REMEDIES

Remedies
• Rescission
• Damages
• Specific performance
• Injunctions
 Rescission
• Johnson v Agnew
• Putting an end to the contract/terminating the
contract
• Rescission ab initio (absence of free consent –s19 &
s20) & rescission for breach (s40, s56(1))
• Rescission ab initio – back to the time the contract
was made ie as if no contract has ever come into
existence
• Rescission for breach – parties are discharged from
moment election to rescind is made. Rights and
liabilities accrued remain unaffected eg damages
Right of election at common law
• White & Carter v McGregor
Pl = advertiser. D = garage owner.
Pl & D entered agreement. Pl supposed to stick
advertisements for D on garage bins in town for
the next 3 yrs. Next day, D changed his mind.
Instructed Pl to stop advertising. Pl refused and
carried on sticking the advertisements on garage
bins for 3 yrs. At end of 3 yrs, Pl claimed
contract price.
Held: Upon D’s breach, Pl had option either to
rescind or affirm the contract
 Need to exercise option
• Voidable contract – right to rescind or
affirm. Right must be exercised. Contract
does not come to an end automatically.
• Innocent party has to communicate
election within a reasonable time.
• S67 mode of communication of rescission
(linking back to ss 3,4,5 and 6)
Perkayuan OKS No 2 Sdn Bhd
• Agreement between appellants and respondents.
Pursuant to agreement, R allowed A to carry out logging
in a certain area. A breached agreement by assigning
the agreement to a 3rd party without R’s permission. R
gave notice to A to terminate agreement.
• FC: R’s notice to A to terminate was incomplete because
the matters stated in the notice were ambiguous and
vague. R had not specified in the notice the details to
support its allegation that A had assigned their rights
under the agreement to 3rd parties. The 3rd party was not
identified in the agreement. Court stated that such
details were needed so that A could admit or deny the
allegations. Since R’s notice was ambiguous, the notice
was not valid.
 Election is irrevocable
• Lim Ah Moi v AMS Periasamy Suppiah
An innocent party who exercises his
option cannot later change his mind and
revoke it. This is to ensure that the other
party is aware of his legal position and
hence ensures certainty.
 Failure to exercise option
• S40 – If innocent party does not
communicate his decision on his election
→ deemed he had opted to rescind
• Sim Chio Huat v Wong Ted Fui [1983] 1
MLJ 151 – Innocent part, by conduct, had
affirmed contract
 Sim Chio Huat v Wong Ted Fui
• S&P agreement with developer. Time of essence
clause. Developer failed to deliver on time. P did
not communicate his election but continued to
order extra works to be done on the house.
• FC: By not communicating his intention to
rescind or affirm, allowing the delivery date to
pass and ordering extra works, pl had waived his
right to rescind and was deemed to have elected
to affirm the contract,
 Relief under CA
S40 – voidable contract (Muralidhar
Chatterjee)
– s65 applies to rescission of a contract for
breach AND also to rescission ab initio
situation
- s76
• S66: ‘any person’ – confined to person
who is a party to the contract. Doctrine of
privity :Badiaddin b Mohd Mahidin
• Muralidhar Chatterjee
– Upon rescission under s40 (for breach), s65 applies
AND s76 (ie innocent party entitled to compensation)
• Similarly, Yong Mok Hin followed Muralidhar
Chatterjee.
• In addition, Yong Mok Hin held that s65 and s66
apply as well AND also s76
– A voidable contract that is rescinded becomes void
• Hims Enterprise v Ishak Subari – In addition to
s65 and 666, the innocent party can also claim
damages under s76.
 Relief under SRA
• SS34-37 SRA: innocent party may sue to have a
contract rescinded
• S34(1): Who can apply to court for rescission?
– “Any person interested in a contract in writing may
sue to have it rescinded, and such rescission may be
adjudged by the court in any of the following cases,
namely:
– (a) where the contract is voidable or terminable by the
plaintiff”
• S34(1) not confined to parties to the contract
S37- when granting rescission, court may order
party rescinding to make any compensation to
the other.
“On adjudging the rescission of a contract, the
court may require the party to whom the relief is
granted to make any compensation to the other
which justice may require”
Can party who is rescinding claim damages on
rescission under SRA?
Probably yes because meaning of rescission under
SRA is same as in Contracts Act. See S2(2)
SRA.