According to Anson, a contract is a promise or set of promises for the breach of which the law gives a remedy or the

performance of which the law in some way recognizes as a duty. A contract consists of an actionable promise or promises and every such promise involves at least two parties. When two or more parties entered into contract, each of them has duties or obligations arising from the contract. When the contract is discharged, it is actually terminated. Once a contract is discharged the contracting parties are free from further obligations under the contract. The contract may be discharged by any one which either by performance of the contract or by consent or agreement between the parties of the contract, or by impossibility or frustration, or by breach of contract by any one of the parties. The contract is discharged by performance occurs when the both parties has done performs the promise. In order the contract discharge by performance, it must fulfill the requirements which are the time of performance must be fulfill. As stated in Sec 56 (1) CA when a party to a contract promises to do a certain thing at or before a specified time, or certain things at or before specified times, and fails to do any such thing at or before the specified time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promise, if the intention of the parties was that time should be of the essence of the contract as stated in the case of Sim Chio Huat V Wong Ted Fui. In addition if there is a place being specified for the performance of the contract, the parties must perform the contract at the place specified as stated in Sec. 50. Furthermore, the contract must be performed by the promisor himself as stated under Sec.41. Lastly, if the promise accepts performance from third party, he cannot enforce it anymore against the promisor as the example case are Hj. Nik Ishak b Hj Nik Daud V Nik Zainab bt Nik Jaafar and Chinn Swee Onn V Puchong Realty Sdn. Bhd. Secondly, the contract may discharge by agreement. The contract is created by agreement, it also be terminated or discharged by agreement of all the parties as stated under Sec. 63. The discharge can be categories into novation, alteration, rescission and remission. Thirdly, the contract may discharge by frustration where it is occurs into two situations which are the contract is in itself impossible to be performed and the contract becomes impossible to be performed after it has been made. Lastly the contract is discharge by breach of contract where it is occurs when the promisor fails to perform his obligations. The issues arise under this question are; First issue: Whether the contract between GWA (Ganda Wang Anda) and Chan & Shan be discharge by the alteration.

After the year 2000, Chan & Shan face financial problem, they tell to the GWA that they only can pay their debt only RM 1000. But, after next year, the GWA need money and ask the Chan & Shan to paid their debt with the amount of RM20000 that state at the contract. Therefore, GWA has made an alteration in the contract whereby GWA agreed to accept postponement for a year of payment of the RM 20000 due and the waiver of all interest payable. For example in illustration (b) section 63 provides as follows; A owes B RM 10000 and enters into an arrangement with B whereby he gives B a mortgage of his A estate for RM 5000 in place of the debt of RM 10000. This new contract extinguishes the original contract. In this situation, the contract between GWA and Chan and Shan has been alter by both parties. Therefore, GWA cannot claim the RM 20000 in the year of 2004 because of the new agreement that has made before 2003 and GWA has to follows the new agreement and it was difficult to make a new contract. Second Issues: Whether the GWA can issues against contract discharge by agreement in form of remission? The issues in this problem are whether the contract made between Chan & Shan and also GWA was discharge by agreement. The principle which can be used to solve this problem is discharge by remission. A contract is created by agreement. It can also terminated or discharge by agreement of all parties. Section 64 provides that, remission is an alteration to the original terms of a contract which reduces the contractual obligation of the parties to the parties to the contract either partly or wholly. Every promise may dispense with or remit, wholly or in part the performance of the promise made to him or may extend the time for such performance or may accept instead of it any satisfaction which he thinks fit. This can be seen in illustration to section 64: Illustration (b) to s 64: A owes B RM5000. A pay to B, and B accepts, in satisfaction of the whole debts, RM2000 paid at the time and place at which the RM5000 were payable. The obligation to pay whole debt is discharged. Illustration (c) to s 64: A owes B RM5000. C pays to B RM1000 and B accepts them, in satisfaction of his claim on A. This payment is a discharge of the whole claim against A.

Illustration (d) to s 64: A owes B under contract, a sum of money, the amount of which has not been ascertained. A, without ascertaining the amount gives to B, and B in satisfaction thereof, accepts the sum of RM2000. This is discharge of the whole debt, whatever may be its amount. A case to refer is the case of Pan Ah Ba & Anor, v Nanyang Construction Sdn Bhd (1969) 2 M.L.J. 181. In this case the Federal Court allowed an appeal by the estate of a deceased to recover the deposit paid to the respondent company for the purchase of land and premise on the ground that the respondents letter to the deceased was dispensation within the meaning of section 64. Under this issue it shows that there was a legal discharge a contract in term of remission by both parties. It stated that whether GWA requested Chan & Shan to revert to their original agreement or not. From the fact of the case, GWA totally cannot revert to their original agreement because they were agreed to made discharge contract in term of remission. In this case, GWA agreed with suggestion made by Chan & Shan where, only RM1000 of the loan could be paid by their respective wives and this would be consider as full and final settlement of what they owed. GWA failed to request Chan & Shan to pay the outstanding installment and interest owing without further delay since GWA experienced severe financial problem. The agreement to discharge the contract here happens in the second terms of debt where both parties agree with a final settlement to pay a debt where GWA got RM1000 from respective wives. Therefore GWA cannot issues back on the discharge contract in term of remission again in year 2004. As a result, GWA cannot make a new contract with Chan & Shan since they were made legal contract before as both parties agreed with all consideration. Third issue; whether the debt by Shan & Chan can move on part of payment by third party?

Under the principle of consideration, the court recognizes a consideration by a third party than the promisee even though the agreement is made by the promisor and the promisee. However, under English law of contract, a waiver of a right that is not supported by consideration is void. In, Malaysia, exception to this general rule is provided under section 64 which stated that every promisee may dispense with or remit wholly or in part the performance of the promise made to him or may extend the time for such performance or may accept instead

of any satisfaction which he thinks fit. This provision laid down the rules of performance. Under this provision, waiver of performance without any consideration is valid. One of the methods of waiver performance in case of GWA and Chan & Shan is part payment by a 3 rd party in discharge of a debt was allowed.

In this problem, Chan & Shan unable to pay the outstanding installment and interest owing that is burden but they suggested that only RM 1000 of the loan could be paid by their respective wives and this would be considered as full satisfaction of the debt. It can be seen here that, there was an agreement with GWA (promisor) and Chan & Shan (promisee) because GWA has already agreed to and accepted payment of a lesser sum than the debt by respective wives, in full satisfaction of the Chan & Shan debt. This payment of RM 2000 is a discharged of the whole claim. This case will be covered by section 64 that provides several ways of waiver of performance that is part of the payment by a 3rd party in discharge of debt is allowed. It is referring to the illustration (c) to section 64, A owes B RM 5000. C pays to B RM 1000 and B accepts them, in satisfaction of his claim on A. This payment is a discharge of the whole claim.

The case to refer here is Hirachand Punamchand v Temple. It was held that where a third party enters into an agreement with a creditor by which the creditors accepts payment of a lesser sum than the debt, in full satisfaction of the debtors obligation, the creditor can sue the debtor for the difference. Another cases is Kerpa Singh v Bariam Singh, B owed K $8,869. B son wrote a letter to K offering $4000 in full satisfaction of his fathers debt. Bs son endorsed a cheque for the amount, stipulating that if K refused to accept his offer. K must return the cheque. Ks legal advisor cashed the cheque and retained the money. They then proceeded to secure the balance of the debt. The court held that the acceptance of the cheque from the debtors son in full satisfaction precluded them from claiming the balance.

When GWA agreed for the payment of RM 1000 from the Chan & Shan wife as the payment of a lesser sum in the satisfaction of greater sum precluded promisor from claiming the balance. Thus, the payment is a discharge of the whole claim.

Fourth Issue: Whether GWA can revert to their original contract or not?

Agreement is needed as it is one of the essential elements in making a valid contract and binding by law (section 2(h) Contract Act 1950 stated that an agreement enforceable by law is a contract) and in order to form an agreement there must be an offer or proposal made by one party(offeror or proposer) and the acceptance by the other party(offeree or acceptor) therefore, the same goes to the discharging of a contract must be made through an agreement done by both parties involves whereby this is stated in the section 63 and section 64 in Contract Act 1950 which are (sec.63 Contract Act, if the party of the contract is agree to substitute a new contract for it, or to rescind or alter it, the original contract need not be performed) and (sec.64 Contract Act, every promise may dispense or remit, wholly or in part, the performance of the promise made to him, or may extend the time for such performance of the promise made to him, or he may extend the time for such performance, or may accept instead of it any satisfaction which he thinks fit). The cases that can be referred is Kerpa Singh v Bariam Singh which the decision made by federal court as the appellant could not sue the respondent for the balance of the debt. This is because the appellant had accepted payment of the cheque for $4000 from the respondents son in full satisfactions of the debt. By referring to this case, Chan & Shan had a contract with Ganda Wang Anda (GWA) which makes them to oblige to their contract. They have agreed to the payment of RM100, 000 with the 5years period which is from year 2000 to year 2004. However, in the particular circumstances had happens after the first year of repayment which is Chan and Shan facing the lengthy industrial dispute which makes them are unable to pay therefore, as Chan and Shan made known to the GWA about this situation then GWA had postpone the repayment for that year and waiver of all the interest for that year also. However the unfortunate incident happen of the GWA side about 4 month later which makes GWA requested to Chan and Shan to pay the outstanding installments and the interest that they have postpone before as soon as possible and that makes Chan and Shan refused to pay. Whereby, Chan and Shan had come out with the suggestion to pay RM1000 by their respective wives instead of paying the full amount as the full and final settlements of what they owed then, GWA agreed hence, the second repayment is done.

In year 2003, the economic situation has improved and Chan and Shan had successfully running their business then which makes GWA requested to change back into their original agreement in term of repayment for the next RM20000 includes interest to be pain for year 2004. This shows the existing of discharging a contract by agreement trough novation as stated in section 63 of Contract Act 1950 which occurs if there is a substitution of the earlier contract with the new contract. This is due to the fact that GWA had agreed for the suggestion made by Chan and Shan which the repayment made by their respective wives on the amount RM1000 out of RM20000 plus interest as GWA has postpone before during the inability of Chan and Shan to pay before and therefore, requested to pay back after GWA had financial problems 4month later and these agreed by GWA as a full and final settlements of what Chan and Shan have owed. This clearly shown that then in year 2003 after the economic condition has improve GWA cannot revert their existing contract as they had agreed to the suggestion made before as a substitute for original contract hence, the original contract no need to be perform as they have not obliged to each other of the original contract. This shown that the original contract has discharged and parties involved are obliged to the new contract made. Hence, there is discharging of the original contract which makes GWA cannot proceed to reverted to the original contract. GWA cannot revert to their original contract as there are strong reasons as also because there is the discharging of contract by agreement which is through the existence of novation. Conclusion Based on the above explanation towards the issues arise, GWA cannot claim any payment after the new agreement has been bind by both parties. Therefore, the payment in 2004 will be paid only based on the amount as promised that is RM 1000.