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)