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GP Contract > Chapter 8 - Discharge by Performance > Flashcards

Chapter 8 - Discharge by Performance Flashcards

1
Q

DISCHARGE BY PERFORMANCE

Overview

A

1) Time for performance

2) Manner of performance

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2
Q

TIME FOR PERFORMANCE

Overview

A

1) General rule
2) Time is of the essence
3) Time is not of the essence
4) Time in conditional contracts

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3
Q

TIME FOR PERFORMANCE

General rule

A

1) S.47:
- within reasonable time.
2) Damansara Realty Bhd v Bungsar Hill Holdings Sdn Bhd:

  • when the time is at large, duty is to commence work within reasonable time;
  • failure to take necessary steps to commence work may amount to breach, i.e. anticipatory breach.
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4
Q

TIME IS OF THE ESSENCE

Overview

A

1) The law & scope
2) When is time of the essence - general rule
3) Existence of LAD clause
4) Waiver
5) Acceptance of performance other than time specified
6) Failure to perform

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5
Q

TIME IS OF THE ESSENCE

The law & scope

A

1) The law:
- S.56
2) Scope - Sim Chio Huat v Wong Ted Fui:

  • failure to perform at specified time = party may terminate;
  • no termination = contract subsisting, time ceases to be of the essence.
  • cannot claim damages for late performance unless there is specific clause allowing it.
  • can make time of the essence again, but need to send notice of new date of completion.
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6
Q

TIME IS OF THE ESSENCE

When is time of the essence - general rule

A

Tan Ah Kian v Haji Hasnan:

  • EXPRESSLY stipulated in the contract; or
  • REASONABLE NOTICE to make time of the essence; or
  • NATURE of the contract making it time of the essence.
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7
Q

TIME IS OF THE ESSENCE

When is time of the essence - existence of LAD clause

A

1) BTS Sdn Bhd v M-Concept Sdn Bhd (FC):
- when there is LAD clause, it points to time not being of the essence.
2) cf. Chye Fook v Teh Teng Seng Realty Sdn Bhd:

  • entitlement to LAD does not take away the right to rescind for failure to complete within stipulated time;
  • time is still of the essence if it is provided as such.
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8
Q

TIME IS OF THE ESSENCE

Waiver - overview

A

1) Effect of waiver
2) Silence
3) Continued negotiations
4) Extension of time
5) Extension of time + continued negotiations

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9
Q

WAIVER

Effect of waiver

A

Sim Chio Fuat v Wong Ted Fui:

  • innocent party is deemed to treat the contract as subsisting;
  • ctt exists but time is at large;
  • cannot claim for liquidated damages unless there is provision for it;
  • must give notice if wants to make time of the essence again.
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10
Q

WAIVER

Silence

A

Araprop Development Sdn Bhd v Leong Chee Kong & Anor:

  • mere silence per se cannot amount to waiver;
  • there must be additional factor which can be interpreted or inferred as waiver.
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11
Q

WAIVER

Continued negotiations

A

Wong Kup Sing v Jeram Rubber Estate Ltd:

  • Continued negotiations & allowing time to pass amounts to waiver.
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12
Q

WAIVER

Extension of time

A

Siah Kwee Mow v Kulim Rubber Plantation:

  • Mere extension of time stipulated would not amount to waiver.
  • extension of time is a waiver for substituting the original time, not waiver for time of the essence.
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13
Q

WAIVER

Extension of time & continued negotiations

A

Wong Kup Sing v Jeram Rubber Estate Ltd:

  • multiple extensions & continued negotiations amount to waiver.
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14
Q

ACCEPTANCE OF PERFORMANCE OTHER THAN TIME SPECIFIED

Overview

A

1) the law & scope

2) housing development

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15
Q

ACCEPTANCE OF PERFORMANCE OTHER THAN TIME SPECIFIED

the law & scope

A

1) The law:
- S.56(3)
2) Scope - Yeo Kim Pong Realty Ltd v Ng Kim Pong:

  • a party who grants eot to the defaulting party has accepted the performance at other time than the time agreed;
  • if he intends to sue for damages for late performance, he must give notice to the defaulting party.
  • if no notice is given, he may not be able to recover such compensation.
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16
Q

ACCEPTANCE OF PERFORMANCE OTHER THAN TIME SPECIFIED

housing development

A

Sentul Raya Sdn Bhd v Hariram Jayaram:

  • S.56(3) does not apply to housing development contract;
  • Under HDA, purchaser is able to claim for LAD for late delivery once completion dates have passed.
17
Q

FAILURE TO PERFORM

Overview

A

1) Effect of failure to perform
2) Options to rescind
3) Rights to damages

18
Q

FAILURE TO PERFORM

Effect of failure to perform

A

Linggi Plantations Ltd v Jagatheesan:

  • amounts to breach;
  • terminate the contract + sue for breach + restitution S.65; OR
  • affirm the contract + sue for breach.
19
Q

FAILURE TO PERFORM

Options to rescind

A

Loke Yuen Cheng & Anor v Vintex Sdn Bhd:

1) Option 1:

  • rescind under S.56(1);
  • rescission ab initio;
  • remedies: restitution S.65 + 66 ONLY
  • cf. with Muralidhar below.

2) Option:

  • action for breach under S.40;
  • remedies: damages S.76, restitution S.65 +66
20
Q

FAILURE TO PERFORM

Rights to damages

A

Muralidhar Chatterjee v International Film Company Ltd:

  • damages are claimable despite termination taken under S.56(1) or S.40.
  • S.56(1) is also voidable ctt, so S.65 + 66 apply.
21
Q

TIME IS NOT OF THE ESSENCE

Overview

A

1) The law
2) When
2) Right to rescind
3) Notice to make time is of the essence
4) Relief for SP

22
Q

TIME IS NOT OF THE ESSENCE

The law

23
Q

TIME IS NOT OF THE ESSENCE

When

A

KL Landmark Sdn Bhd v Standard Chartered Bank:

  • NO EXPRESSION that time is of the essence;
  • NO NOTICE is given to make time of the essence;
  • NATURE OF THE CONTRACT does not make time is of the essence.
24
Q

TIME IS NOT OF THE ESSENCE

Right to rescind

A

Ganam Rajamany v Somoo Sinniah:

  • There is no right to rescind if the time is not of the essence.
25
TIME IS NOT OF THE ESSENCE Notice to make time of the essence
Yeo Liong Ho v Loh Choon Hooi: - No breach of on part of notice giver; - Notice giver is ready, willing & able to perform & complete; - Notice receiver must be guilty of unreasonable delay well before notice to complete is served; - Notice must limit a reasonable period for completion.
26
TIME IS NOT OF THE ESSENCE Relief for SP
Ganam Rajamany v Somoo Sinnniah: - Innocent party must show that he has performed or at all times ready, willing & able to perform; - If innocent party is not ready, SP will not be granted.
27
TIME IN CONDITIONAL CONTRACTS How to interpret
Aberfoyle Plantations Ltd v Khaw Bian Cheng: - fixes a date for completion: condition must be fulfilled by that date; - fixes no date of completion: condition must be fulfilled within reasonable time; - fixes date for fulling condition: condition must be fulfilled strictly, time cannot be extended. - when condition is not fulfilled, the agreement will be held unenforceable.
28
MANNER OF PERFORMANCE Overview
1) Manner of performance where time is stipulated 2) Refusal to accept performance 3) Performance by 3rd party 4) Partial performance 5) Performance of reciprocal promise
29
MANNER OF PERFORMANCE Who to perform
1) The law: S.41 2) Refusal to accept performance - MM Ally & Co v Chellamah: - a promisor cannot be held in breach if promisee refuse to accept his performance; - A man cannot by his own deliberate fault, create a artificial fault in another.
30
MANNER OF PERFORMANCE When to perform
1) The law: - S.48 2) When vendor does not have office hours - Lim Yoh v Astana Strategi (M) Sdn Bhd: - When the vendor has no office hours or office does not open, S.48 does not apply.
31
MANNER OF PERFORMANCE Performance by third party - the law
S.42
32
MANNER OF PERFORMANCE Performance by third party -part-performance by 3rd party
1) Hj. Nik Ishak v Nik Zainab Nik Jaafar: - partial-performance is sufficient for S.42 to apply; - upon acceptance of the performance albeit partly done, promisee cannot enforce the promise against the promisor. 2) cf. Scott & English (Malaysia) v Foo Thor Lombong Bijih Sdn Bhd: - there must be actual & full performance by 3rd party before S.42 can apply & promisor can be released from his obligation. 3) cf. Wasco Lindung Sdn Bhd v Lustre Minerals Sdn Bhd (2014) - there must be actual performance by 3rd party for S.42 to apply; - if there is a breach by 3rd party, S.42 will not apply; - promisee is able to hold promisor liable & enforce the promise against him. - this is so unless the promisee will be unjustly enriched.
33
PARTIAL PERFORMANCE Overview
1) General rule & exceptions 2) Factors for substantial performance 3) Relief - quantum meruit claim at common law 4) Relief - quantum meruit claim under S.71
34
PARTIAL PERFORMANCE General rule & exceptions
1) General rule - Bolton v Mahadeva: - partial-performance is non-performance. 2) Exception 1 - divisible contract - Ming & Co v Leong Ping Ching: - Divisible contract = Contract where payments are made from time to time. - Entire contract = failure to complete work will disentitle him from making any claims. 3) Exception 2 - substantial performance - KP Kunchi Raman v Goh Brothers Sdn Bhd: - A promisor who has substantially performed his side of contract may sue for the agreed sum; - He however remains liable for his partial failure to fulfil his contractual obligations.
35
PARTIAL PERFORMANCE Factors for substantial performance
Sapiahtoon v Lim Siew Hui: - nature of defects / non-performance & costs of remedying defects; - proportion between the costs of rectifying such defects & contract price; - Extent to which the work has been completed.
36
PARTIAL PERFORMANCE Relief - quantum meruit claim under Contract Act
1) The law: S.71 2) Conditions - Siow Wong Fatt v Susur Rotan Mining Ltd & Anor: - The work done must be lawful; - The work done must be for another person; - The work must not be intended to be done gratuitously; - The work done must be such that the other person enjoys the benefit of the act.
37
PARTIAL PERFORMANCE Relief - quantum meruit claim at common law
1) Option - Sumpter v Hedges: - D as recipient of benefit whom to pay the claim must be given the option to accept or reject the benefit, in order for P to claim the benefit he has given. 2) Not at fault - Lau Kee Ko v Paw Ngi Siu: - P must not be at fault or breach. 3) Contract provision - Sykt Binaan Utara Jaya v Koperasi Sungai Glugor Bhd: - if the ctt provide of quantum meruit claim, P can claim for it even though he is at breach. 4) Reasonable price - Haji Hasnan v Tan Ah Kian: - the claim is only for reasonable price for work done.
38
PERFORMANCE OF RECIPROCAL PROMISE The law & scope
1) The law: - S.52, 53, 54, 55 2) Code Focus Sdn Bhd v Tan Chee Hoe & Sons Sdn Bhd: - S.52: promisor need not to perform unless the promise is ready & willing to perform his promise; - S.53: order to perform; - S.54: where one party prevents the other party to perform.

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