CONTRACT LAW II (T2)

QUESTION: TUTORIAL 3

NAME: SABRINA BINTI MOHD AMIR

ANDREW THANGAM

STUDENT ID: 1161302000

DATE: 15 DECEMBER 2016

Critically discuss a case study on the following cases:

1. Cutter v Powell (1795) 6 TR 320

Parties: Mrs. Cutter (Plaintiff); Powell (Defendant)

Facts: Defendant agreed to pay Cutter 30 guineas provided he proceeded, continued and

performed his duty as second mate in a vessel (the Governor Parry) sailing from Jamaica to

Liverpool. The voyage began on 2nd August, and was supposed to last ten weeks; however Cutter

died on 20th September, when the ship was 19 days short of Liverpool. Cutters widow claimed,

on a quantum meruit, for a portion of Cutters agreed wages for the part of the voyage that her

husband had survived.

It was apparent that the usual wages of a second mate of a ship on such a voyage was four pounds

per month; but when seamen are shipped by the run from Jamaica to England, a gross sum was

usually given. The claim failed on the grounds that under the terms of the contract, Cutter was

obliged to perform the agreed duties before he would be paid.

Issues: Whether Mrs. Cutter is entitled to her late husbands wages

Judgement: The Court of King's Bench held that Cutter was not entitled to wages because he

had not completed the journey. Part performance was no performance at all. Mrs Cutter's action

failed. The contract was for an entire service, and, payment was on condition that Cutter worked

the ship to Liverpool. Since he did not fulfil this condition, Mrs Cutter was entitled to nothing.

It was a condition precedent for payment that that service be completed.

Lord Kenyon CJ held that the defendant expressly promised to pay the intestate thirty guineas,

provided he proceeded, continued and did his duty as second mate in the ship from Jamaica to

Liverpool; and the accompanying circumstances disclosed in the case are that the common rate

of wages is four pounds per month, when the party is paid in proportion to the time he serves:
and that this voyage is generally performed in two months. Therefore if there had been no

contract between these parties, all that the intestate could have recovered on a quantum meruit

for the voyage would have been eight pounds; whereas here the defendant contracted to pay thirty

guineas provided the mate continued to do his duty as mate during the whole voyage, in which

case the latter would have received nearly four times as much as if he were paid for the number

of months he served. He stipulated to receive the larger sum if the whole duty were performed,

and nothing unless the whole of that duty were performed: it was a kind of insurance... Ashurst

J concurred, emphasizing that the contract was entire and that completion was a condition

precedent to the obligation to pay, where:

This is a written contract, and it speaks for itself. And as it is entire, and as the defendants

promise depends on a condition precedent to be performed by the other party, the condition must

be performed before the other party is entitled to receive any thing under it. It has been argued

however that the plaintiff may now recover on a quantum meruit: but she has no right to desert

the agreement; for wherever there is an express contract the parties must be guided by it; and one

party cannot relinquish or abide by it as it may suit his advantage.

However, this situation is now provided for by the Merchant Shipping Act 1970.

Principle: The general rule in contractual relations that performance must be exact and precise

and in accordance with what the parties have agreed.

Tong Aik (Far East) Ltd v Eastern Minerals & Trading (1959) Ltd [1963] MLJ 322

PARTIES: TONG AIK FAR EAST LTD (PLAINTIFF) EASTERN MINERALS &

TRADING (DEFENDANT)

FACTS: Tong Aik, the plaintiff had claimed the balance due to them from the defendants as

their agreed remuneration under a contract for work and labour carried out and materials

supplied at the defendants manganese mine. However, the defendants denied liability on the

ground that this was an entire contract and that the plaintiffs were in breach of the contract as

they did not supply the defendants with the manganese ore as stipulated in the contract. The

defendants claimed to set off various sums said to be due to them and also counterclaimed for

loss of profits and penalties incurred by them as a result of plaintiffs breach. The High Court

of Singapore had construed the contract and held that it was indeed a divisible contract as the

parties did not intend the contract to be fulfilled as a whole.

Issue: Whether the contract is a divisible contract or an entire contract.

Principle: The differences concerning entire and also divisible contract.

Judgement: The court held that this contract was a divisible contract. Also, the plaintiffs must

be paid for the tonnages of ore actually produced and or transported to the stockpile. However,

even if the contract is not a divisible contract, in circumstances of this case the contract carried

with it a right on the part of the plaintiffs to the payment upon a quantum meruit for the services

actually rendered.
KP KUNCHI RAMAN V GOH BROTHERS SDN BHD [1978] 1 MLJ 89

Parties: Kunchi Raman (Plaintiff) & Goh Brothers Sdn Bhd (Defendant)

Facts : The plaintiff (a contractor) originally claimed that a sum of $16,580.18 which was

reduced to $11,656.81 was due to him being the balance payable for work performed under an

agreement dated November 17, 1970. By that agreement the plaintiff agreed to perform certain

works, namely, to lay water pipes complete with specials and valves between Mak Mandin and

Prai and between Mak Mandin and Jalan Raja Uda in Butterworth. Under the agreement, the

defendant undertook to supply the pipes, at the site of work, whereas the plaintiff was to supply

all labour and other equipment for laying the pipes. The contract also included work for the

reinstatement of a cycle tract of a size and length and at rates detailed in the said agreement.

The plaintiff claimed that he had performed the work of reinstatement of the cycle track by

July 15, 1971 and the other works by September 15, 1971.The defendant, a company, denied

that the plaintiff had completed the works in question a claimed by him, and averred that it was

a term of the contract that the plaintiff would execute the works to the satisfaction of the

defendant and the Chief Resident Engineer of the River Muda Water Scheme, who was in

charge of the contract works, but in spite of repeated requests by the defendant to comply with

the instructions, the plaintiff failed to complete the works as agreed. The defendant

incurred expenses in completing the contract and counterclaimed for repayment of sums

paid to the plaintiff or for damages.

Issue : Whether the agreement between both parties are entire or divisible contract

Judgement: As the plaintiff had substantially completed the contract he was entitled to claim

for any balance due to him for work done. The defendant was also entitled to cross-claim for

the defects and omissions, and as the cost of completing the contract work and repairing work
unsatisfactorily done overtopped the balance claimed by the plaintiff, the plaintiff's claim

should be dismissed and judgment given for damages on the counterclaim

Principle: In this case, the doctrine of substantial performance was applied. According to

Section 38(1) of Contract Act 1950, parties to a contract must either perform or offer to perform

their respective promise unless such performance has been dispensing with by law.
H Daikin & Co Ltd v Lee [1916] 1 KB 566

Parties to contract: H Daikin & Co Ltd (Plaintiff) Lee (Defendant)

Facts of the case: The plaintiffs were builders and the action was brought to recover the sum

of 352l. 4s. 4d., the balance of the price of certain repairs carried out by the plaintiffs at the

defendant's house, 37, Wimbledon Park Road, Wandsworth. Part of the claim related to work

contained in a specification which by a verbal contract the parties had agreed should be done

for 264l. The balance of the claim was for extras and additional work and the only question

rose on the appeal related to the claim in respect of the contract work.

The defense was that the work referred to in the specification had not been completed, and the

official referee found as a fact that the contract had not been fulfilled in the three following

instances which are 1.) A letter from the plaintiffs which accompanied the specification stated

that the concrete which was to be placed under a part of one of the side walls of the house,

which was to be underpinned, was to be of the depth of 4 feet. Only 2 feet of concrete was

placed there. (2.) Columns of hollow iron, 5 inches in diameter, were to be used for the support

of a certain bay window. The columns supplied were of solid iron 4 inches in diameter. (3.)

The joists over the bay window were to be cleated at the angles and bolted to caps and to each

other. However, this was not done. The defendant had resumed her occupation of the house

after the plaintiffs' workmen had left, and after receiving the plaintiffs' account she offered to

settle the whole claim by a payment of 250l in addition to a sum of 50l which she had already

paid.

The official referee held that the plaintiffs had not performed their contract, in that the

defendant had been given something different from, and less strong and secure than, what she

was entitled to have under the contract, and that the plaintiffs were therefore not entitled to
recover any part of the contract price or any sum in respect of the contract work. The official

referee disallowed the claim for extras, but allowed a sum of 70l for the additional work, which

was less than the sums paid before action and paid into Court, and the official referee therefore

entered judgment for the defendant.

Issue: Whether on the true construction of the contract, entire performance was a condition

precedent to payment.

Judgement: The Court of Appeal held that the builders were entitled to recover the contract

price, less so much as ought to be allowed in respect of the items found to be defective.

Pickford L.J states that: "To my mind our decision does not interfere with any one of them.

*Certainly I have not the slightest wish to differ from the view that if a man agrees to do a

certain amount of work for a lump sum and only does part of it he cannot sue for the lump sum;

but I cannot accept the proposition that if a man agrees to do a certain amount of work for a

lump sum every breach which he makes of that contract by doing his work badly, or by omitting

some small portion of it, is an abandonment of his contract, or is only a performance of part of

his contract, so that he cannot be paid his lump sum.* It seems to me that there would be a

performance of the contract, although some part of it was done badly, and that seems to me to

be the position here."

Principles: Fulfilment of every term does not necessarily a condition precedent in a contract

for a lump sum.

Traced back the judgement of Lord Mansfield CJ: where the mutual covenants go to the

whole of the consideration on both sides, they are mutual conditions, the one precedent to the

other. But where they go only to a part, where a breach may be paid for in damages, there the

defendant has a remedy on has a remedy on his covenant, and shall not plead it as a condition

precedent.
BUILDING & ESTATE LTD V CONNOR [1958] 1 MLJ 173

Parties: Plaintiffs Building and Estates Ltd, an estate development company Defendants

Mrs. Connor

Facts: The plaintiffs, the estate development company had constructed a house on a plot of

land. It had been agreed upon prior to erecting the house that the defendant would buy a plot

of land together with the house which was to be built upon the said land. This transaction was

agreed upon with a consideration of $ 21, 492. The date of completion agreed upon was 25 th

May 1955.

Following that, the defendant went into occupation of the house, but neglected to pay the full

purchase price on the house. She had only paid $ 16, 689 with a remaining of $ 4803 to be

settled. However, the defendant refused to give the aforementioned amount, citing her

dissatisfaction with the end product as the reason. The defendants express reluctance to settle

the amount was on the ground that the house was not built in accordance with her specification,

along with the claim that works were defective and of inferior quality than promised.

The plaintiff thus filed a suit, claiming the remaining sum, which is the amount of purchase

money that remains unpaid with respect to the house and land. In response to their claim on the

sum, the defendant denied any liability to remaining sum claimed and further went on to

counterclaim a sum of $ 12, 063 in damages.

Issues: Whether the plaintiffs are entitled to sue for the balance of the purchase price

Whether the defendant has the rights to repudiate the contract

Principle: The doctrine of substantial performance makes room for a party who substantially

performs their contractual obligations, to enforce the contract.

Judgment: The court held that the plaintiffs were entitled to the recovery of sum $ 4803, less

$ 900, in view of the defects and omissions, bringing it to a nett recovery amount of $ 3903.

In addition to that, the plaintiffs were set to claim interest on the unpaid purchase money.

The High Court held that the doctrine of substantial performance applied in regards to this case

the plaintiffs are entitled to sue the defendant for the contract price on the basis, of course

that they can show that the work which they have done constitutes substantial compliance with

the contract. On this point, the evidence is overwhelmingly in favour of the plaintiffs. The

defects and omissions of which complaint is made by the defendant relate to a number of

miscellaneous items many of them trivial or of only minor importance.I am in no doubt that

the defects and omissions which have been proved, whether taken singly or in the aggregate,

are not such as to entitle the defendant to say that the plaintiffs have not substantially performed

their promise under this contract.