LW_311-Business_Law-Chap6.ppt

8/10/2019 LW_311-Business_Law-Chap6.ppt

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Business Law Oxford Fajar Sdn. Bhd. (008974-T) 2010 Ch6: 1

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CHAPTER 6The Law of Contract


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Business Law Oxford Fajar Sdn. Bhd. (008974-T) 2010 Ch6: 3 All Rights Reserved

OBJECTIVES

This chapter:describes the basic principles of the lawgoverning contracts


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PREVIEW

Introduction Elements of a Contract

Privity of Contract Terms of a Contract Voidable Contracts Void and Illegal Contracts Restraint of Trade and Legal Proceedings Discharge by Frustration, Performance and Breach Remedies


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INTRODUCTION

compare contract with agreement: contract involves an element of agreement but

not every agreement will result in a contractrecognizable by law

contract is an agreement enforceable by law contract is an agreement which is legally binding

between them parties

Malaysian legislation Contracts Act 1950


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INTRODUCTION (cont.)

where there are no provisions in Contracts Act 1950 English law applies by virtue ofthe Civil Law Act 1956where the Contracts Act makes certainprovisions which differ from English law, theprovisions of the Contracts Act 1950 mustprevail see Song Bok Yoong v Ho Kim Poui


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ELEMENTS OF A CONTRACT

1. Offer (Proposal)section 2(a), Contracts Act 1950 when oneperson signifies to another his willingness to door to abstain from doing anything, with a view toobtaining the assent of that other to the act orabstinence, he is said to make a proposal the promisor (offeror) must have declared his

readiness to undertake an obligation uponcertain terms, leaving the option of itsacceptance or refusal to the offeree. See AffinCredit (Malaysia) Sdn Bhd v Yap Yuen Fui


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ELEMENTS OF A CONTRACT(cont.)

the communication of a proposal is completewhen it comes to the knowledge of the personto whom it is made section 4(1)of theContracts Act 1950compare offer with option and advertisement is complete when it comes to the knowledge ofthe person to whom it is made section 4(1)ofthe Contracts Act 1950compare offer with option and advertisement


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option undertaking to keep the offer open for acertain period of time

option arises when the offeror promises to keepthe offer open for a specified period. SeeGoldsborough Mort & Co Ltd v Quinn, Coelho vThe Public Services Commission, M N GuhaMajumder v Re Donough

whether an advertisement is an offer or aninvitation to treat depends on the intention of theparties in each case


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advertisements of bilateral contracts are notoffers whereas advertisements of unilateralcontracts are construed to be offers. SeeMajumder v Attorney-General of Sarawak,Pharmaceutical Society Of Great Britain v BootsCash Chemist Ltd, Partridge v Crittenden, Rookev Dawson, Grainger & Sons v Gough

if a party intends their words or conduct toconstitute and offer, the court will construe assuch. See Carlill v Carbolic Smoke Ball Co. Ltd


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offer must be distinguished from invitations totreat, e.g.:

auctions

advertisement of tenders catalogues price lists goods displayed in shop windows and shelves

the advertisement of an auction is not an offer tohold it but an invitation to treat. See Harrison v Nickerson


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2. Acceptancewhen the person to whom the proposal ismade signifies his assent thereto, the proposal

is said to have been accepted section 2(b)ofthe Contracts Act 1950when a proposal is accepted, it becomes apromise

the person accepting the proposal thepromisee if the acceptance is made in words expressed acceptance


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if the acceptance is made other than in words implied acceptancefor a proposal to be converted into a promise, theacceptance of that proposal must be absolute andunqualified section 7 of said Actacceptance must be absolute and unqualified sothat there is complete consensus. If the partiesare still negotiating, an agreement is not yetformed.a conditional assent is not an acceptance


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if acceptance is qualified by words such as subjectto contract or subject to a formal contract beingdrawn up by our solicitors, the courts would beinclined to regard it as a mere conditional contractthe mere use of the words subject to contract doesnot necessarily mean that the contract is not yetbinding. Whether the parties contemplated a bindingcontract to take immediate effect or whether theywere postponing their rights and obligations underthe proposed contract until formalization is aquestion of fact and depends on the circumstancesof each case


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in Ayer Hitam Tin Dredging Malaysia Bhd v YCChin Enterprises Sdn Bhd:1. The existence of an agreement depends upon the

intention of the parties who must be ad idem. It may beinferred from the language used, the parties conducthaving regard to the surrounding circumstances and theobject of the contract. The court will generally apply anobjective or reasonable man test.

2. Merely because the parties contemplate the preparationof a formal contract, that would not prevent a bindingcontract from coming into existence before the formalcontract is signed.


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although the formula subject to contract gives riseto a strong presumption of the necessity of afurther formal contract, it does not detract from the

well-established principles that:1. An informal contract without any express details may bebinding

2. A bargain with essential terms, though a formal document is tobe drawn up with further terms, is still a bargain

3. Where there is a definite and complete agreement, thereservation in respect of a formal document only means that itshould be put into proper shape and in legal phraseology withany subsidiary terms necessary for insertion in a formaldocument


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acceptance which is qualified by theintroduction of a new term may be consideredas a counter-offer destroying the original offer.

See Hyde v Wrench acceptance must be made within a reasonabletime. See Fraser v Everett

reasonable time depends on thecircumstances of each case, e.g. the nature ofthe subject-matter or the method by which theoffer is communicated


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an offer is normally short-lived in the case ofperishable goods, whereas in the case of land,provided that there is nothing in the offer to

indicate a degree of urgency, the offer remainsopen for a longer time. See Ramsgate VictoriaHotel Co Ltd v Montefiore

the rationale for this rule is given by Hashim

Yeop A Sani J in the case of Macon Works &Trading Sdn Bhd v Phang Hon Chin & Anor


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acceptance must be expressed in some usualand reasonable manner, unless the proposerprescribes the manner in which it is to be

accepted. The proposer cannot prescribesilence as a manner of acceptance section7(b) of the Contracts Act 1950

however, silence may also amount to

acceptance if there are other facts like theconduct of the offeror to indicate acceptance.See Weatherby v Banham


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thus, acceptance must be made in the mannerprescribed by the offeror. When the acceptordeviates from the prescribed manner, the offerormust not keep silent. If he does so and fails to insistupon the prescribed manner, he is considered ashaving accepted the acceptance in the modifiedmanner section 7(b) the acceptance of proposals is deemed to be madeby any act or omission of the party accepting bywhich he intends to communicate the acceptanceor which has the effect of communicating it section 3


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the communication of an acceptance is complete asagainst the proposer when it is put in a course oftransmission to him so as to be out of the power of theacceptorwith respect to the acceptor, the communication of anacceptance is complete as against the acceptor when itcomes to the knowledge of the proposerwhen the acceptance does not reach the proposer,

there can still be an agreement because the offeror,though having no knowledge of the acceptance, isbound whilst the acceptor, because his acceptance hadnot come to the knowledge of the proposer, is notbound. See Ignatius v Bell


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in cases of acceptance through post, acceptance iscomplete upon postinghowever, this rule that acceptance is complete uponposting may be excluded by the express terms of theoffer Holiwell Securities Ltd v Hughesthe mere posting of the letter of acceptance was notsufficientexception to the aforesaid rule as regards acceptancethrough the post lies in cases of instantaneouscircumstances, e.g. telephone, telex and telefax seeEntores Ltd v Miles Far East Corporation, TenaxSteamship Ltd v The Brimmes


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Revo cat ion of Offer and A cceptance

a proposal may be withdrawn in any of thefollowing ways:1.Communicating the notice of revocation by the

proposer to the party to whom the proposal wasmade

2.The time prescribed in the proposal for itsacceptance elapses, or if no time is prescribed foracceptance by the lapse of a reasonable time

3.The failure of the acceptor to fulfil a conditionprecedent to a acceptance


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4. The death or mental disorder of the proposer if thefact of the proposers death or mental disordercomes to the knowledge of the acceptor beforeacceptance

when acceptance is complete, an agreement isformed so that there is no question of revocationrevocation is possible if the acceptance is notcomplete

revocation of an offer must be communicated to beeffective section 6(a)


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the communication of revocation section 4(3)section 4(2) the communication of anacceptance is complete:1. As against the proposer, when it is put in a course of

transmission to him, so as to be out of the power ofthe acceptor

2. As against the acceptor, when it comes to the

knowledge of the proposer


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the communication of a revocation is alsocomplete at 2 different times:

1. As against the person who makes the revocation,when it is put in the course of transmission to theperson to whom it is made, so as to be out of thepower of the person who makes it section 4(3)(a)

2. As against the person to whom it is made, only whenit comes to his knowledge section 4(3)(b)


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a proposal may be revoked at any time beforethe communication of its acceptance iscomplete as against the proposer, but notafterwards section 5(1)an acceptance may be revoked at any timebefore the communication of the acceptance is

complete as against the acceptor, but notafterwards section 5(2)


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3. Intention to Create Legal Relations there are cases where there were no intention toenter into legal relations

where the agreements merely represent familyarrangements

where concessions were made in the course ofbusiness negotiations

circumstances and conduct of parties may alsoindicate lack of intentionin domestic arrangements presumption against theexistence of an intention to create legal relations


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in commercial arrangements presumption isthat legal relationships are intended it is up to the courts to ascertain the intentions of

the parties from the language used and thecontext in which they are used

4. Considerationas a general rule, an agreement withoutconsideration is void section 26, Contracts Actdefinition of consideration see section 2(d),Contracts Act


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Cons iderat ion Need Not be Ad equate an agreement is not void merely because theconsideration is inadequate Explanation 2,section 26for the application of the rule see Illustration(f) section 26adequacy of consideration see Chappell &Co Ltd v Nestl Co. Ltd, Phang Swee Kim v Beh I Hock


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Provis ion o f Cons iderat ion consideration may move from a person who isnot the promisee. It may move from thepromisee or any other person section 2(d)

Past Cons iderat ion i s Goo d Con siderat ionEnglish law does not recognize pastconsideration


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exceptions to this rule an act originally done at therequest of the promisor, a promise made subsequentto the doing of that act, was deemed binding sincethe act constituted consideration. See Lampleigh v Brathwaitdefinition of the word consideration in section 2(d)appears extensive enough to cover theaforementioned rule

an agreement made without consideration is voidunless it is a promise to compensate a person whohas already voluntarily done something for thepromisor section 26(b)


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Natura l Lov e and Affec t ion i s Val idConsidera t ion

English law does not recognize natural love andaffection as valid considerationnatural love and affection are valid considerationif certain prerequisites are complied with Contracts Act 1950 in Malaysia


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an agreement made on account of natural loveand affection would be held to be binding inMalaysia if the requirements of section 26(a)

are present: 1. It is expressed in writing2. It is registered (if applicable)3. The parties stand in a near relation to each

other


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Ac cord and Sat i s fac t ion Par t Paym ent m ayDischarge an Ob l igation

English law ( Pinnels Case) general rule thatpayment of a smaller sum is not a satisfaction of anobligation to pay a large sum this does not applyin Malaysiaexceptions to the rule [T]he gift of a horse, hawk,

or robe ... in satisfaction is good. For it shall beintended that a horse, hawk, or robe ... might bemore beneficial ... than the money ... .


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section 64 is wide enough to cover all theexceptions to the general rule under English law.Indeed, it goes further to provide that the promisee

may do away with the promise completely seeIllustration (b) of section 64

Cons iderat ion Need Not Mov e f rom the Prom isee a party to an agreement can enforce the promiseeven if he himself has no given no consideration aslong as somebody else has done so section 2(d)see Venkata Chinnaya v Verikatara Maya


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5. Certainty an agreement which is uncertain or is not capableof being made certain is void. See KaruppanChetty v Suah Thian

6. Capacityrefers to the ability of the parties to a contract tofully understand its terms and obligationsevery person is competent to contract who is ofthe age of majority according to the law to whichhe is subject, and who is of sound mind, and is notdisqualified from contracting by any law to whichhe is subject section 11


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the age of majority is eighteen years Age of Majority Act 1971exceptions to the rule that contracts by minors

are void:1. Contracts for necessaries2. Contracts of scholarship3. Contracts of insurance

necessaries are things which are essential tothe existence and reasonable comfort of theinfant, e.g. food and clothing, shelter, andeducation


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a scholarship agreement is valid ifgranted by the Federal or StateGovernment

anyone between the age of ten andsixteen may enter into a contract ofinsurance with written consent of hisparents/guardian


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PRIVITY OF CONTRACT

only the persons who are parties to thecontract can acquire rights and incur liabilitiesunder it. See Andrew Christopher ChuahChoong Eng Chuan case

obligations under a contract generally cannotbe transferred unless all the parties consent

equity, and in limited cases, the law permits an

assignment of rightscontract requiring performance of personalservice is not assignable


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TERMS OF A CONTRACT

terms may be expressed or impliedterms may be classified as:1. Condition vital to the contract. The parties consider it so

important that its non-performance may be considered bythe injured party as amounting to substantial failure tohonour the contract at all and thus may be regarded asgrounds for setting the contract aside, and or suing fordamages

2. Warranty considered to be of lesser importance to themain purpose of the contract. If it is breached, the injuredparty must still perform their part of the contract but theyhave the right to sue for damages for any loss that theymay suffer as a result of the breach


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TERMS OF A CONTRACT (cont.)

the 5 conditions for a term to be implied into acontract it must be:1. Reasonable and equitable

2. Necessary to give business efficacy to thecontract, so that no term will be implied if thecontract is effective without it

3. So obvious that it does without saying 4. Capable of clear expression5. Not in contradiction of any express term of the

contract


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terms may be implied by:1. Custom and usage pertaining to a particular type of

transaction2. Statutory provisions3. The courts, based on the intention of the parties

where there is no express provision to the contraryin a contract, and the trade custom or usage reliedon is so well-known that everyone in that businessmaking a contract would be assumed to haveincluded it as a term into the contract, then it maybe implied by the courts


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statutes that imply terms into a contract Sale of Goods Act 1957, Hire-Purchase Act1967, National Land Code 1965

normally, the courts will imply terms into acontract:1. To give efficacy to the transaction see The

Moorcock

2. By applying the officious bystander test or what iscommonly known as the Oh, of course! test seeReigate v Union Manufacturing Co Ltd, Shirlaw v Southern Foundries (1926) Ltd


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terms may also be imported from a previouscourse of dealing between the parties to thecontract see Popular Industries Limited v Eastern Garment Manufacturing Sdn Bhd

Conditions and Warrantieswhether a particular term in a contract is acondition or a warranty depends on the intention of

the partiesthe courts will have to determine the exactintention of parties. See Associated Metal Smelters Ltd v Tham Cheow Toh


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Standard Contracts and Exemption Clausesprovisions limiting (as distinguished from exempting)liability have been held to be valid. See Chartered

Bank of India, Australia and China v British IndiaSteam Navigation Co Ltd, Sze Hai Tong Bank Ltd v Rambler Cycle Co Ltd

the effectiveness of an exclusion clause is a matter

of construction


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if the exclusion clause is properly incorporated, thereare 3 possibilities for ones approach to interpretation:1.The contra proferentum rule see White v John Warwick &

Co Ltd2.The four corners rule see The Council of the City of

Sydney v West3. Interpretation according to the express agreement see

Photo Production Ltd v Securicor Transport Ltd

however, the presumption of equality of bargainingpositions in commercial contracts is a rule ofconstruction based on the presumed intention of thecontracting parties in each case


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VOIDABLE CONTRACTS

all agreements are contracts if they are made by thefree consent of parties section 10, Contracts Actaccording to section 14, consent is said to be freewhen it is not caused by:1. Coercion2. Undue influence3. Frauda party to a contract, whose consent was caused

by fraud or misrepresentation, may, if he thinks fit,insist that the contract shall be performed, and that heshall be put in the position in which he would havebeen if the representation made had been true section 19

4. Misrepresentation5. Mistake


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VOIDABLE CONTRACTS (cont.)

1. Coercionis defined in section 15, Contracts Act 1950 see Kanhaya Lal v National Bank of India, Ltd,

Kesarmal s/o Letchman Das v Valiappa Chettiar, Allied Granite Marble Industries Sdn Bhd v ChinFoong Holdings Sdn Bhd & Ors

2. Undue Influence is defined in section 16, Contracts Act 19503 matters to be dealt with under section 16(3)are:


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The relations between the parties to each other must be suchthat one is in a position to dominate the will of the other

The issue whether the contract has been induced by undueinfluence

The burden of proving that the contract was not inducedby undue influence lies upon the person who was in aposition to dominate the will of the other

3. Fraud

is defined in section 17, Contracts Act 1950wherever a person causes another to act on a falserepresentation which the maker himself does not believe tobe true, he is said to have committed a fraud


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4. Misrepresentationis defined in section 18, Contracts Act 1950see Tan Chye Chew & Anor v Eastern Mining & MetalCo., Malayan Miners Co (M) Ltd v Lian Hock & Co,

Maria Chia Sook Lan v Bank of China 5. Mistake

cases where there is a mistake of fact see section 21,Contracts Act 1950

section 22 provides for cases where there is a mistakeas to lawa contract is not voidable merely because it was causedby one of the parties to it being under a mistake as to amatter of fact section 23


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VOID AND ILLEGALCONTRACTS

a void contract is an agreement not enforceable by law section 2(g)according to section 24, the consideration or object of anagreement is lawful unless:a) it is forbidden by a lawb) it is of such a nature that, if permitted, it would defeat any

lawc) it is fraudulentd) it involves or implies injury to the person or property of

anothere) the court regards it as immoral, or opposed to public policy

agreements are void if any part of their considerations andobjects are unlawful section 25


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VOID AND ILLEGALCONTRACTS (cont.)

4. An agreement in restraint of legal proceedings exceptfor a contract agreeing to refer disputes to arbitration ora contract relating to scholarships section 29

5. An agreement, the meaning of which is not certain, orcapable of being made certain section 30

6. An agreement by way of wager section 31

Con sequ ences of Void or Il legal A greem entsthe courts will not enforce an illegal contract ex turpicausa non oriturright of restitution section 66see Menaka v Lum Kum Chum, Wong Lee Sing v Mansor

RESTRAINT OF TRADE AND


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RESTRAINT OF TRADE ANDLEGAL PROCEEDINGS

1. Restraint of Tradeall contracts restraining a person from carryingon a lawful profession, trade or business is to

that extent prima facie void section 283 exceptions to the general rule:1. Restrictions on the sale of the goodwill of a

business

2. Agreements between partners made upon or inanticipation of a dissolution3. Agreements between partners not to carry on

business during the continuance of the partnership

RESTRAINT OF TRADE AND


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RESTRAINT OF TRADE ANDLEGAL PROCEEDINGS (cont.)

2. Restraint of Legal Proceedingsevery agreement by which any party to an agreementis restricted absolutely from enforcing his rights underthe contract, or any agreement which limits the time toenforce a partys rights, is void section 29exceptions to this general rule:1. Contracts to refer disputes which may arise to arbitration2. Contracts to refer any question which may have already arisen

to arbitration3. Contract in respect of an award of a Government scholarship

wherein it is provided that the discretion exercised by theGovernment under that contract shall be final and conclusiveand shall not be questioned by any court


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RESTRAINT OF TRADE AND LEGALPROCEEDINGS (cont.)

3. Effects of Contracts in Restraint of Tradeand Legal Proceedings

contracts in restraint of trade or legalproceedings are not entirely void. Such acontract is void to the extent of the restraint only

it is possible to sever that part which is invalid

and to enforce the rest of the agreementprovided it does not substantially alter the natureof the agreement

DISCHARGE BY FRUSTRATION


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1. Discharge by Frustrationif a party promises to carry out a particular act, the lawwill hold them to their promise doctrine of absoluteliability

for exceptions to this rule of frustration see Cutter v Powell doctrine of frustration applies where the followingsituations occur:1. Physical impossibility because of destruction of subject matter 2. Physical impossibility under contract of personal service3. Change in the law rendering performance impossible 4. Impossibility due to non-occurrence of event basic to contract5. Where the particular state of affairs ceases to exist

DISCHARGE BY FRUSTRATION,PERFORMANCE AND BREACH



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a contract is frustrated when there is a change in thecircumstances which renders a contract legally orphysically impossible of performance section 57(2)frustration should be supervening and subsequent to theformation of the contract see Maritime National Fish, Ltdv Ocean Trawlers Ltdfrustration only arises where there is an unforeseen andradical change in surrounding circumstances see YeeSeng Plantations Sdn Bhd v Kerajaan Negeri Terengganu& Ors), H A Berney v Tronoh Mines Ltd, StandardChartered Bank v Kuala Lumpur Landmark Sdn Bhd,Eastacres Development Sdn Bhd v Fatimah Mutallip &

Anor, Dato Yap Peng & Ors v Public Bank Bhd & Ors

DISCHARGE BY FRUSTRATION,PERFORMANCE AND BREACH (cont.)



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Effects of Frus t ra t ionto discharge a contract immediately, but only as to thefuture. The contract is not void ab initio, but only voidfrom the time of the frustrating event.a total failure of consideration would need to beestablished in order that the money be recovered see Fibrosa Spolka Akcyjna v Fairburn Lawson CombeBarbour Ltd

2. Discharge by Performanceperformance of a contract must be exact andprecise and should be in accordance with what theparties had promised section 38(1)




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performance may be from a third party and notnecessarily from the promisor section 42

section 56 regulates the position when time is of

the essence of a contractthe performance of any promise may be made inany manner, or at any time, which the promiseeprescribes or sanctions section 51

the effect of both sections 51 and 56 a promisemust be performed at the time agreed by theparties


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when a promise is to be performed on a certain day,and the promisor has undertaken to perform it withoutapplication by the promisee, the promisor may

perform it at any time during the usual hours ofbusiness on the day and at the place at which thepromise ought to be performed section 48

when a party to a contract has refused to perform, ordisabled himself from performing, his promise in itsentirety, the promise may put an end to the contract,unless he has signified, by words or conduct, hisacquiescence in its continuance section 40




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3. Discharge by Breachwhen a party fails to perform their obligationsas agreedcan occur due to: Failure to comply with a term of the contract Anticipatory breach Delay in the performance where time is of the

essence




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Effects o f B reach the innocent party is entitled to treat the contract

as ended and may be able to recover damagespartial breach the innocent party still has tocarry out his obligations but may sue fordamages

if the innocent party ends the contract, he mustrestore any benefits received from the other party section 65



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REMEDIES

1. Rescissionan equitable remedy, which allows an innocentparty to cancel the contract by rescinding or, ifthere has been misrepresentation by the otherparty, raising that misrepresentation as adefence if sued for damages or specificperformance by the other party


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REMEDIES (cont.)

2. Restitutionis sometimes referred to as quasi-contract. It isnot contractual and does not rely on the plaintiff

suffering loss or damage. Its basis is unjustenrichment; that is, those situations where itwould be very unfair if the defendant was to beallowed to retain the money, or the goods orservices, without payment


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REMEDIES (cont.)

3. Damagesmain purpose is to enable the innocent partyto receive monetary compensation from theparty responsible for the breach of contract.Damages are granted to a party ascompensation for the damage, loss or injuryhe has suffered through a breach of contractthe general principle for the assessment ofdamages is compensatory section 74


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REMEDIES (cont.)

the requirement of the plaintiff seekingsubstantial damages to prove both the fact andamount of damages before he can recover the

damages is seen in Popular Industries Limitedv Eastern Garment Manufacturing Sdn Bhd the court must determine what is thereasonable compensation and whether or not

actual damage or loss is proved to have beencaused thereby section 75


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REMEDIES (cont.)

Mit iga t ion o f Lo ss

duty upon the person claiming damages to take

all reasonable steps to reduce, minimize ormitigate their lossif he fails in doing so, the amount of damages torecover will be reduced

if the plaintiff is able to avoid loss, damages willnot be recoverable for the potential loss


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REMEDIES (cont.)

4. Specific Performance is a discretionary order granted by the courtsdirecting a person to carry out their obligations

under the contract. It is not generally used inbreach of contract actions unless damagesprove to be inadequate.the court has a discretion to refuse specific

performance where the granting of it wouldcause undue hardship to the defendant section 21,Specific Relief Act 1950


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REMEDIES (cont.)

specific performance may be granted inrespect of agreement relating to landtransactions where there is a presumption thatthe breach of a contract to transfer immovableproperty cannot be adequately relieved bycompensation in money section 11(2) of theSpecific Relief Act 1950specific performance may also be granted inrespect of executory contracts and in caseswhere actual damage cannot be ascertained


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REMEDIES (cont.)

the court will exercise its discretion not todecree specific performance:1. Where damages will provide an adequate remedy

section 20(1)(a),Specific Relief Act 1950.See Yeo Long Seng v Lucky Park (Pte) Ltd

2. Where the terms of the contract are uncertain section 20(1)(c), Specific Relief Act 1950. SeeLim Nyuk Chan v Wong Sz Tsin

3. Where there has been delay in bringing the action


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REMEDIES (cont.)

4. Where there is evidence of fraud5. Where to do so would require the constant

supervision of the court see Lee Sau Kong v LeowChang Chiang

6. Contracts for personal services see Dato Abdullahbin Ahmad v Syarikat Permodalan Kebangsaan Bhd& Ors

the court has the power to award damages inaddition to or in lieu of specific performance section 18, Specific Relief Act 1950


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REMEDIES (cont.)

5. Injunctionis a discretionary court ordermay be:a) prohibitory preventing the breach of a contractb) mandatory requiring a person to perform some

contractual obligationc) interlocutory where it freezes the status quo between

the parties until the dispute can be heard by the court

is an equitable remedy can be varied ordissolved if the court discovers later that theapplication was made on suppressed facts or factsupon which the order was granted no longer exist


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REMEDIES (cont.)

6. Mareva Injunctionprevents the defendant removing or disposing ofany assets in the jurisdiction until the courtmakes a decisiona plaintiff must be able to establish all thefollowing:a) the defendant has assets that are in the courts

jurisdiction

b) there is a real risk that the defendant will remove orget rid of any assets before judgement

c) the plaintiff can establish a substantive cause ofaction such as a claim for damages


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Remedies (cont.)

7. A n t o n Pil ler Or d er

may be made available in exceptionalcircumstances where it can be shown that thedefendant has incriminating evidence in theirpossession, which is necessary to the plaintiffscase and which may well be destroyed before acourt order for discovery can be made


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REMEDIES (cont.)

8. Qu an tu m Meru it means as much as he has earned and onlyarises in cases of part performancecan arise where:a) a defendant has prevented a plaintiff from carrying

out the remainder of their contractual dutiesb) the parties cannot agree on paymentc) the parties agree on payment for the part-

performance but not the actual amount


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REVIEW

IntroductionElements of a ContractPrivity of Contract

Terms of a ContractVoidable ContractsVoid and Illegal Contracts

Restraint of Trade and Legal ProceedingsDischarge by Frustration, Performance and BreachRemedies

Documents

LW_311-Business_Law-Chap6.ppt