Breach of contract
section 38(1) provides
"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."
Frustration under Malaysian Law
- section 57(2), Contracts Act 1950
Partial Performance case
1/ Ming & Co v Leong Ping Ching [1964] 1 M.L.J 312 2/ Poh Geok Sing v HB Enterprise Sdn Bhd [2006] 1 M.L.J 617, 3/ Smith Construction Co Ltd v Phit Kirivatna [1955] M.L.J 8 4/ Cutter v Powell [1775-1802] All E.R Rep 159 5/ Sumpter v Hedges [1898] 1 Q.B 673
Section 40, Contacts Act 1950 Claim
2 Pre-requisites 1. The party who has repudiated the contract either 'refused to perform' or 'disabled himself from performing 2. The refusal or disability affects the promise of the other party in its entirety
Substantial Performance
Being able to claim the full contract price even though there is defective performance or non-performance of some terms.
Substantial Performance case
Boone v Eyre 126 Eng. Rep. 160 (1777) Hoenig v Isaacs. [1952] 2 All E.R 176
Discharge from Contract
By agreement, by performance, by frustration, by breach
a) MM Ally & Co v Chellamah [1948] 1 M.L.J 202 b) Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1989] 1 Q.B. 433 c) Shencourt Sdn Bhd v Aseambankers Malaysia Bhd [2011] M.L.J.U 552 d) section 68, Contracts Act 1950
Discharge by Performance CASES
The nature of the duty was explained in
Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1989] 1 Q.B. 433
Nature of Breach
It is important to determine whether the term has been breached is a condition or warranty.
If variation took place then the party to whom the variation applies is free from obligations under the old term but bound under the new term
Kepong Wood Products Co Sdn Bhd v Daishowa (M) Wood Products Sdn Bhd [1979] 1 M.L.J 195
if what is being claimed is non-performance then it must be proved there was no intent to perform.
Loke Yuen Cheng v Vimtex Sdn Bhd, [1998] 4 M.L.J 169 -
If the innocent party to the contract wishes to terminate because of the breach, the intention to terminate and reason must be communicated to the other party either expressly or impliedly
Mintye Properties Sdn Bhd v Yayasan Melaka, [2006] 6 M.L.J 420
LYL Hooker Sdn Bhd v Tevanaigam Savisthri [1987] 2 M.L.J 52.
Novation constitutes making a new contract to replace one that is existing.
Mawar Awal (M) Sdn Bhd v Kepong Management Sdn Bhd [2005] 6 M.L.J. 132
Novation: There must be an intention to substitute
Rescission
Parties enter into an agreement to rescind the existing contract
There must be evidence to prove the variation took place and was intended
Paul Murugesu Ponnusamy (as representative of Nalamah Sangapillay (deceased) v Cheok Toh Gong [1996] 1 M.L.J 843
Section 63 case
Polygram Records Sdn Bhd v The Search [1994] 3 M.L.J 127 Ambank (M) Berhad v Target Bank Sdn Bhd [2008] M.L.J.U 327
section 41
Principles - who performs : Either the promisor or a competent party may perform
Principles- performance
Section 38
Principles- offer to perform
Section 39
Discharge by Breach
Section 40
Discharge by performance by third party
Section 42, Contracts Act 1950 Case: Chinn Swee Onn v Puchong Realty Sdn Bhd [1990] 1 M.L.J 108
Discharge by Agreement
Section 63 : 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
Partial Performance
The general rule is that contractual obligations must be performed fully - section 38(1).
Parties will be bound by the new term(s) that has varied performance in the original contract
Yong Mok Hin v United Malay States Sugar Industries Ltd [1967] 2 M.L.J 9
The nature of the duty includes concepts:
a) Good faith; b) Playing fair; c) Coming clean; d) Putting one's cards face upwards on the table; and e) Principle of fair open dealing
Parties are not bound by promises if:
a) If law allows it (section 38(1)) b) If parties provide for means by which they are released from obligation to perform (section 38(2)) c) Death of one of the parties to the contract (section 38(2)).
Variation
parties agree to alter the existing contract between them. The altered terms will not replace the old terms
Federal Construction Co (Penang) Sdn Bhd v Chor Kai Gun [2012] 10 M.L.J 571
section 41 Case
Pacific Forest Industries Sdn Bhd & Anor v Lin WenChih, [2009] 6 M.L.J 293
section 57(2), Contracts Act 1950 CASES
Novation
substituting an old contract for a new one
Discharge by Frustration Cases
• Krell v Henry [1903] 2 K.B. 740. • Herne Bay Steam Boat Co. v Hutton. I [1903] 2 K.B. 683
Duty to perform
• section 38(1)