Introduction

In advising my client, the first thing we need to do is

determine whether there is a valid and existing contract
between X and Y

Whether there is valid and existing contract?

1. On the facts, there is valid and binding contract via

the written agreement dated _________made between
the parties.

2. On the facts, based on the letter of undertaking

dated ______________, we can say there is a valid
and existing contract.

3. On the facts, it can be submitted that there is a

binding oral agreement that took placed on _________
as there is a meeting of the mind between the X and Y.
Specifically ( lay down the terms). Although there is no
written agreement between the parties, pursuant to
Section 10 Contracts Act 1950, the oral agreement that
took placed on 1.7.2023 is valid and binding.

Although there is a valid contract between X and Y, X

may face challenges in proving its existence in court
due to it being an oral contract. Hence, X is advised to
subpoena the workers to testify, additionally use the
RM100k cheque as circumstantial evidence, or present
CCTV footage showing the tree transfer as proof.
 Collateral Contract

On the facts, the issue is whether X can rely on the oral

representation.

According to the parole evidence rule, Section 91 and

Section 92 Evidence Act 1950, provides if there is a
written agreement, no oral evidence can be given to
prove the terms of the contract.

However, X can rely on the exceptions under Section

92 EA which allow oral evidence to contradict, vary,
add, or subtract from the contract terms.

Section 92(a) Evidence Act 1950, since there is an

element of illegality such as fraud or misrepresentation
that can invalidate the agreement.
Section 92(b) Evidence Act 1950, since there is
separate collateral contract which is not inconsistent
with the terms of the of the written agreement -
Industrial & Agricultural Distribution v Golden Sand
Construction. Hence oral agreement can be
admissible under s92(b) EA1950 if the written SPA is
silent about the security features and does not
contradict the oral representation made by Y
However, If the written agreement contradicts the oral
representation, the X can rely on the on the common
law case of Tan Swee Hoe v Ali Hussain whereby
since Y oral promise induce X to enter into a contract,
the oral promise overrides any inconsistent subsequent
agreement. Hence it’s the judge discretion to decide
which contract prevail.

Section 92(c) Evidence Act 1950, since there us

separate oral agreement which is the condition
precedent with the written agreement – Tan Chong &
Son Motor v Alan Mcknight

On the facts, it can be submitted that the reason X

entered into the written agreement is that Y had orally
assured them that special security features would be
provided
Therefore the collateral contract can be said to be valid
and enforceable.
 Possible Cause of Action

Breach of Contract

X can sue Y for breach of contract. On the facts Y has

not (________________________________), hence Y
has refused or disabled himself from the performing the
contract entirely, under Section 40 Contracts Act 1950.

In Ching Yik Develeopment Sdn Bhd v Setapak

Heights Development Sdn Bhd, the court held that
the distinction between breach of condition and breach
of warranty under common law equally applies to
Section 40.

On the facts, since a fundamental terms has been

broken, thus would amount to a breach of condition
which goes to the root of contract.

X can affirm the contract and claim damages under

Section 74 Contracts Act 1950 and/or Section 76. If it's
merely a breach of warranty, X can only affirm the
contract and claim damages
If X wants to terminate the contract, a notice of
termination has to be given to Y as per Dream
Properties v Atlas Housing

On the facts, since X has already delivered the item to

Y/ completed his job, he would want to just claim
damages as there is nothing to affirm or terminate the
contract.

On the facts, since X is no longer interested in

purchasing the property, hence would just want to
terminate the contract and claim damages.

On the facts, since X property has been stolen, he

would just want to claim damages and there is nothing
to affirm or terminate the contract.

On the facts, X has moved out from the property, hence

the option to terminate the contract does not arise as
he would just want to affirm the contract and claim
damages.

On the facts, although X would want to proceed with

the sale but Y is unable to secure the loan to purchase
the property, X is advise to just terminate the contract
and claim damages.
On the fact, it is advisable for X to terminate the
contract and claim damages and there is no reason for
him to keep the forged painting and claim damages.

Breach of Implied Term

X would want to argue there is a breach of implied

term.

A term can be implied by custom and usage- Cheng

Keng Hong v Government of Malaysia / implied by
business efficacy test which is obvious to by stander –
Sababumi Sandakan v Datuk Yap Pak Leong /
implied by previous course of dealing

On the facts, the facts X has the obligation to

________________________
 Breach of Time

X can argue there is a breach of time. On the facts the

stipulated delivery date is on _________however the
item was delivered on ____________.

X can argue there is a breach of time. On the facts, the

letter dated 31.12.2015 stated that Y is to execute the
sale and purchase agreement within 2 weeks from the
date of the said letter

However the question that need to be asked whether

the delivery date on ___________is the time of the
essence of the contract.

However the question that need to be asked whether

whether the execution of the sale and purchase
agreement within 2 weeks from the date of the said
letter is the time of the essence of the contract

In Ganam v Somoo, merely having a date does not

mean time is of the essence of the contract.

In Tan Ah Kian v Haji Hasnan, the court established 3

situation where time is of the essence. On the facts the
relevant situation is where (____________)
-The contract must expressly say that time is the
essence of the contract.

-If the contract does not expressly state that time is the
essence, but after the delay, X can give reasonable
notice that the time is of the essence.

-The surrounding issue makes the time is of the

essence.

Issue

Whether letter of extension constitute a waiver of right

that time is of essence.

In Syarikat Eastern Plastic Industry v Syarikat Lam

Seng Trading, granting an extension can be construed
as a waiver that time of the essence. In this case,
parties took their time to negotiate before agreeing to
the extension of date.

In Siah Kwee Mow v Kulim Rubber Plantation, not

every extension constitute a waiver that time is of the
essence rather it just replaces the original. In this case
parties quickly reached a new extension.

On the facts, X can rely on Siah Kwee Mow case,

because the parties acted promptly whereby they
agreed on the extension within 3 days, from 14.6.2016
hence, such an extension does not constitute a waiver
that time is of the essence rather it just replaces the
original date,

If time is of the essence of the contract, then pursuant

to Section 56(1) Contracts Act 1950, the contract is
voidable whereby X can terminate the contract and
claim damages under Section 76(1) Contracts Act
1950. Alternative X can affirm the contract under
Section 56(3) Contracts Act 1950 and claim damages
under Section 76 Contracts Act provided notice is given
to Y to claim damages.

If time is not of the essence then pursuant to Section

56(2) Contracts Act 1950, the contract is not voidable,
and X can only claim for damages.

Even if time is deemed of the essence, X acceptance of

the oil on 5 February 2018, without immediately
terminating the contract, amounts to a waiver of the
time requirement, as confirmed in Sim Chio Huat v
Wong Ted Fui.

Exemption of Clause- Defence

Y would want to deny liability by relying on the

exemption clause.

On the facts, the exemption clause was brought to the

attention of X before or at the time he entered into the
contract. This is known as the doctrine of incorporation
– Olley v Marlborough Court.

The Court would construe the exemption clause

strictly, and this is known as the contra proferentum
rule. The exemption clause must be clear and
unambiguous seeking to cover all the liability in which
they want to exclude. If the there is an ambiguity the
court may interpret the exemption clause in favour of
Y.

Furthermore, pursuant to the doctrine of fundamental

term as in Sze Hai Tong v Rambler Cycle, Y cannot
exclude such a term because providing security for the
safety of goods is a fundamental term of the contract,
being the very purpose of X in depositing the goods in
the Y warehouse. Although the case of Sze Hai Tong
has been overruled by Photo Production v Securicor,
after 1956, it would not apply due to the cut-off date in
Section 3 of the Civil Law Act 1956

X can argue that the exemption clause is void under

Section 29 of the Contracts Act 1950 (CA 1950), as
established in CIMB Bank Berhad v Anthony
Lawrence Bourke & Anor. Section 29 CA, provides that
a clause that prevent someone completely from taking
a legal action would be void. Therefore, HB can claim
that TC cannot rely on the exemption clause to
exclude liability for the losses suffered.

Effect of Section 29
Section 29 CA, provides that a clause that prevent
someone completely from taking a legal action or limits
the time within which they can do so would be void.

In CIMB Bank Berhad v Anthony Lawrence Bourke

& Anor, the purchasers sued the bank for negligence
and breach of contract due to its failure to make
progressive payments, leading to the termination of
their agreement with the developer. The bank relied on
the exemption clause to limit its liability for certain
damages. The Federal Court held that exemption
clauses are void under Section 29 CA 1950 if they
prevent the innocent party from enforcing their rights
after a breach.
The question is whether the decision of CIMB is
correct ? This because the exemption clause in this
case did not completely prevent the Plaintiff from
taking legal action as it only limit their claims for
remote damages. The plaintiff could still pursue other
remedies, such as specific performance, injunctions,
and claims for non-remote damages. Therefore, the
exemption clause did not entirely restrain the plaintiff's
ability to sue. In my opinion he principle in CIMB v
Bourke is correct, its application to the facts of the
case is disputed.
The significance of this case is that all exemption
clauses are void in a contract. Despite the Federal
Court's decision, the exclusion clauses in Malaysian
contracts are still valid, as long as they do not
completely prevent a party from taking any legal action
against the defaulting party, as seen in Taveechi
Marine v Owners of the Ship Taveechi Marine

Part Performance

Following, K.P Kunchi Raman v Goh Brothers, since

X has substantially performed his side of the contract
by ___________________________, he can sue for
the agreed sum but he is still nevertheless liable for
the partial failure as he has not fulfilled his contract by
obtaining the necessary land office approval

Alternatively X can claim quantum meriut which is

based on a reasonable sum. This is because Y has
received benefit for the partial performance
In Hoening v Isaac, even if the performance isn't
substantial, if it provides a lasting benefit, some
compensation should be awarded for that benefit.
Section 71 essentially says that if someone does
something lawful for another person, and it’s not
intended as a gift, the other person must compensate
or return what was done if they have benefited from it."
In Dream Property Sdn Bhd v Atlas Housing Sdn
Bhd, the Court of Appeal acknowledged that Section
71 provides the principle of quantum meruit, but the
Federal Court clarified that Section 71 itself is not the
statutory provision for quantum meruit but
nevertheless. however, Federal Court recognized
quantum meruit as a common law principle.
X can recover all reasonable costs incurred before
YPRIVATE terminated the JVA, including RM5 million
for land conversion, RM2.5 million for the
Development Order, solicitor’s fees, and other related
expenses
 Voidable contract

Coercion

X can argue coercion under Section 15 Contracts Act

1950 since Y has threatened to commit an act which
is unlawful under the Penal Code or threatened to
detain Y property intentionally so he can enter into a
contract.

Economic Duress

X can argue there is a economic duress committed by

Y.

On the facts, it is clear the relationship is such in a way

where Y dominate the will of X -Universe Tank Ship of
Monrovia v International Transport Worker. Economic
Duress is not available if the parties have equal
bargaining power.

Section 73 Contracts Act 1950

Besides that Section 73 Contracts Act 1950 provides

that is a person have received money or goods due to
mistaken or coercion, that person must return or repay
for it.

In Chin Nam Bee v Tai Kim Choo, the Court held that
Section 73 Contracts Act 1950 does not only cover
Section 15 Contracts Act 1950 but also economic
duress.

Undue Influence

X can argue undue influence under Section 16(1)

Contracts Act 1950 since the relationship the parties is
such in a way where Y dominated the will of X to
obtain unfair advantage.

However if X has independent legal advice then its

arguable that there is no undue influence – Inche
Norian v Shaik Allie Omar

Relief

If the contract is influence by undue influence, then the

contract is voidable and the court can set aside the
contract absolutely or stipulate condition based on the
circumstances – Section 20 Contracts Act 1950
 Fraud/Misrepresentation

X can argue fraud/misrepresentation under Section

18(1) Contracts Act 1950.

Accordingly, Y before entering the contract has orally

assured to X that the __________________. Upon
relying on such representation, X has entered into an
agreement with Y. However, it turned out the
representation was false and as a result X suffered
damages.

Further it is immaterial whether Y has fraudulent

intention as Section 18(1) covers reckless, negligence
and innocent representation. However, if there is
evidence that Y has fraudulent intention, then as
alternative X may sue Y for fraud under Section 17
Contracts Act 1950. The burden of proof lies on X to
prove fraud and the standard of proof is beyond
balance of probabilities.
Silence

Silence does not amount to fraud. However there are

exception :-

Explanation to Section 17

There is a duty to speak (relationship such as family )

or where silent is equivalent to speech.

Exception to Section 19

Silence does not amount to fraud where the misled

party have the means of discovering the truth with due
diligence.

X are advised under the Exception of Section 19, Y

may argue that the contract is not voidable if the fraud
or misrepresentation could have been discovered with
ordinary diligence. However, since the bungalow was
still under construction and would only be completed in
24 months, X had no way to verify the security
features until they moved in the property
Orpheus is advised under the Exception of Section 19,
Cronos may argue that the contract is not voidable if
the misrepresentation or fraud could have been
discovered with ordinary diligence. On the facts,
Orpheus had a valid reason to rely on Cronos'
expertise, as Cronos is a well-known art dealer.
Moreover, Orpheus had no practical means of
verifying the painting’s authenticity, since it was in
North Korea, and it would have been unreasonable for
him to travel there

X advised to plead for both fraud and

misrepresentation.
Section 19(1) says when the consent to an agreement
is influenced by fraud or misrepresentation, the
contract is voidable at the option of the innocent party.
This means X have a choice to affirm or rescind the
contract. If X choose to rescind, they may seek
restitution under s65 and s66 CA1950. As established,
in Satgurprasad v Har Narain and Yong Mok Hin v
United Malay States Sugar Industries Ltd, whereby
Section 66 CA1950 applies not only to void contracts
but also to voidable contracts which has been
rescinded.
On the facts this not possible since X has already sold
the bungalow to a third party, and the title is
indefeasible.
This means Cronos would have to return the RM90mil
for the painting and the RM15mil for the commission to
Orpheus, while Orphesus have to return the forged
painting to Cronos
Therefore, as per Section 19(2), it is advisable for X to
affirm the contract and claim damages
Next the question is whether the Orpheus can claim
damages.
Following Haji Ahmad v Abdul Ghani ( Nagpur High
Court), the Orpheus cannot claim damages under
Section 76 for contract has been rescinded based on
fraud or misrepresentation as these has nothing to do
with the non-fulfillment of the contract. Arguably, this
applies to all voidable contracts.
However, Abdul Razak Bin Datuk Abu Samah v
Shah Alam Properties [Link] the court held that
Orpheus can claim damages for voidable contract
which is different from damages for breach contract.
For example, he could pursue a claim for tort of
deceit

Relief

Misrepresentation is governed by Section 18, whereby

a party enters into the contract due to an untrue
statement or promise made recklessly, negligently, or
innocently.

Section 19(1) says when the consent to an agreement

was influenced by misrepresentation, the contract is
voidable at the option of the innocent party. This
means the innocent party has a choice to affirm or
rescind the contract.

If the innocent party wants to rescind the contract, then

the remedies lie in restitution where under Section 65,
he has to restore the benefit to the Defendant. It
should be noted that Section 65 is silent on the
obligation of the guilty party.

Nevertheless, it is settled in In Satgurprasad v Har

Narain and Yong Mok Hin v United Malay States
Sugar Industries Ltd, whereby Section 66 CA1950
applies not only to void contracts but also to voidable
contracts which has been [Link] means the
guilty party also has to restore the benefits received
from the innocent party.

Next the question is whether the innocent party can

claim damages.

In Haji Ahmad v Abdul Ghani ( Nagpur High Court),

the innocent party cannot claim damages under
Section 76 for contract has been rescinded based on
fraud or misrepresentation as these has nothing to do
with the non-fulfillment of the contract. Arguably, this
applies to all voidable contracts.
However, Abdul Razak Bin Datuk Abu Samah v
Shah Alam Properties [Link] the court held that
the innocent can claim damages for voidable contract
which is different from damages for breach contract.
This means the innocent party cannot claim profits
such as expectation loss but can only claim wasted
expenses such as reliance loss and interest incurred.
Alternatively, If the innocent party affirms the contract,
following Section 19(2), the innocent party is entitled to
claim damages for fraud or misrepresentation.
Orpheus can sue Cronos for fraud under Section 17
CA, where the burden of proof lies on the Orpheus
and the standard of proof is on the balance of
probabilities.
However, there must be evidence that Cronos had the
intention to deceive Orpheus before the formation of
the contract; otherwise, the cause of action for fraud
would fail. Hence, Orpheus must prove that Cronos,
before entering the contract, had already made a plan
to forge "The Concert" by paying an art forger and had
the intention to deceive Orpheus, concealing its falsity
as established under Derry v Peek
Alternatively, Orpheus Orpheus can sue Cronos for
misrepresentation under Section 18. Similarly, for
misrepresentation to apply, it must have been made
before the parties entered into the contract. Before
entering the contract, it must be proved that Cronos
orally assured Orpheus that he would procure "The
Concert". Relying on such representation, Orpheus
entered into the agreement with Cronos. However, it
turned out that the representation was false, and as a
result, Orpheus has incurred damages.
Further, it is immaterial whether Cronos had fraudulent
intent, as Section 18 encompasses innocent, reckless,
and negligent misrepresentation
Orpheus is advised under the Exception of Section 19,
Cronos may argue that the contract is not voidable if
the misrepresentation or fraud could have been
discovered with ordinary diligence. On the facts,
Orpheus had a valid reason to rely on Cronos'
expertise, as Cronos is a well-known art dealer.
Moreover, Orpheus had no practical means of
verifying the painting’s authenticity, since it was in
North Korea, and it would have been unreasonable for
him to travel there
Orpheus is advised to plead for both fraud and
misrepresentation.

Void Contract

Mistake

Section 21 Contracts Act 1950, provides an agreement

is void if both parties makes a mistake to an essential.

Explanation to Section 21 Contracts Act 1950 provides

mistake as to value (price) does not make an
agreement void.

Section 22 Contracts Act 1950 provides that mistake

as to Malaysian law does not make a contract void.

Section 23 Contracts Act 1950, a unilateral mistake

does not make a contract void

Illegality

Y would want to argue that the contract void for

illegality under Section 24(e) Contracts Act 1950 which
makes the contract unlawful as they are immoral or
against policy
In Merong Mahawangsa v Dato’ Eskay, the Federal
Court held that obtaining a government contract
through personal connections is against public policy.
In this case, the facts suggest that the defendant did
nothing and just used his connection to obtain the
government contract.
On the facts, since X has secured the bridge project
with his connection with the Minister in Charge, the
contract is void ab initio for illegality.
On facts, although X is familiar with people at the Land
Office, he has still done legitimate work. He prepared
the necessary documentation for the land conversion
and subdivision application and attended multiple
meetings with the Selangor Land Office. Therefore,
the claim of illegality does not apply in this case. The
case of Merong Mahawangsa can be distinguished
from the present facts.

In Hopewell Construction v E & O Hotel, if there is a

minor technical breach of law, then it doesn’t make the
contract void. There has to be a major illegality for the
contract to be void.

In Theresa Chong v Kin Choon, contract which is

against public policy includes bribery, contract which
prejudice the state, tax evasion and impose restriction
of freedom.

However a transaction that by pass the bank policy

does not make a contract void as its not against public
policy.

Relief :
If the courts find there is illegality, Y is entitled to the
remedy of restitution under Section 66 CA 1950,
meaning that both parties must return any benefits
received from the contract. Y can claim the
RM250,000.00 that was paid to Sneaky.
However, following Patel v Mirza and as accepted in
Liputan Simfoni V Pembangunan Orkid Desa the
principle of Pari Delicto doesn’t apply and the parties
who knows illegality at the time of entering the contract
can claim restitution provided denying restitution would
cause greater injustice (the principle of proportionality).
On the facts, applying the principle of
proportionality, since the government contract was
never awarded to Y, allowing X to keep the
RM10,000,000 would lead to greater unjustice.
Therefore, the courts are likely to order restitution
and require X to return the money.
However, Y is advised that the Malaysian courts may
still refuse restitution under Section 66 CA 1950 in
light of the Triple Zest (2023) case whereby the court
will not assist parties with 'unclean hands' in cases
involving illegal contracts. Despite the principle in
Patel v Mirza, Y claim for restitution could be denied,
as the court may deem it unjust to provide restitution in
such circumstances."

Minor

Section 11 Contracts Act 1950 provides a person who

is at the age of majority, sound of mind and not
disqualified by the law is competent to enter a
contract.

The age of majority is 18 years old as per Section 2

Age of Majority Act.

Therefore contract made by minors are void. However

there are exception :-

a) contract that provide necessities to minor such as

education, training – Government of Malaysia v
Gurcharan Singh
b) contract to marry – Rajeswari v Balakrishnan

c) scholarship agreement.

Relief

Contracts made between minors are void. Although

Section 66 Contracts Act 1950 provide restitution for
void contract but according to Mohiri Bibee v
Dharmodas Ghouse, if an adult enter a contract with
a minor. The adult cannot recover the property and the
contract is unenforceable. However in Leha V Awang
Johari, the court ordered the adult to return the
purchase price to the minor and the minor vacate the
property.

This seems to suggest that if a minor who has

transferred the property to an adult, they can declare
the contract void and keep the property without
returning the property. But if a minor has paid money
to an adult following Leha they can recover the money
upon returning the property back to an adult.

Frustration

X can rely on frustration under Section 57(2) Contracts

Act 1950 since the act becomes impossible or unlawful
to performed.

To invoke frustration, X must meet a few requirements.

The outcome of the contract is radically different as the

parties originally agreed on a delivery date of 31
January 2018, but due to an unforeseen oil spill, it
became impossible to deliver the oils on that date -
Davis Contractor Ltd. v. Fareham.

It can be argued that the impossibility, caused by the

unforeseen oil spill, arose after the formation of the
contract, as established in Goh Yew Chew v. Soh
Kian Tee.
The frustrating event is also not self-induced as per
Ramli Zakaria & Ors v Government of Malaysia
because the spill was caused by another tanker, not
by Pesto.
The in ability to get a loan due to bad credit score is
likely to be self-induced.

A contract can be frustrated if a 3rd Party has obtained

an injunction – Shigenori Ono v Thong Foo Ching

Relief

As per Section 15 Civil Law Act, the contract becomes

void at the date of frustration.

The remedies that would be available to X is restitution

under Section 66 CA 1950.

Any payment made by X before the frustration can be

recovered. However, Y can still claim for reasonable
expenses incurred.

The remaining sum cease to be payable.

However if Y has provide valuable benefit can still

recover a just sum even if the contract has been
frustrated. The value of the benefit would be assessed
after the frustrating event – B.P Exploration Co
(Libya) Ltd v Hunt

But if the subject matter has been destroyed, then

there is no valuable benefit conferred – Appleby v
Myers

Force Majeure Clause

If there is a Force Majeure clause, the other party

cannot claim frustration since it’s a foreseen event –
Chan Buck Kia v Naga Shipping Trading

Unjust Enrichment
X can rely on the doctrine of unjust enrichment.
Following Dream Property Sdn Bhd v Atlas Housing
Sdn Bhd, Y has been enriched with RM10 million/
enhanced value of the land (RM20 million).
The enrichment came at X expense, as the RM10
million was paid by X/
Xis the one who was responsible for the conversion
and development of the land from agricultural to
commercial/mixed development by submitting the
applications and incurring expenses.
It is unjust for Y to retain the RM10 million, as X was
not awarded the project and the contract was not
fulfilled/ It is unjust for Y to retain the benefit without
compensating X
There is no defense that Y can rely on to extinguish or
reduce his liability for restitution (e.g., no change of
position or bona fide purchaser defense).
In Dream Property, the Federal Court, in determining
whether there is unjust enrichment, adopted the civil
law approach, that is, the absence of basis principle.
Therefore, X is entitled to restitution unless Y can
establish a valid legal basis to retain the RM10
[Link] court finds the principle of unjust enrichment
applies, Y needs to make the restitution by returning
the sum of RM10,000,000 to X
In Dream Property, the Federal Court, in determining
whether there is unjust enrichment, adopted the civil
law approach, that is, the absence of basis principle.
Therefore, XYZ is entitled to restitution unless ABC
can establish a valid legal basis to retain the benefit. If
the court finds that the principle of unjust enrichment
applies, ABC will be required to make restitution to
XYZ. This restitution will include the costs incurred by
XYZ amounting to RM7.5 million and the shared of the
increased value of the land
 Remedies

Injunction

X can apply for interim prohibitory injunction from the

Court to prevent Y from selling the land to Z pending
disposal of the case.

X is advised to apply for an injunction under Section

52(1) of the SRA 1950 and to apply for the injunction,
XYZ must comply with the procedural requirements of
Order 29 of the Rules of Court 2012.
In deciding whether to grant an injunction, the court is
guided by the case of American Cynamide v
Ethicon. On the facts, X has a cause of action for
breach of contract _____________ and there is a
serious question to be tried, hence it’s important for
the court to maintain the status quo while the matter
goes to trial.

Based on the balance of convenience, if injunction is

refused, X would suffer hardship as they have already
incurred expenses such as paying legal fees. Further
X has obtained a bridging loan of RM700,000 million.
Once the land has been transferred to the third party, it
would be difficult for X to challenge the indefeasibility
of title. On the other hand, in injunction is granted, Y
would just suffer a minimal lose and further Y would
still be able to benefit from X. Lastly, X need to give an
undertaking of damages to Y.
Lastly, X needs to give an undertaking as to damages
to ABC and there has to be a prompt application.
 Private Caveat

X is advised to enter a private caveat on the land

under Section 323(1) NLC, however to do that, he
must show that, X must have a caveatable interest
otherwise, the caveat may be removed by Y under
Sections 326 or 327 of the NLC 1965

On the facts, a joint venture agreement does not grant

a caveatable interest, even if it explicitly allows for the
lodging of a caveat, as per Perbadanan Setiausaha
Kerajaan Selangor v Metroway Sdn Bhd & Anor
[2003]. Furthermore, rights under a joint venture
agreement that give rise to monetary claims or rights
in personam are not sufficient to create an interest in
land, as per Score Options Sdn Bhd v Mexaland
Development Sdn Bhd.
Hence, it’s likely that X does not have a caveatable
interest to lodge a caveat
G is advised to enter a private caveat on the land
under Section 323(1) NLC, however to do that, he
must show that,G must have a caveatable interest
otherwise, the caveat may be removed by A under
Sections 326 or 327 of the NLC 1965
On the facts, following Macon Engineering v Goh
Hooi Yin), G as a purchaser based on the negotiation
and proforma of purchase can enter a private caveat
on the land concerned as he is claiming a right to title
hence he has a caveatable interest

Specific Performance

X is thereafter advised to affirm the contract and apply

for specific performance instead of terminating the
contract and claiming damages, as X has already
incurred significant costs in performing the contract.
Xmust first determine if there are any bars to specific
performance under Section 20 of the Specific Relief
Act 1950 (SRA 1950). Y can argue that specific
performance is unnecessary, as monetary
compensation would be sufficient, in accordance with
Section 20(1)(a) of the SRA 1950. However, X can
rely on Section 11(2) SRA 1950 and argue that, since
the contract involves immovable property (e.g.,
entitlement to housing units after construction), there is
a rebuttable presumption that monetary compensation
is insufficient. If Y cannot rebut the presumption,
specific performance can be granted, as per Sekemas
Sdn Bhd v Lian Seng. Nevertheless, Y may argue
that the development under the JVA is time-
consuming, and specific performance cannot be
granted for a continuous duty extending over more
than three years, as per Section 20(1)(g) SRA 1950.
X must explicitly plead specific performance in the
Statement of Claim (SOC), as required by Section
18(1) SRA 1950. Additionally, X should plead for
damages either in lieu of or in addition to specific
performance, as outlined in the Federal Court
decision in Lee Hoy v Chen Chi.
If the court grants specific performance, X can still
claim damages in addition to specific performance for
the costs and expenses incurred in commencing the
civil action for specific performance action.
If the court refuses specific performance, X can still
claim damages as per Section 74 CA in lieu of
specific performance.
However, X is advised that the court's jurisdiction to
grant specific performance is discretionary, as per
Section 21 of the Specific Relief Act 1950

Damages

The damages suffered by X can be divided to

pecuniary losses and non-pecuniary losses.

X has suffered pecuniary losses in particular reliance

loss (_______________) and expectation loss
(_______________).

X also has suffered non pecuniary losses that is

(_________________)
Loss of Reputation – James Yu v Raffles Hotel
Contract pleasure – Jarvis v Swan Tours
Physical Pain- Hobbs & Wife v The London & South
Western Railway Company

Example what is Reliance Loss.

- As a result passport got missing, air ticket &

monetary lost
- RM250,000 advance payment and cost of timber
logs
- RM250,000 deposit payment
- Cost of earth excavation
- Machine – X has paid money buy have yet to
received the machines
- RM100,000 contract sum
- Replacement of cost of water pipes and cable
 - RM1.5 million cost of rebuilding the house
- RM90,000 price of forged painting
- RM15,000 commission paid.

Example of Expectation Loss

- RM40,000 profit arising from the lucrative contract

- Loss of profit of the timber- as there is a reason for
the timber to be transport
- In the event there is an appreciation in value of the
house
- RM350,000 for work being done

While the case of Cullinane v British "Rema"

Manufacturing Co Ltd provides that X can only claim
either reliance or expectation losses, However,
Hydraulic Engineering v WJ Harte & Son Ltd allows
XYZ to claim both, as long as there is no overlap
between the losses.
On the facts, there is no nothing to suggest that there
is an overlapping, hence X can claim for reliance
Damages are claimable but there are subject to the
principle of causation, remoteness and mitigation.

CAUSATION
On the facts, has Y not breached the contract by
_________________, X would not have the incur the
damages as mentioned above -Section 74(2)
Contracts Act 1950.

REMOTNESS OF DAMAGES

X must prove that damages are not to remote as

stated in Section 74(1) which mirrors the principle in
Hadley v Baxendale.

The losses of _____________________would fall

under first limb which are ordinary losses that arise in
the usual course of event.

The losses of_______________________ fall under

second limb which are extraordinary losses that arise
within the reasonable contemplation of the parties
when the time they entered into the contract.
The loss of ____________________________may
fall under the second limb within reasonable
contemplation when the parties entered into the
contract provided Mrs. Gullible must have disclosed
her pre-existing sickness to ECEG. Without this
disclosure, the claim is likely too remote to succeed.
MITIGATION

X must take reasonable step to mitigate his loss and

must not incur unreasonable expense – Explanation to
Section 74. (Kebatasan Timber Extraction Co v Chong
Fah Shing)

TAX FACTOR

On the facts, the tax factor would be relevant, if the

court is to award expectation loss where in the
damage awarded will be deducted for tax payable but
it’s for Y to prove it.

CONTRIBUTORILY NEGLIGENCE

On the facts, Y can plead contributory negligence

since (_________________)
Forfeiture of Deposit

As an alternative to claiming damages under Section

74,The question is whether X can forfeit the deposit
sum of RM50,000.

In Cubic Electronics Sdn Bhd v Mars

Telecommunication Sdn Bhd, the Federal Court held
that Section 75 Contract does not only applies to LAD
clauses but also to deposit.

Therefore, the RM50,000 paid by Y to X would be

considered a deposit and is subject to Section 75.
However a deposit that is about to forfeit is subject to a
reasonable compensation test under Section 75
Contracts Act. X need to show that the sum forfeited is
reasonable sum. If it’s excessive, then Y would have
the burden of proving that the forfeiture is
unreasonable.
Following Sun Properties Sdn Bhd v Happy
Shopping Plaza Sdn Bhd, the deposit is generally
10% of the contract price as affirmed in Morello v.
Jagues.
Hence, it can be submitted that the sum of RM50,000,
being the 10% deposit of RM5,000,000, is a
reasonable sum to be forfeited and not excessive.