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.