the letters, and may sue for an injunction to
restrain C from publishing them.
(w) A carries on a manufactory and B is his assistant. In the course of his business, A
imparts to B a secret process of value, B afterwards demands money of A, threatening,
in case of refusal, to disclose the process to C, a rival manufacturer. A may sue for an
injunction to restrain B from disclosing the process.
Mandatory injunctions
53. When, to prevent the breach of an obligation, it is necessary to compel the
performance of certain acts which the court is capable of enforcing, the court may in its
discretion grant an injunction to prevent the breach complained of, and also to compel
performance of the requisite acts.
ILLUSTRATIONS
(a) A, by new buildings, obstructs lights to the access and use of which B has acquired a
right by prescription. B may obtain an injunction, not only to restrain A from going on
with the buildings, but also to pull down so much of them as obstructs B’s lights.
(b) A builds a house with eaves projecting over B’s land. B may sue for an injunction to
pull down so much of the eaves as so project.
(c) In the case put as illustration (i) to section 52, the court may also order all written
communications made by B, as patient, to A, as medical adviser, to be destroyed.
(d) In the case put as illustration (v) to section 52 the court may also order A’s letters to
be destroyed.
(e) A threatens to publish statements concerning B which would be punishable under
Chapter XXI of the Penal Code [Act 574]. The court may grant an injunction to restrain
the publication, even though it may be shown not to be injurious to B’s property.
(f) A, being B’s medical adviser, threatens to publish B’s written communications with
him, showing that B has led an immoral life. B may obtain an injunction to restrain the
publication.
(g) In the cases put as illustrations (s) and (t) to section 52, and as illustrations (e) and (f)
to this section, the court may also order the copies produced by piracy, and the trade
marks, statements, and communications, therein respectively mentioned, to be given up
or destroyed.
Injunction when refused
54. An injunction cannot be granted—
(a) to stay a judicial proceeding pending at the institution of the suit in which the
injunction is sought, unless such a restraint is necessary to prevent a multiplicity of
proceedings;
(b) to stay proceedings in a court not subordinate to thatfrom which the injunction is
sought;
(c) to restrain persons from applying to any legislative body;
(d) to interfere with the public duties of any department of any Government in Malaysia,
or with the sovereign acts of a foreign Government;
(e) to stay proceedings in any criminal matter;
(f) to prevent the breach of a contract the performance of which would not be
specifically enforced;
(g) to prevent, on the ground of nuisance, an act of which it is not reasonably clear that
it will be a nuisance;
(h) to prevent a continuing breach in which the applicant has acquiesced;
(i) when equally efficacious relief can certainly be obtainedby any other usual mode of
proceeding, except in case of breach of trust;
(j) when the conduct of the applicant or his agents has been such as to disentitle him to
the assistance of the court;
or
(k) where the applicant has no personal interest in the matter.
ILLUSTRATIONS
(a) A seeks an injunction to restrain his partner, B, from receiving the partnership-debts
and effects. It appears that A had improperly possessed himself of the books of the firm
and refused B access to them. The court will refuse the injunction.
(b) A manufactures and sells crucibles, designating them as “patent plumbago crucibles”
though, in fact, they have never been patented. B pirates the designation. A cannot
obtain an injunction to restrain the piracy.
(c) A sells an article called “Mexican Balm” stating that it is compounded of divers rare
essences, and has sovereign medicinal qualities. B commences to sell a similar article to
which he gives a name and description such as to lead people into the belief that they
are buying A’s Mexican Balm. A sues B for an injunction to restrain the sale. B shows that
A’s Mexican Balm consists of nothing but scented hog’s lard. A’s use of his description is
not an honest one and he cannot obtain an injunction.
Injunction to perform negative agreement
55. Notwithstanding paragraph 54(f), where a contract comprises an affirmative
agreement to do a certain act, coupled with a negative agreement, express or implied,
not to do a certain act, the circumstance that the court is unable to compel specific
performance of the affirmative agreement shall not preclude it from granting an
injunction to perform the negative agreement:
Provided that the applicant has not failed to perform the contract so far as it is binding
on him.
ILLUSTRATIONS
(a) A contracts to sell to B for RM1,000 the good-will of a certain business unconnected
with business premises, and further agrees not to carry on that business in Klang. B pays
A RM1,000 but A carries on the business in Klang. The court cannot compel A to send his
customers to B, but B may obtain an injunction restraining A from carrying on the
business in Klang.
(b) A contracts to sell to B the good-will of a business. A then sets up a similar business
close by B’s shop, and solicits his old customers to deal with him. This is contrary to his
implied contract, and B may obtain an injunction to restrain A from soliciting the
customers, and from doing any act whereby their good-will may be withdrawn from B.
(c) A contracts with B to sing for twelve months at B’s theatre and not to sing in public
elsewhere. B cannot obtain specific performance of the contract to sing, but he is
entitled to an injunction restraining A from singing at any other place of public
entertainment.
(d) B contracts with A that he will serve him faithfully for twelve months as a clerk. A is
not entitled to a decree for specific performance of this contract. But he is entitled to an
injunction restraining B from serving a rival house as clerk.
(e) A contracts with B that, in consideration of RM1,000 to be paid to him by B on a day
fixed, he will not set up a certain business within a specified distance. B fails to pay the
money. A cannot be restrained from carrying on the business within the specified
distance.

Pertama Cabaret Nite Club Sdn Bhd v Roman Tam [1981] 1 MLJ 149
It is true that generally speaking an injunction will be refused where money damages
will be adequate, and that usually damages only will be given instead of an injunction
where, But here the defendant is not a resident of this country, he has signed a
contract to sing for the plaintiffs on certain dates; as a professional singer he visits this
country but briefly, probably flitting in and out; and once he has departed it is likely
that he will not return for the pleasure of fighting a lawsuit. So it is unrealistic to
suppose that the plaintiffs will be sufficiently compensated by money damages alone,
for the truth is that they might not even get one cent. Failure by the courts to issue an
interim injunction will create a bad precedent for other international singers, who will
be able to contract to sing with one night club here and then blatantly flout it by
singing at another instead.
We might have been reluctant to restrain the defendant if he had been a resident of
and with assets in this country — for then it would have been realistic to suppose that
money damages might be enough to sooth the plaintiffs’ injured feeling.
Finally, it is to be observed that the defendant’s undertaking to sing is an affirmative
agreement which in the ordinary way the court will not compel him to perform, the
undertaking being dependent on his personal qualification and volition; but side by
side with this affirmative undertaking the defendant has also given a negative
undertaking not to sing anywhere else in Kuala Lumpur for a certain period: and under
s 55 illustration (c) of the Specific Relief Act, Act 137, the circumstance that the court is
unable to compel specific performance of the affirmative agreement does not
preclude the court from granting an injunction to compel performance of the negative
undertaking, if the plaintiff has not failed to perform the contract so far as it is binding
on him.

Mareva Injunction
An injunction granted to prevent a defendant from dissipating his assets/removing them
from the country in order to frustrate the plaintiff’s judgment.