week 6 subtopic 5.ppt

8/16/2019 WEEK 6 subtopic 5.ppt

1/21

RANACO EDUCATION & TRAINING

INSTITUTE

LAW 243 COMMERCIAL LAW

SUBTOPIC 5:

DISCHARGE & REMEDIES


2/21


INSTITUTE


2.5 Discharge of ree!ies

Source: Syed Ahmad Alsagoff, Principles of the law of contract in Malaysia, Lexis Nexis, 200! "ontract Act #$0%

• &hen contract is 'rought to an end or dissol(ed orterminated%

• )'ligations under contract can 'e discharged in * ways:

•Perfora"ce• Breach of Co"#rac#

• Agreement

• +erm of contract

• )peration of Law

• octrine of -rustration


3/21


INSTITUTE


PER$ORMA%CE

•As a general rule, performance of a contract must 'e exact and precise and should 'e in accordance with what the parties had

promised%

•Perform 'y whom./ y parties: S '()* CA )+5, pro(ides that parties to a

contract must either perform or offer to perform their

respecti(e promises, unless such performance has

dispensed with any law%

/ S. '(2* CA )+5, 1 epresentati(e if parties died



4/21


INSTITUTE


")N+3N45

• Performance may 'e from a third party and not necessarily

from the promisor:

/ S. -2 CA )+5, pro(ides that 6when a promisee accepts performance of the promise from a third person, he cannot

afterwards enforce it against the promisor7%



5/21


INSTITUTE


")N+3N45

Perfore! / 0ho1

• S. '()* Parties

• S. '(2*1 epresentati(e if parties died• S. -)1 re8uirement tt performance 'y promisor himself

– Promisor must perform

– 3n other case, may employ competent person to perform

– 3ssue: consideration may mo(e from other person%

Source: "ontract Act #$0%


6/21


INSTITUTE


")N+3N45

Tie & P3ace of Perfora"ce

• S. -45,

• 9 at specified time ; place

• 3f time < specified1 any reasona'le time (s.-4*

• 3f place < specified1 promisee must specify (s. 5, & 5)*



7/21


INSTITUTE


")N+3N45

Perfora"ce of Reciroca3 Proise

• S. 5255• Simultaneous performance

• Promisor need not perform his promise unless,

• Promisee is ready=willing to perform his promise



8/21


INSTITUTE


BREACH

• )ccurs when party fails=refuses to perform his contractual

o'ligation

• efaulted party (% innocent party

• 3nnocent has 2 options:

– epudiate 1 relie(ed from performance ;

1 entitled to damages

– "ontinue contract > entitled to damages

1 'ut must perform

Source: Syed Ahmad Alsagoff, Principles of the law of contract in Malaysia, Lexis Nexis, 200


9/21


INSTITUTE


")N+3N45

2 O#io"s #o I""oce"# Par#/:

). Discharge

– May refuse further performance of his o'lig7n

– esist any action 'y defaulting party

–eco(er any money tt he has paid

– Sue for damages if suffered any

– Alternati(ely, sue on 8uatum meruit for (alue of wor?done=goods supplied

2. 6 Discharge

– Must perform his contractual o'lig7n – 3f nature of 'reach disentitles to discharge @warranty1

entitled to damages

Source: Syed Ahmad Alsagoff, Principles of the law of contract in Malaysia, Lexis Nexis, 200%


10/21


INSTITUTE


")N+3N45

• Not all 'reach ena'les to terminate contract

• epends on nature of the term 'reached

Source: Syed Ahmad Alsagoff, Principles of the law of contract in Malaysia, Lexis Nexis, 200%


11/21


INSTITUTE


REMEDIES $OR BREACH O$ CO%TRACT

+he remedies a(aila'le for 'reach of contract are:

). DAMAGES

2. 7UA%TUM MERUIT

. SPECI$IC PER$ORMA%CE-. I%8U%CTIO%

% 5S"3SS3)N

*% 5S+3+4+3)N

B% AN+)N P3LL5 )5

Source: Lee Mei Pheng ; 3(an Ceron etta, "ommercial law, )xford -aDar, 20##%


12/21


INSTITUTE


). DAMAGES

• +he main purpose of damages is to ena'le the innocent party to

recei(e monetary compensation from the party responsi'le for the

'reach of contract%

• amages are not awarded to punish a wrongdoer, 'ut rather to put

the inDured party 'ac? in the position that they would ha(e occupiedif the contract had 'een performed as originally intended%

• amages are calculated on the 'asis of loo?ing at what the position

should ha(e 'een properly performed%

• S. 4- C.A. )+5,




13/21


INSTITUTE


2. 7UA%TUM MERUIT

• Literally: as much as he has earned

• &here Plaintiff sues for unspecified amount for his ser(ices

• "oncept recogniEed in S. 4) C.A. )+5,

• ifferent from amages: – amages1 "laim for compensation for a loss

– FM > "laim for reasona'le remuneration




14/21


INSTITUTE


")N+3N45

A9ai3a3e he":

#% 5xpress=implied agreement to pro(ide ser(ices 'ut <

agreement to price

2% Parties < perform o'ligation under contract, 'ut a new

contract inferred from their conduct to ha(e replaced the

original1 FM for wor? done

G% "ontract terminated 'y 'reach after performance of

o'ligation 'y one party1 sue on FM for (alue of wor?

done

H% Person is pre(ented from completing his o'ligation 'y

other party%




15/21


INSTITUTE


. SPECI$IC PER$ORMA%CE

• An order of court re8uiring a party to perform to put the

parties in position which due performance of their o'ligation

would ha(e placed them%

• 0he" secific erfora"ce a9ai3a3e1

#% reach of S ; P of land contract > amages < ade8uate to

compensate

2% Su'Dect matter of contract is rare=uni8ue, e%g% anti8ue car >

damages < ade8uate

G% 5xceptional case where damages would not 'e ade8uate



16/21


INSTITUTE


-. I%8U%CTIO%

• A" or!er of Co;r# #o rohii# #hrea#e"e! or co"#i";i"gi33ega3 co"!;c# of cer#ai"


17/21


INSTITUTE


7UI=

#% &here a 'reach of contract occurs the innocent party canusually choose whether or not to terminate the contract

@+rue = -alse

2% &hich one of the following is %OT a method 'y which

a contract can 'e discharged:

a% "onsideration

'% Performance

c% -rustration

d% Agreement



18/21


INSTITUTE


")N+3N45

3. 3nDunction is an order of "ourt to prohi'it threatened orcontinuing illegal conduct of certain ?inds

@+rue = -alse

H% &hich one of the following is %OT a condition of

inDunction:

a% amages are ade8uate

'% +here is danger that, unless restrained, efendant will

'reach the contract or continue with the 'reach

complained c% amages must 'e shown to 'e inade8uate

d% Plaintiff must ha(e an interest to protect



19/21


INSTITUTE


")N+3N45

% An order of court re8uiring a party to perform to put

the parties in position which due performance of their

o'ligation would ha(e placed them%

@+rue = -alse

*% +he following are situations when specific

performance a(aila'le e>ce#:a% reach of S ; P of land contract1 damages

inade8uate

'% Su'Dect matter of contract is rare=uni8ue

damages not ade8uatec% 5xceptional case where damages would not 'e

ade8uate

d% amages are ade8uate



20/21


INSTITUTE


")N+3N45

B% Performance may 'e from a third party and notnecessarily from the promisor @+rue = -alse

I% Performance may not 'e performed 'y representati(e if

parties died @+rue = -alse

$% amages are awarded to punish a wrongdoer @+rue =

-alse

#0% Fuantum Meruit a(aila'le when a person is pre(entedfrom completing his o'ligation 'y other party @+rue =

-alse



21/21


INSTITUTE


Tha"< /o;?

week 6 subtopic 5.ppt

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