REMEDIES
REMEDIES
There
are several remedies provided by the law to give relief to the party not in
default in a breach of contract.
1. Rescission of Contract. - Sec 40
2. Damages. - Sec 74 to 76
3. Specific Performance. - The Specific Relief Act 1950
4. Injunction. - Specific Relief Act
5. Quantum Merit
1. RESCISSION
As
dealt with in the previous part under sec. 40
2. DAMAGES
Damages
are granted to a party as compensation for the damage, loss or injury done /
suffered through breach of contract - but damage can’t be too remote or
indirect. Damages can be classified as substantial, nominal or exemplary
Sec
74 - ‘when a contract has been broken, the party who suffers is entitled to
receive…..compensation for any loss or damage….which naturally arose in
the usual course of things..or which the parties knew, when they made
the contract, to be likely to result from the breach’.
Illustrations
to sec74 also indicate that the aggrieved party may recover damages -
for
other expenses incurred as a result of the breach,
for loss of profits arising out of the breach,
for
the difference btw the price of goods as contracted for and the actual price
the goods were sold for as result of the breach.
Sec
75
- ‘When a contract has been broken, if a sum is named in the contract as the
amount to be paid in case of such breach…or any other stipulation by way of
penalty…the party complaining of the breach is entitled to receive…reasonable
compensation not exceeding the sum named or the penalty stipulated for.’
The
effect of fixing the sum - to determine the upper limit of compensation.
Nevertheless,
party seeking damages is also under the duty to mitigate the loss -
KABATASAN TIMBER EXTRACTION CO v CHONG FAH SHING [1969] 2 MLJ 6
In this case the appellants had contracted to supply timber to the
respondents to be delivered at the site of the sawmill to be erected by the
respondents. The timber was delivered in three lots. The second lot of 198 logs
and 4 of the 22 logs in the third lot were not delivered to the sawmill but
were dumped at a distance of more than 500 feet from the sawmill. The learned
trial judge gave judgment for the appellant for RM 9,892.41 being the balance
due under the contract and also awarded damages to the respondent on his
counter-claim for breach of contract for the sum of RM13, 192.40.
It was held to dismiss the appeal in respect of the claim and allowing
the appeal in respect of counter-claim by reducing the amount: it was the duty
of the respondent in this case to take reasonable steps to mitigate the damage.
There was no need for the respondent to have gone to the expense of buying logs
from elsewhere when the logs were lying a few hundred feet away from the
sawmill and all that was required was the additional expense for hauling them
up to the sawmill.
3.
SPECIFIC PERFORMANCE
The Specific Relief Act 1950
[revised 1974] (SRA) provides for the remedy of specific performance - which is
discretionary by nature. It is a decree of the courts directing the contract to
be performed according to its terms.
Sec 11 (1)
provides that SP may be granted
(a) trust cases and where no
adequate relief.
(b) when there is no
standard to value the damages
(c) no adequate relief
(d)
no monetary relief
S.11
(2)
in respect of agreement relating to land transactions
Sec
12
- presumption in cases of transfer of land
Sec
18
- court has power to award damages in lieu of SP
Sec
20
– lay downs the circumstances where contracts cannot be specifically enforced:
where
money consideration is adequate relief.
contract
with minute details.
contract
dependant on personal qualification.
contract
that will need supervision of the court.
contract
with uncertain terms.
contract
revocable by nature.
contract
made by trustee in excess / breach of their power
contract
made on behalf of public or private corporation in excess of its power.
contract
the involves performance of continuous duty extending over a period longer than
three years from its date.
contract
which a material part of the subject matter has ceased to exist even before the
contract is made
S.21 Specific Relief Act the
court has a discretion to refuse SP where the granting of it would cause undue
hardship to the defendant.
What
is ‘hardship’?
VENKATACHALOM CHETTIAR v
ARUNASALAM CHETTIAR [1953] MLJ 234
The
court held that a bargain that turned out worse than expected cannot constitute
hardship.
4.
INJUCTION
S.
50 SRA
Interlocutory
injunction – is used to maintain the status quo to the subject matter in a
pending suit. Mandatory injunction – is a court order requiring something to be
done.
Prohibitory
injunction – stopping something from be done or restraining order.
REMEDIES
Reviewed by Kamaruddin Mahmood
on
9:26:00 PTG
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