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    CTC Answer Breach

    Uploaded by

    Ain Anuwar
    The document discusses whether a contract between two parties, Perniagaan Spanova and Novo Hotel, was discharged due to a breach. It outlines two situations under common law where the innocent party can be discharged from a contract: repudiation and fundamental breach. For a fundamental breach to allow discharge, the consequences of the breach must be so severe that they undermine the very purpose of the contract. Section 40 of Malaysia's Contract Act also allows discharge if a party refuses or disables themselves from performing their contractual promises entirely. The document applies these principles to analyze whether the breach in question was fundamental enough to discharge the contract.

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    CTC Answer Breach

    Uploaded by

    Ain Anuwar
    135 views2 pages
    The document discusses whether a contract between two parties, Perniagaan Spanova and Novo Hotel, was discharged due to a breach. It outlines two situations under common law where the innocent party can be discharged from a contract: repudiation and fundamental breach. For a fundamental breach to allow discharge, the consequences of the breach must be so severe that they undermine the very purpose of the contract. Section 40 of Malaysia's Contract Act also allows discharge if a party refuses or disables themselves from performing their contractual promises entirely. The document applies these principles to analyze whether the breach in question was fundamental enough to discharge the contract.

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    contract

    Original Title

    Ctc Answer Breach

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    The document discusses whether a contract between two parties, Perniagaan Spanova and Novo Hotel, was discharged due to a breach. It outlines two situations under common law where the innocent party can be discharged from a contract: repudiation and fundamental breach. For a fundamental breach to allow discharge, the consequences of the breach must be so severe that they undermine the very purpose of the contract. Section 40 of Malaysia's Contract Act also allows discharge if a party refuses or disables themselves from performing their contractual promises entirely. The document applies these principles to analyze whether the breach in question was fundamental enough to discharge the contract.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    135 views2 pages

    CTC Answer Breach

    Uploaded by

    Ain Anuwar
    The document discusses whether a contract between two parties, Perniagaan Spanova and Novo Hotel, was discharged due to a breach. It outlines two situations under common law where the innocent party can be discharged from a contract: repudiation and fundamental breach. For a fundamental breach to allow discharge, the consequences of the breach must be so severe that they undermine the very purpose of the contract. Section 40 of Malaysia's Contract Act also allows discharge if a party refuses or disables themselves from performing their contractual promises entirely. The document applies these principles to analyze whether the breach in question was fundamental enough to discharge the contract.

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    Issue

    Whether the contract between Perniagaan Spanova, defendant and Novo Hotel, plaintiff
    is discharge under discharge by breach.

    Law & Application

    Under common law there are 2 situations which give the innocent party the right to be
    discharged from the contract: a) Repudiation and b) a fundamental breach

    The fundamental breach is a situation where allows an innocent party to rescind the
    contract and treat himself as discharged. There are two alternative approaches; the first
    approach is to look at the importance attached by the parties to the term which has
    been broken; the second approach is to examine the consequences of the breach of the
    term. The first is based on the traditional classification of terms as either a condition or
    a warranty. The second is a result of the emergence of new category of innominate
    or intermediate term in the case of Hongkong Fir Shipping Co Ltd v Kawasaki Kisen
    Kaisha Ltd.

    In relation to the approach of innominate term, the right to a discharge hinges upon the
    gravity of the consequences flowing from the breach. If consequences are so severe
    which strike at the very purpose of the contract, the breach will allow an innocent party
    to be discharged. If the effect of the breach is only minor and capable of being
    remedied, then it will only afford a remedy of damages.

    Discharge by breach under Section 40 Contract Act 1950

    In Malaysia, the right to rescind a contract flowing form a breach is governed by s40 of
    the Contract Act. Section 40 provides:

    When a party to a contract has refused to perform, or disabled himself from


    performing, his promise in its entirety, the promise may put an end to the
    contract, unless he has signified by words or conduct, his acquiescence in its
    continuance.
    Under s40 of the Contract Act, the innocent party may rescind (in the words of s 40
    may put an end to the contract) in two situations: first, the defaulting party refuses to
    perform and second, the defaulting party disables himself from performing, his promise
    its entirety.

    The concept of fundamental breach was explained in Ching Yik Development Sdn Bhd v
    Setapak Heights Development Sdn Bhd where the Court of Appeal laid down the
    following principles. First, where the term breached is fundamental to the contract, the
    innocent party is entitled to treat himself as discharged from further obligations under it.
    Second, where the term breached is only subsidiary or minor in nature, the innocent
    party may not treat himself as discharged under the contract but may recover damages
    for the non-performance of the subsidiary term. Thus, a party who

    Application

    Conclusion

    Remedies

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