Presented by:

Nur ‘Atiqah Binti Yahaya (G1318226)

Norbairah Binti Kamil (G1311698)
 Definition of
“Breach of Contract”

 Failing to perform any term of a contract, written or
oral, without a legitimate legal excuse.

 This may include not completing a job, not paying in

full or on time, failure to deliver all the goods,
substituting inferior or significantly different goods,
not providing a bond when required, being late
without excuse, or any act which shows the party
will not complete the work ("anticipatory breach").
 Introduction

 Breach of contract:
 Occurs when party fails / refuses to perform his contractual
obligation.
 Defaulted party v. innocent party

 Remedies for breach is normally in monetary

compensation to innocent party.

 Remedies depend on the severity of breach.

 Remedies – 6 types.
 Rescission

 An equitable right to put an end to a contract and have
the status quo restored.

 Can be granted on terms, however, if grounds for

repudiation are established, it is available as of rights.

 In theory, there is no need to go to the court in order to

rescind the contract, an application to the court is prudent
where there is:
 Doubts, damages, rescission being sought, or assistance is
required to restore the status quo.
Rescission (2): Grounds for
Rescission

Fraud

Innocent Misrepresentation

•A false statement not made fraudulently, inducing another to enter into a

transaction.

Constructive Fraud

•A miscellaneous collection of conduct which treats equally as if it were fraud.

Mistake

•Will be available if there has been a common misapprehension; OR

•Where the mistake is unilateral and there has been sharp practice.
 Rescission (3)

 The right of rescission (‫ )الخيار‬is the right unilaterally to
cancel (‫ )فسخ‬or to ratify a contract.

 Can be confirmed by law, or agreed upon by the

contracting parties.

 The buyer has the right of rescission at the time at which

he sees the object he has bought (in case of defect item).

 If the seller delivers less than the stipulated quantity, the

buyer has the option between rescission of the sale or
abutment of the price in proportion.
 Damages

 The purpose of awarding damages:
 to compensate the innocent party (Plaintiff/Claimant) for
the loss suffered due to the Defendant’s breach of contract.

 The measure of damages under section 74 of the Malaysia

Contract Act, 1950:
 When a contract has been broken, the party who suffers by
the breach is entitled to receive, from the party who has
broken the contract, compensation for any loss or damage
caused to him thereby.
 Such compensation is not to be given for any remote and
indirect loss or damage sustained by reason of the breach.
 Specific Performance

 An order of court requiring a party to perform.

 To put the parties in position which due

performance of their obligation would have placed
them.

 Example: X agreed to sell an old and unique painting

to Y for RM50,000. Subsequently X refused to sell the
painting. Here, Y may file a suit against X for the
specific performance of the contract.
 Specific Performance (2)

 Principles of granting specific performance:
There must be an enforceable contract.

The claimant must have given consideration.

Damages must be an inadequate remedy.

Mistake: No specific performance for void contract.

Hardship amounting to injustice: No specific performance will be granted.

Specific Performance (3)

 Situations when damages must be an inadequate
remedy:
1. Land: Land is unique so damages will always not
adequate to compensate.
2. When chattels (all personal property other than real
estate) are rare/unique:
• e.g. antique car – damages not adequate
3. Exceptional case where damages would not be
adequate (when the contract was to make a loan).
 Injunctions

 Court order forbidding something from being done (prohibitory
injunction), or commanding something to be done (mandatory injunction).

 Injunctions are issued where mere award of damages at the end of a trial
would not be satisfactory or effective, or may lead to a greater harm or
injustice.

 An injunction commands an act that the court regards as essential to

justice, or it prohibits an act that is deemed to be contrary to good
conscience.

 It is an extraordinary remedy, reserved for special circumstances in which

the temporary preservation of the status quo is necessary.

 A contract for personal service is not normally subject to specific

performance but may be enforced by injunction.
 Injunctions (2)

 Example: A landlord might bring an action against a tenant for waste, in
which the right to protect the land-lord's interest in the ownership of the
premises is at issue. The landlord might apply to the court for an
injunction against the tenant's continuing harmful use of the property. The
injunction is an additional remedy in the action against the tenant.

 An injunction is usually issued only in cases where irreparable injury to

the rights of an individual would result otherwise. It must be readily
apparent to the court that some act has been performed, or is threatened,
that will produce irreparable injury to the party seeking the injunction.

 An injury is considered irreparable when it cannot be adequately

compensated by an award of damages. If a loss can be calculated in terms
of money, there is no irreparable injury.
 Loss of profits alone is insufficient to establish irreparable injury.
 The potential destruction of property is sufficient.
 Injunctions (3)

 The Majelle:
 “Excessive damage in whatever way it may be caused is to be removed.”
 “Some people also, who are a public harm, like unskilled doctors, are
restrained.”

 Examples of prohibitory injunctions: prohibitions against cutting trees,

creating nuisances, polluting a stream, picketing which goes beyond the
bounds of free speech and assembly, or removing funds from a bank
account pending determination of ownership.

 Examples of mandatory injunctions: return of property, keeping a gate to a

road unlocked, clearing off tree limbs from a right-of-way, turning on
electricity or heat in an apartment building, or depositing disputed funds
with the court.
• Mandatory injunctions are quite rare in practice.
 Restitution Remedies

 Restitution is based on the concept of unjust enrichment
or benefit. The plaintiff must establish that the benefit was
at the plaintiff’s expense, and that it would be unjust to
allow the defendant to keep that benefit or enrichment.

 Subject to:
1. the defendant must obtain a benefit or enrichment
2. the defendant has no defenses to rely upon.

 Restitution occurs when the claimant has granted the

defendant with some kind of benefit and wants to claim it
back because of the breach of contract.
Restitution Remedies (2)

 Restitution can be used if the defendant has received
a sum of money from the plaintiff and there has been
a total failure of consideration.
• Example 1: If the claimant (plaintiff) has paid for the
goods but has not received them.

 Both parties must return the item (goods, property,

or money) previously conveyed.
 Quantum Meruit

 Literally means “as much as is earned”. It is an
alternative way to get damages.

 Used when damages (compensations) cannot be

claimed under a contract because no sum was set for
the work to be done, or the contractual work has not
been finished through no default of the plaintiff.

 The award made will depend on the facts of the case.

 Case Study 1
Planche v Colburn

 P agreed to write a volume on ancient armour to be
published in a magazine owned by C. For this, P was to
receive 100 pounds on completion. When P had
completed part of the work, but not the whole, C
abandoned the magazine.

 What remedy(ies) should P file for?

 P was held entitled to get damages for breach of contract

and payment quantum meruit for the part already
completed.
 Case Study 2
Lumley v Wagner (1852)

 D was an opera singer who had contracted with P to sing at Her
Majesty's Theatre exclusively for 3 months. The contract
contained a term that she would not sing anywhere else during
that time without the consent of P.

 During the first contract, she entered a second contract with

Frederick Gye to sing at Covent Garden Theatre.

 What remedy(ies) should P file for?

 P applied for and was awarded an injunction to restrain D from

singing anywhere else during the time specified in the first
contract.
Thank You