Chapter 8 & 9 - Breach of Contract & Its Remedies

8/21/2019 Chapter 8 & 9 - Breach of Contract & Its Remedies

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GLUP1034/CONTRACT LAW II

PART 8 & 9 - BREACH OFCONTRACT & REMEDIES FOR

BREACH OF CONTRACT


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CONTENT:

A. BREACH OF CONTRACTS

Examples of brea! of o"#ra#s

Effe#s of brea! of o"#ra#s

Rel$ef %"&er se#$o"s 40 a"& '()

Co"#ra#s A#1*(0

Effe#s %"&er E"+l$s! la,


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-rea! of Co"#ra#

Breach of contract !appe"s ,!ere #!ere

$s a" a#%al fa$l%re b. a par#. #o #!e

o"#ra# #o perform !$s obl$+a#$o"s %"&er

#!e o"#ra# or a" $"&$a#$o" of !$s

$"#e"#$o" "o# #o &o so Oxfor& $#$o"ar. of La,) 4#! E&$#$o"2


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orms of -rea! a"& $#s effe#s

Breach of Condition brea! of a"$mpor#a"# #erm2 #!e la, perm$#s #!ePla$"#$ff #o #rea# !$mself as be$"+discharged $e rep%&$a#e #!e o"#ra#2from f%r#!er obl$+a#$o"s a"& la$mdamages

Breach of warranty brea! of a less

$mpor#a"# #erm2 #!e $""oe"# par#. !ereMAY NOT #rea# !$mself as be$"+discharged from !$s obl$+a#$o"s %"&er #!eo"#ra# $e ma. "o# rep%&$a#e #!e


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5o"#

5o"#ra#2 al#!o%+! !e ma. s%e a"&reo6er damages for "o"7performa"e of#!e s%bs$&$ar. #erm

Ching Yik Development Sdn Bhd vSetapak Heights Development Sdn Bhd81**'9 3 L; '


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=#a#%#or. pro6$s$o" of brea!

Section 40 of the Maa!sian ContractsAct "#$0 pro6$&es #!a# ,!e" a par#. #o a

o"#ra# !as ref%se& #o perform) &$sable&

!$mself from perform$"+) #!e prom$seema. p%# a" e"& #o #!e o"#ra# or #o

o"#$"%e ,$#! #!e o"#ra#

=ee Illustrations (a) (!) of s40 CA


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5o"#

Section %$ of the Maa!sian Contracts

Act "#$0 pro6$&es for o"se>%e"es of

res$ss$o" of 6o$&able o"#ra#.

Please refer


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Co"#e"#:7

B. REME&'ES FOR BREACH OF

CONTRACTS

ef$"$#$o"

T.pes of reme&$es a6a$lable&amages

()ant)m Mer)it

Reme&$es %"&er =pe$f$ Rel$ef A#s 1*(0=pe$f$ Performa"e

I"?%"#$o"s


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Reme&$es a6a$lable $" e6e"# of

-rea!

ama+es

Compe"sa#or. &ama+es

Nom$"al &ama+esP%"$#$6e &ama+es

Quantum Meruit

=pe$f$ performa"e

I"?%"#$o"


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ef$"$#$o"

A ega remed! 7 $s #!e mea"s ,$#! ,!$!

a CT of la,) e"fores a right* $mposes a

+enat!) or ma@es some o#!er CT order

#o $mpose $#s ,$ll

T!ere are se6eral reme&$es for brea! of

o"#ra#) s%! as damages, specific

performance, injunction, quantum meruita"& e#


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ama+es

T!e p%rpose of a,ar&$"+ &ama+es $s #o

ompe"sa#e #!e Pla$"#$ff for #!e loss

s%ffere& &%e #o #!e efe"&a"#s brea! of

o"#ra#

ama+es $s #!a# s)m of mone! ,!$! ,$ll

p%# #!e par#. ,!o !as bee" $"?%re& or ,!o

!as s%ffere&) $" #!e same pos$#$o" as $f #!eo"#ra# !a& bee" properl. performe&


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T.pes of ama+es

Compe"sa#or. ama+es

Nom$"al ama+es

P%"$#$6e &ama+es


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Compe"sa#or. ama+esABA

Or&$"ar. / Ge"eral ama+es2

Com+ensator! &amages o6er #!e

oss #!e "o"7brea!$"+ par#. $"%rre& as

res%l# of #!e brea! of o"#ra#

T!e amo%"# a,ar&e& $s $"#e"&e& #o ma@e

+oo& or replae #!e loss a%se& b. #!e

brea!


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5o"#

Compe"sa#or. &ama+es a" be &$6$&e&

$"#o:7‘General damages’ o6er #!e loss direct! ,

necessari! $"%rre& b. #!e brea!

‘Special damages’ o6er a". loss $"%rre& b.

#!e brea! of o"#ra# bea%se of s+ecia

circ)mstances - conditions #!a# are "o#or&$"ar$l. pre&$#able


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Nom$"al ama+es

ef$"$#$o" of "om$"al &ama+es aor&$"+

#o C!$##. o" Co"#ra#s:7

DW!e"e6er a par#. $s l$able for brea! of

o"#ra#) e$#!er express or $mpl$e&) #!e

Pla$"#$ff $s +e"erall. e"#$#le& #o "om$"al

&ama+es al#!o%+! "o a#%al &ama+e $s

pro6e& #!e 6$ola#$o" of a r$+!# a# ommo"la, ,$ll %s%all. e"#$#le #!e pla$"#$ff #o

"om$"al &ama+es ,$#!o%# proof of spe$al

&ama+eF


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CONT

Nomina damages $e a 6er. small s%m

of &ama+es

Nom$"al &ama+es are a,ar&e& ,!e")

e+ a pla$"#$ff ,!o !as s%e& for brea! of

o"#ra# !as s%ffere& "o loss

Nom$"al &ama+es are a,ar&e& merel. #o

a@"o,le&+e #!a# !$s r$+!#s !a6e bee"

brea!e&


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Nom$"al ama+es

I" 'nd)stria , Agric)t)ra &istri/)tion SdnBhd 1oden Sands Constr)ction Sdn Bhd

2"##3 3 M56 433) #!e Co%r# f%r#!er $ll%s#ra#e&

#!e $mpor#a"e of pro6$"+ &ama+es a"& s#a#e&

#!a# :“damages are not meant to !e punitive in

nature but rather compensatory …It is therefore

important for the plaintiff to establish his loss and

not, so much as hat the defendant had gained

from the breachF


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P%"$#$6e or Exemplar. ama+es

7)nitie &amages are a,ar&e& #o p%"$s! or

ma@e a" example of a ,ro"+&oer ,!o !as a#e&

,$llf%ll.) mal$$o%sl. or fra%&%le"#l.

U"l$@e ompe"sa#or. &ama+es #!a# are $"#e"&e&#o o6er a#%al loss) p%"$#$6e &ama+es are

$"#e"&e& #o p%"$s! #!e ,ro"+&oer P%"$#$6e

&ama+es are rarel. a,ar&e& for brea! of

o"#ra# T!e. ar$se more of#e" $" tort cases


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Pr$"$ples of la$m$"+ &ama+es 7

Ca%sa#$o"1 I" or&er #o reo6er &ama+es) #!e

Pla$"#$ff m%s# s!o, #!a# !$s osses 8ere

ca)sed /! the &efendant9s /reach.

s!o, causation2

e !as #o pro6e #!a# #!e oss 8as d)e to

the act or defa)t of the &efendant a"&

#!ere $s "o brea@ $" #!e !a$" of a%sa#$o"be#,ee" #!e efe"&a"#s brea! a"& #!e

Pla$"#$ffs losses


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Pr$"$ples of la$m$"+ &ama+es 7

Remo#e"ess of ama+esH Apar# from a%sa#$o") #!e Pla$"#$ff m%s# also

s!o, #!a# #!e osses he has s)ffered are not

remote in order to recoer them

Losses) #o be reo6erable) m%s# be ,$#!$" #!ereasona/e contem+ation !i"e reasonable

foreseeable# of #!e par#$es

I" E"+l$s! la,) #!e test of remoteness of

&ama+es ,as la$& &o," $" Hadley v Ba"endale

:";$4< # E= 34"


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a&le. 6 -axe"&ale 1(42 * Ex

341 A s!af# $" #!e pla$"#$ffs m$ll bro@e &o," a"& #!e pla$"#$ffs

!$re& #!e &efe"&a"# #o #ra"spor# #!e s!af# for repa$rs

T!e efe"&a"# &ela.e& $" re#%r"$"+ #!e s!af# a"& #!eefe"&a"# &$& "o# @"o, #!a# #!e pla$"#$ffs &$& "o# !a6e a

spare s!af#T!e Pla$"#$ffs s%e& for oss of +rofits as &ama+es

T!e CT !el&: T!e Pla$"#$ffs a#$o" fa$le& T!a# #!e osses8hich are too remote are not recoera/e

NOTE> T!e a#$o" ,as !ear& o" #!e bas$s #!a# #!e o"l.$"forma#$o" +$6e" #o #!e ef ,as #that the article to !ecarried was the !roken shaft of a mill that the$laintiffs were the millers of that mill%


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341Losses are NOT TOO REMOTE $f #!e. are:7

a2 ordinar! osses ,!$! ar$se "a#%rall. $" #!e%s%al o%rse of #!$"+s or

b2 e=traordinar! osses ,!$! ar$se ,$#!$" #!ereaso"able o"#empla#$o" of #!e par#$es a# #!e#$me #!e. e"#ere& $"#o #!e o"#ra#

ere) #!e loss of prof$#s &$& "o# fall %"&er #!e 1s#

l$mb as "ormall. m$lls ,o%l& !a6e spare s!af#


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341=$"e #!e efe"&a"# did not ?no8 #!a#

#!e Pla$"#$ffs &$& "o# !a6e spare s!af#) #!e

losses &$& "o# fall %"&er H"& l$mb

e"e) #!e losses are "o# reo6erable


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J$#or$a La%"&r. W$"&sor2 L#& 6 Ne,ma"

I"&%s#r$es L#& 81*4*9 H B- (H

T!e Co%r# f%r#!er expla$"e& #!e #es# of Hadley v

Ba"endale $" #!a#:

a2 #!e Pla$"#$ff a" al,a.s reo6er foreseeable

losses or &ama+es ,!$! ar$ses "a#%rall.b2 ,!a# $s reasona!le foresee!ility &epe"&s o"

#!e ?no8edge #!e" possesses b. #!e par#. $"

&efa%l#

2 @"o,le&+e $s actual or imputed knowledge


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5o"#

NOTE> T!e la, ,$ll $mp%#e #o e6er.

$"&$6$&%al) @"o,le&+e of #!e loss #!a# $s

l$able #o res%l# nat)ra! or in the ordinar!

co)rse of things from a brea! of o"#ra#W!e#!er or "o# #!e o"#ra# brea@er a#%all.

!as #!$s @"o,le&+e $s irreeant.

T!a# $s #o sa.) $mp%#e& @"o,le&+e rela#es #o#!e 1s# l$mb of Hadley v Ba"endale


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5o"#

NOTE: I" a&&$#$o" #o #!e $mp%#e& @"o,le&+e)#!e &efa%l#er ma. !a6e ?no8edge of s+ecia

circ)mstances ,!$! are outside ‘the normal

course of things’ K ,!$! ,$ll a&& or e"!a"e #!e&ama+e #!a# ma. be a%se& b. a brea! of

o"#ra# $e a#%al @"o,le&+e2

I# $s act)a ?no8edge of the s+ecia

circ)mstances #!a# a#$6a#es #!e H"& l$mb of

Hadley v Ba"endale


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Remo#e"ess of &ama+es $"

ala.s$aI" ala.s$a) Section @4 Contracts Act

"#$0 se#s o%# #!e o"se>%e"es of a brea!

of o"#ra#:

12 ,!e" a o"#ra# !as bee" bro@e") #!e

par#. ,!o s%ffers b. #!e brea! $s e"#$#le& #o

ree$6e) from #!e par#. ,!o !as bro@e" #!e

o"#ra#) com+ensation for an! oss ordamage a%se& #o !$m #!ereb.) ,!$!

"a#%rall. arose $" #!e %s%al o%rse of #!$"+s


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ala.s$afrom #!e brea!) or ,!$! #!e par#$es

@"e,) ,!e" #!e. ma&e #!e o"#ra#) #o be

l$@el. #o res%l# from #!e brea! of $#

H2 =%! ompe"sa#$o" $s "o# #o be +$6e"

for a". remote and indirect loss or

&ama+e s%s#a$"e& b. reaso" of #!e

brea!


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ala.s$aSection @4 of the Contracts Act "#$0

pro6$&es for #!e #es# for remo#e"ess of

&ama+es ,!$! $s s$m$lar #o #!e #es# $"

Hadley v Ba"endale : I" Dato &ohd 'nuar !in m!ong 'nor v Bank

Bumiputra (m) Sdn Bhd *++,- * &./

012 ta 0345031) =$#$ Norma aa@ob ;CAsa$& #!a# s


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5o"#

T!erefore) o"e $# $s s!o," #!a# #!e losses

o%l& fall %"&er #!e 1s# or H"& l$mb) #!e

efe"&a"# $s l$able #o #!e f%ll ex#e"# of $# so

lo"+ as #!e ex#e"# of &ama+es !as bee"s!o," o" #!e /aance of +ro/a/iities.


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$#$+a#$o" of ama+es

T!e &%#. #o m$#$+a#e $e m$"$m$se #!elosses2 o"l. omes abo%# ,!e" #!ere $s abrea! of o"#ra#

T!e e=+anation $" Section @4 CA "#$0 pro6$&es #!a#: DI" es#$ma#$"+ #!e loss or&ama+e ar$s$"+ from a brea! of o"#ra#)#!e mea"s #a@e" #o reme&. #!e$"o"6e"$e"e a%se& b. #!e "o"7performa"e of #!e o"#ra# m%s# be #a@e"$"#o ao%"#F


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Pr$"$ples of m$#$+a#$"+

T!e Pla$"#$ff m%s# #a@e reaso"able s#eps #om$#$+a#e !$s loss a"& m%s# "o# $"%r%"reaso"able expe"ses

W!a# #!$s mea"s $s #!a# #!e pla$"#$ff a""o#

reo6er a". par# of #!e &ama+es #!a# !eo%l& !a6e a6o$&e& b. #a@$"+ all reaso"ables#eps poss$ble $" #!e $r%ms#a"es


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T$m$"+ of Assessme"# of ama+es

As a +e"eral r%le) &ama+es s!o%l& beassesse& as a# #!e &a#e of brea!

I" ala.s$a) #!e Co%r# $" E?o/ina :M< Sdn

Bhd Mensa Mercantie :Far East< 7te5td 2"##4 " M56 $$3 !el& #!a#:

A2 #!e "ormal meas%re for &ama+es $s #!e

&$ffere"e be#,ee" #!e mar@e# pr$e of #!e+oo&s or proper#. as a# #!e &a#e of brea!a"& #!e o"#ra# pr$e

-2 $" appropr$a#e ases) losses a" be

assesse& as a# #!e &a#e of #r$al


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M%a"#%m er%$#

Quantum Meruit : ,!ere a pla$"#$ff s%es

for a" %"spe$f$e& amo%"# for ser6$es

re"&ere& la$m for reaso"able

rem%"era#$o"2

Quantum Meruit mea"s Das m%! as !e

a" ear"e&F


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Quantum Meruit ,!ere a6a$lable

T!e $r%ms#a"es $" ,!$! a quantum

meruit ma. be la$me& are as follo,s:

1 ,!e" #!ere $s a" express /$mpl$e&

a+reeme"# #o pro6$&e a ser6$e b%# "o

a+reeme"# as #o pr$e

Case: 'yer Hitam 7in Dredging

&alaysia Bhd v YC Chin nterprises

Sdn Bhd 81**49 H L;


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5o"#

H ,!ere #!e par#$es !a6e "o# performe&

#!e #erms of #!e$r o"#ra# b%# a "e,

o"#ra# a" be $"ferre& from #!e$r o"&%#

#o !a6e replae& #!e or$+$"al) a quantummeruit a,ar& ma. be a6a$lable for #!e

6al%e of #!e ,or@ &o"e %"&er #!e "e,

$mpl$e& o"#ra#Case: Smith Construction Co .td v $hit

8irivatna (f) 81*((9 L; ) C


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5o"#

3 ,!ere a o"#ra# $s #erm$"a#e& b.

brea! af#er o"e par#. !as performe& !$s

obl$+a#$o"s) #!e par#. "o# $" &efa%l# ma.

ele# #o aep# #!e brea! K s%e o"quantum meruit for #!e 6al%e of ,or@

&o"e

Case: De Bernady v Harding 1(32 Ex HH 11 ER 1('


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5o"#

4 A quantum meruit $s also a6a$lable #o a

a pr#. ,!o $s pre6e"#e& from omple#$"+

!$s obl$+a#$o"s b. #!e o#!er par#.

Case: Ban Hong /oo &ines .td v Chen

Yap 81*'*9 H L; 3) C


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Reme&$es %"&er =pe$f$ Rel$ef A#s 1*(0

=pe$f$ Performa"e K I"?%"#$o" are forms of

,!a# $s #erme& as spe$f$ rel$ef

=pe$f$ rel$ef $s embo&$e& $" a s#a#%#e =pe$f$

Rel$ef A# 1*(0 K s4 of #!e A# pro6$&es:=pe$f$ rel$ef $s +$6e"

a2 b. #a@$"+ possess$o" of er#a$" proper#. K

&el$6er$"+ $# #o a la$ma"#

b2 b. or&er$"+ a par#. #o &o #!e 6er. a# ,!$! !e

$s %"&er a" obl$+a#$o" #o &o


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5o"#

2 b. pre6e"#$"+ a par#. from &o$"+ #!a#

,!$! !e $s %"&er a" obl$+a#$o" "o# #o &o

&2 b. &e#erm$"$"+ K &elar$"+ #!e r$+!#s of

par#$es o#!er,$se #!a" b. a" a,ar& ofompe"sa#$o" or

e2 b. appo$"#$"+ a ree$6er

S.4:/


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=pe$f$ Performa"e

S7 $s a" &eree/or&er of CT re>%$r$"+ a

par#. #o perform $" #erms #!e 6er.

obl$+a#$o"s !e %"&er#oo@ #o &$s!ar+e o"

e"#er$"+ $"#o #!e o"#ra#

T!e p%rpose $s #o p%# #!e par#$es $" #!e

pos$#$o") $" ,!$! #!e &%e performa"e of

#!e$r obl$+a#$o"s ,o%l& !a6e plae& #!em


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=pe$f$ Performa"e ,!ere

a6a$lable

As a" e>%$#able reme&.) =P $s a6a$lable

o"l. ,!e" #!e ommo" la, or a s#a#%#e

&oes "o# pro6$&e a" a&e>%a#e reme&.

Ge"erall.) =pe$f$ performa"e $s

a6a$lable $" #!e follo,$"+ $r%ms#a"es:7

a2 ,!ere #!e o"#ra# brea!e& $s for #!e

sale K p%r!ase of la"&


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5o"#

b2 $f #!e s%b?e# ma##er of #!e o"#ra# $s rare

or %"$>%e2 #!e reaso"$"+ $s #!a# &ama+es

are "o# a" a&e>%a#e reme&. bea%se #!e.

,$ll "o# plae #!e $""oe"# par#. $" pos$#$o"!e ,o%l& !a6e bee" $" b%# for #!e brea!

2 exep#$o"al $r%ms#a"es ,!ere

&ama+es ,o%l& "o# be a&e>%a#e reme&. 9Beswick v Beswick 81*'9 AC (


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I"?%"#$o"

'n)nction > are form of ,!a# $s #erm as spe$f$

rel$ef K $# $s embo&$e& $" section 4:c< of the

S+ecific Reief Act "#$0

s.4: =pe$f$ rel$ef $s +$6e" !c# b$ pre%enting a part$ from doing that hich he is under an

obligation not to do

An in)nction $s a" or&er of CT #o pro!$b$#

#!rea#e"e& / o"#$"%$"+ $lle+al o"&%# of er#a$"

@$"&s


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5o"#

I# $s a,ar&e& $" $r%ms#a"es ,!ere

&ama+es ,o%l& "o# be a" a&e>%a#e reme&.

#o ompe"sa#e #!e la$ma"# bea%se #!e

la$ma"# "ee&s #o res#ra$"# #!e &efe"&a"#from s#ar#$"+ or o"#$"%$"+ a brea! of a

"e+a#$6e o"#ra#%al %"&er#a@$"+

(prohi!itory in:unction) or "ee&s #o ompelperforma"e of a pos$#$6e o"#ra#%al

obl$+a#$o" (mandatory in:unction)6


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o"#

T!e o"&$#$o" pree&e"# for #!e +ra"# of a"

$"?%"#$o" are:

a2 #!e pla$"#$ff m%s# !a6e a" $"#eres# #o

pro#e#b2 &ama+es m%s# be s!o," "o# #o be a"

a&e>%a#e reme&.

2 #!ere $s &a"+er #!a# %"less res#ra$"e&) #!e&efe"&a"# ,$ll brea! #!e o"#ra# / o"#$"%e

,$#! #!e brea! ompla$"e& of


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Documents

Chapter 8 & 9 - Breach of Contract & Its Remedies