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TUTORIAL 1-

UPP4622 _2016_2017

Instructions:
1. Each group needs to complete this tutorial questions and submit a copy of the answer on
the tutorial date (Please put in the brown file)
2. The groups also need to have the soft copy of their answer for presentation purposes.
3. I will choose any group at random basis to present their opinion.

Question 1

Syarikat Happy Bhd. (the company) was interested in engaging Sarah Zue a popular and Best
Female singer in Malaysia to perform at their concert to be held on 16.9.2016 in conjunction
with the Malaysian Day. On 15.2. 2016 the company made an appointment with Sarah and
she agreed to perform at the concert.

An agreement was entered into between the company and Sarah on 24.2.2016 whereby Sarah
was to perform at the concert for a payment of RM250,000/-. She also agreed not to perform
at any other concert on the particular date. Pursuant to the agreement, the company paid
Sarah an advance of sum RM60,000/-. In the event of failure to perform, she undertook to
return the advance payment and pay the company a sum of RM200,000/- as liquidated
damages.

One week after the signing of the agreement, the company commenced preparation for the
concert and estimated to make a profit of RM1.5 million after all expenses. Advertisements
were inserted on a monthly basis in all major newspapers commencing March 2016 for
RM10,000 a month. A sum of RM15,000/- was spent every month from March to August
2016 for the purpose of promotion of the concert.

The company also printed brochures and advertised in TV3, RTM and Astro Ceria channels
and this cost them RM8,000 and RM45,000/- accordingly. Tickets for the concert were
printed in March 2016 and a sum of RM25,000/- was incurred for the printing costs. By the
end of August 2016 the tickets were sold out. Everything went well as organised. The
company was happy with Sarahs full commitment. She attended all the rehearsal sessions
conducted by the company in June and July 2016.

On 3 September 2016, Mr. Joe, the Managing Director of Syarikat Happy Bhd., received a
called from Sarahs manager informing him that Sarah would not be able to perform at the
concert as she had decided to perform in Singapore for another big concert. She was invited
to perform at that concert by the organiser on 31 August 2016 and agreed to the invitation.
She believed performing at the Singapore Superstar Concert would make her a worldwide
singer comparing to the Malaysian Day concert in Malaysia. She was paid twice for that
concert and the organiser promised to team up him with famous Singaporean singers.

The Company was furious with Sarahs decision. However, as the date of the concert was
around the corner, they had no choice but to cancel the concert. They could not find a
replacement artist for the concert. Furthermore, the ticket buyers intention only to see
Sarahs performance. She is their favourite artist/ singer. The company has to announce the
cancellation in the television and published it in newspapers. The ticket holders demanded the
refund of their money. The company suffered severe losses due to the last minute cancellation
of the concert.

The company has retained your firm to seek an advice relating to Sarahs liability and
whether the company can sue Sarah for breach of contract.

Write an opinion advising the company on their legal position.


LAW CHAMBERS
Advocates and Solicitors
Peguambela & Peguamcara
No. 30, Jalan Mewah, Taman Bunga Raya, 75450 Melaka.
Tel: 06-2523319 Fax: 06-2523321/3328
Email: lawchambers@gmail.com
Partners:
Law Min LL.B (Hons) MMU
Chew Hui Xian LL.B (Hons) MMU
Tan Sin Reei LL.B (Hons) MMU
Er Pei Lu LL.B (Hons) MMU
Liew Wan Ying LL.B(Hons) MMU
Toh Boon Tiong LL.B (Hons) MMU

Our Ref : C/T4/T4G3/2016/TSR/TBT


Your Ref : Please Advise

Date: 23 November 2016

Syarikat Happy Bhd.,


No, 2A, Jalan Usir 1/2,
75000 Melaka Raya,
Melaka Bandaraya Bersejarah.

Attention: Mr. Joe, Managing Director

Dear Sirs,

Re: ADVISING ON BREACH OF CONTRACT BY MS SARAH ZUE TO PERFORM


AT THE CONCERT ON 16 SEPTEMBER 2016

We refer to the interview which has been conducted between our Ms. Tan Sin Reei and your
Mr. Joe on the even date or on 18 November 2016.

We are instructed to advise your company on the liability of Ms. Sarah Zue and the possible
claim and damages that could be made against Sarah Zue due to breach of contract for non-
performance at Syarikat Happy Bhd.s concert to be held on 16.9.2016.

We enclose herewith copies of the relevant documents we have in hand as follows: or


i. Agreement between Syarikat Happy Bhd and Ms. Sarah Zue dated on 24.2.2016
ii. Receipts of payment for advertising for the concert on newspapers and TV
channels
iii. Receipts of payment for Printed brochures of the concert
iv. Receipts of payment for Printed tickets of the concert
v. Receipts of payment for Notice of cancellation of the concert in TV channels and
newspapers
Before we proceed, we would like to highlight the material facts of the case as follows:
i. An agreement was entered between Syarikat Happy Bhd and Ms. Sarah Zue on
24.2.2016 in which Ms. Sarah agreed to perform at the companys concert for a
consideration of RM250,000. Pursuant to the agreement, a sum of advance
amounting to RM 60,000 has been paid to Ms. Sarah and Ms. Sarah undertook to
refund such advance payment and liquidated damages amounting to RM 200,000
in the event of failure to perform on 16.9.2016.

ii. Ms. Sarah agreed not to perform at any other concert on 16.9.2016.

iii. Prior to 16.9.2016 set for the concert, RM70,000 spent by the Syarikat Happy
Bhd. for advertising the concert in the major newspapers; RM90,000 spent for
promoting the concert; printed brochures and advertisements in TV channels went
for another RM8000 and RM45,000 respectively; and the printed concert tickets
went for additional RM25,000. All the money spent are borne by Syarikat Happy
Bhd.

iv. Ms. Sarah attended all the rehearsal sessions conducted by the company in June
and July 2016.

v. On 3.9.2016, a call received from Sarahs manager by Mr. Joe, informing that Ms.
Sarah would not be able to perform at the scheduled concert on 16.9.2016 due to
the reason that she would have another bigger concert in Singapore

vi. Syarikat Happy Bhd. had no other choice but to cancel the concert on 16.9.2016.
As the result of cancellation, Syarikat Happy Bhd. suffered severe losses.

The issues in this case are as follows:


a. Whether there is a breach of contract by Ms. Sarah Zue following her refusal to
perform at the agreed concert on 16.9.2016?

b. Whether Syarikat Happy Bhd. can claim damages from Ms. Sarah for the losses
incurred arose naturally in the usual course of things from the breach of contract?

Recommendation and summary of the first issue are as follows:


1. The relevant section will be section 40 of Contracts Act 1950, in which when a party
to a contract has refused to perform, or disabled himself from performing, his promise
in its entirety, the promisee may put an end to the contract. Any non-performance
contract of either party will entitle the other party to rescind the contract.

2. This case is very much resembling the illustration (a) provided in section 40, in which
Ms. Sarah Zue willfully absent herself from performing at the agreed concert on
16.9.2016. The law allows the innocent party, who is Syarikat Happy Bhd. at liberty
to put an end to the contract.

3. Hwa Chea Lin & Anor v Malim Jaya (Melaka) Sdn Bhd [1996] 1 LNS 70; [1996] 4
MLJ 544 held that fundamental breach of contract allows the innocent party not only
damages but also entitled to rescind the contract.
4. According to Ching Yik Development Sdn Bhd v Setapak Heights Development Sdn
Bhd, when the term breached is fundamental to the contract, the innocent party is
entitled to treat himself as discharged from further obligations under the contract.

5. The case of Leong Weng Choon v Consolidated Leasing (M) Sdn. Bhd [1998] 3 CLJ
619 made it clear that under section 40 of Contracts Act 1950, respondent could
either elect to terminate the agreement and recover damages under section 7 of the Act
or it could ignore the breach by treating the contract as alive and subsisting.

6. In the case of Poussard v Spiers and Pond (1876) 1 QBD 410, plaintiffs inability to
perform at the opening and early performance in opera went to the root of contract
and thus entitled the defendant to repudiate the contract entered.

7. Applying the principles stipulated above, Ms. Sarahs refusal to perform at the concert
scheduled on 16.9.2016 was essentially a fundamental breach to the agreement dated
on 24.2.2016 and went to the root of the contract. Thus, based on the cases law above,
we are of the view that your company, Syarikat Happy Bhd. is entitled to repudiate
the contract dated on 24.2.2016 and discharged from further obligations due to Ms.
Sarahs breach.

Recommendation and summary of the second issue are as follows:


1. As pursuant to the contract made between your company, Syarikat Happy Bhd. and
Ms. Sarah Zue dated on 24.2.2016, Ms. Sarah undertook to pay the Syarikat Happy
Bhd. a sum of RM200,000/- as liquidated damages.

2. Pursuant to S.75 of the Contracts Act 1950, the Federal Court decision in Selva
Kumar a/l Murugiah v Thiagarajah a/l Retnasamy had laid down the principle that
s.75 of the Contracts Act should be given a strict interpretation whereby in cases
where damages for actual loss is not too remote and could be assessed by settle rules,
the plaintiff must prove the actual loss suffered. Thus, since the present loss by your
company is quantifiable, actual loss incurred from the breach still need to be proven
in order to claim damages.

3. S.74(1) of the Contracts Act 1950 clearly stipulates that the payable damages include
the damages or loss caused to the injured party arose naturally in usual course of
things from the breach and the damage that is likely to result from the breach.

4. Based on the principle above, your company would need to prove that all the costs
and damages incurred are arising out of the breach by Ms. Sarah for non-performing
in the agreed concert at 16.9.2016. and the damages are not too remote.

5. Based on the case of Tham Cheiw Toh v Associated Metal Smelters Ltd [1972] 1
MLJ 171, it was held by Ali Federal Court Judge that, the breaching party is not liable
for the payment of damages for loss of profits unless there is clear evidence before the
court that the breaching party as a reasonable man could foresee that such a loss of
profits is likely to result from his breach. The breach in the present case would be Ms.
Sarahs non-performance at the agreed concert on 16.9.2016. As such, since Ms.
Sarah had breach the contract which goes to the root of the contract, and there is an
estimation that your company will make RM1.5 million profit out of this concert, we
are of the view that it would be reasonable for your company to make a claim for
general damages for RM1.5 million for the loss of expected profits which is
foreseeable by Ms. Sarah. Besides, your company is also entitled to claim for the cost
incurred for the announcement in cancelling the concert in newspapers and TV
channels.

6. Besides, your company would also be entitled to claim for special damages for the
expenses in preparing the concert which requires a precise amount to be pleaded on it.

Claim for special damages are as follow:


Item(s) Calculation Total
Advertisement (from March to RM10,000 x 7 (months) RM70,000
Sep)
Printed brochures RM8,000 RM8,000
Advertisement in TV3, RTM and RM45,000 RM45,000
Astro Ceria Channels
Printing of Tickets RM25,000 RM25,000
TOTAL RM148,000.0
0

In short, we are of the view that there was a clear breach of contract dated 24.2.2016 by Ms.
Sarah and the above remedies is plausible for a civil suit against Ms. Sarah.

The opinion that follows is based on the instructions received and the background facts
provided to us as set out above. We have relied on the accuracy of the instructions given to us
and the completeness of the documents provided. Naturally the views we have expressed in
this opinion may need to be revised if the facts upon which they have been based should
change.

We trust the above is sufficient for your purpose. Should you require further clarification or
assistance, please do not hesitate to contact us at our contact number stipulated above.

Thank you.

Your faithfully,

Law Chambers
Law Chambers
Question 2

Ms. Isabel was 9 months pregnant. It was her first pregnancy. She and her husband, Mr. Tony
were highly excited at becoming parent to their first baby after more than three years of
marriage. Her pregnancy progress to 41 weeks. Her due date is supposed to be on 30.8.2016.
On her due date she went to Hospital Berserah for her final antenatal appointment. She was
checked by the Houseman student and a staff nurse, who had experience in the field for about
15 years and was told that her baby and her condition is fine. She was told to go home and
come for further check up a week after.

Three days later, Ms. Isabel felt pains and went back to the Hospital, the Houseman student
again checked the baby heartbeat and told her that the uterus contracting and that the pains
were normal at that stage and the baby was doing good. She heard the staff nurse
conversation with the houseman student and told him that the heartbeat is not normal.
Despite that, the houseman student just ignored the advice and asked her to go home. She was
given next appointment date 3 days later for an ultrasound. When requested to see a
gynecologist expert, and or medical officer, her request was turned down with excuses. She
felt disappointed and went back with pain.

Around 3a.m. on the next day, she felt the pain again and pressing her stomach with hot
water, she expelled a chunk of placenta remains. Mr. Tony called the Hospital and the doctor
in charge, without asking further of her wifes condition, the doctor on call asked Mr. Tony to
bring Ms. Isabel for an ultrasound on Monday 5.9.2016. However, looking into his wife
serious pains, he drove her to the Hospital immediately, he got there around 4a.m. and met a
long queue of patients to be attended to at the emergency section. Mr. Tony forced her way
and met doctors on call and showed them the expelled placenta but the doctors do nothing to
expedite the treatment and did not show an empathy. They were asked to wait for their turn,
and only around 6.40a.m. she was admitted. On 4.9.2016, Ms. Isabel was taken for scanning,
after which it was revealed that her baby had died in the womb.

Mr. Tony alleged that the negligence of the staff at the Hospital had led to the death of their
baby. According to the Hospital record, by Dr. Rajan, the gynecologist expert, the procedures
carried out were normal and standard practice has been used by the Houseman student and
the doctors on call in the situation.

He dismissed allegations of negligence by the hospital and said that the reason for the baby's
death was unclear. " Ms. Isabel was 41 weeks pregnant and if she had delivered, chances of
survival of the baby would have been slim. She developed labour pain in the middle of the
night and we have to do an ultrasound to determine the babys condition before further
treatment. Further, the report showed that both the mother and baby were healthy, therefore
the cause for death is unclear. There has been no negligence in the hospital.

Mr. Tony was quote to say: My wife was finally discharged and till to date nobody from the
hospital ask about my grievances or complaints, and offer their sympathy at our loss. I am
afraid my wife has become frigid and uninterested in bearing another child, all because of the
trauma she passed through and I could have lost my wife too due to the negligence of the
hospitals staff and procedure of treatment which is not reasonable.

Write an opinion advising Ms. Isabel and Mr. Tony of their legal position.