Page 72 - PRINCIPLE OF LAW- FINAL (eISBN) pdf

Politeknik Kota Bharu

2.5.4 DISCHARGE BY BREACH

✓ Where one of the parties fails to perform their side of the

contract the innocent party may be able to terminate the

contract and commence proceedings for damages.

✓ The effect of termination is to release both parties from future

obligations, but not those that have already been incurred

✓ Contract must be performed strictly in accordance with its

terms.

✓ Clause 38: Obligation of parties to contracts

✓ Clause 40: Effect of refusal

✓ Renunciation (pelepasan)

i. Before performance is due - to accept the other party’s

repudiation, terminate the contract forthwith and

commence legal proceedings for damages.

ii. During performance - to continue to perform the contract

(affirm) and wait until the other party has breached the

contract, then commence legal proceedings.

60