Contract Breach Legal Insights

*. If one party fails to adequately perform his obligations, then the other party can always terminate the contract. This statement refers to? A. Where statute or case law does not classify the status of a term, the court will attempt to determine the status of the term by reference to the parties' intentions. B. Breach of contract that arises through defective performance. C. The court will always uphold the parties' classification of a term. D. Breach of a warranty will allow the non-breaching party to terminate the contract and claim damages.

*. Ahmad is in Kuala Lumpur for the first time and decides to leave his bag containing his RM300 camera at Terminal Bersepadu Selatan's left luggage lockers for the day. He places his bag in the locker and after inserting the RM10 fee, the door locks and a ticket is issued. The ticket states that Terminal Bersepadu Selatan are not liable for any loss, damage or theft to items valued over RM100 left in the lockers. Ahmad's locker is broken into by Salleh and his camera is stolen. Can Ahmad claim RM300 from Terminal Bersepadu Selatan ? A. No, because the exemption clause states the limit is RM100. B. No, because his camera has been stolen by someone other than Terminal Bersepadu Selatan. C. Yes, because the exemption clauses are only valid if they are signed. D. Yes, because the exemption clause was dispensed after the contract was made.

*. Where a person acting during a business includes a term in a contract which excludes liability for death and personal injuries through negligence, the term is: A. Binding on the parties. B. Invalid. C. Invalid unless it is reasonable. D. Only valid if it is brought to the attention of the other party.

*. Which of the following is not a factor that can invalidate free consent? A. Fraud B. Misrepresentation C. Mistake by one party. D. Coercion.

*. Aishah wrote Linda, "I will sell you my house at Lot *, Jalan Solehah, Kuala Nerus, Terengganu for RM500,* payable upon registration of the house in favour of Linda, deal to be completed within 90 days of the date of your acceptance." Assuming that Aishah' letter contains terms which are deemed sufficiently certain and definite, which of the following statements is correct? A. Aishah' letter is not an offer unless Aishah intended it to be an offer. Aishah' letter is not an offer unless Linda thought Aishah intended to make an offer. B. C. Aishah' letter is an offer if a reasonable person with full knowledge of the circumstances would be justified in thinking it was intended as an offer.. D. Aishah' letter is not an offer unless both Aishah and Linda considered it as an offer. *. Jewellery Sdn Bhd wrote a letter to Datin Rosminah, "We have received an exceptionally fine self-winding Rolex watch which we will sell to you at a very favourable price." A. The letter is an offer to sell. B. A valid offer cannot be made by letter. C. The letter contains a valid offer which will terminate within a reasonable time. D. The letter is inviting Datin Rosminah to make an offer.

*. Amer Computer Sdn Bhd offered on 1st May * to sell five (*) computer servers to Gatekeeper Company for RM5,*.* each, delivery to be on May *. Later that day (May *), Gatekeeper responded that it would buy the computers only if they were delivered within three business days. Amer Computer Sdn Bhd notified Gatekeeper the next day, May *, that it would not be able to deliver the goods within the time requested by Gatekeeper. Which of the following is true regarding Amer Computer Sdn Bhd offer? A. Gatekeeper's response is a counter offer, and therefore, there was no contract between Amer Computer Sdn Bhd and Gatekeeper. B. Gatekeeper's additional term became part of the contract, so Amer Computer Sdn Bhd is obligated to deliver the goods within three business days. C. Amer Computer Sdn Bhd offer was accepted by Gatekeeper D. Gatekeeper may later accept Amer Computer Sdn Bhd's May * offer if it is then willing to accept delivery in four weeks.

*. On May *, *, Diamond Property Sdn Bhd mailed a written offer to Musa for the sale of an office building. The offer included an express term that it would expire on June *, * if the acceptance was not delivered into the hands of the offeror by the expiration date. On June *, * at *:* a.m., Musa sent a written acceptance to Diamond Property Sdn Bhd via Musa's personal assistant. However, the personal assistant was not able to deliver the acceptance until July *, *. On July *, *, Diamond Property Sdn Bhd contacted Musa, informing him that the acceptance had been delivered one day late. As a result, Diamond Property Sdn Bhd refused to honor the acceptance. Which of the following is the most correct statement? A. There is no contract between Diamond Property Sdn Bhd and Musa. However, if Musa would have mailed the acceptance on June *, *, a contract would have been created. CONFIDENTIAL */* MMM4309 CONFIDENTIAL B. There is a contract between Diamond Property Sdn Bhd and Musa. The moment that Musa gave the acceptance to the personal assistant, a contract was formed because acceptances are valid immediately upon dispatch. C. There is a contract between Diamond Property Sdn Bhd and Musa. The fact that the acceptance arrived only one day late is of no significance. D. There is no contract between Diamond Property Sdn Bhd and Musa.

Э. What type of statement amounts to a misrepresentation in contract law? A. A statement of fact B. An opinion C. An expression of intention D. All of the above

*. Bakri and Salleh entered into a contract whereby Bakri agreed to sell Salleh RM1,* worth of cannabis, an illegal substance. This is an example of a A. quasi contract. B. void contract. C. voidable contract. D. secondary party beneficiary contract.

*. What is the definition of the doctrine of frustration? A. A legal doctrine that excuses a party from a contract if a supervening event renders the contract's performance impossible. B. A legal doctrine that relieves a party from a contract if the party's performance becomes more difficult due to a supervening event. C. A legal doctrine that excuses a party from a contract if the party's performance becomes more difficult due to a supervening event. D. A legal doctrine that relieves a party from a contract if a supervening event renders the contract's performance impossible.

*. When a contract is terminated due to the death of a party, what is the effect on the other party. A. The contract is void. B. The contract is still in effect. C. The other party is able to sue for damages. D. The other party is released from liability.

*. Which of the following would NOT be considered as a breach of condition? A. Failing to deliver goods on the agreed date. B. Failing to pay the agreed price. C. Making a minor alteration to the goods. D. Providing goods of a different quality than agreed.

*. What is the common law duty of a shipowner to provide a seaworthy ship? A. The duty to provide a seaworthy ship is an absolute obligation which means that the carrier cannot contract out of it. B. The duty to provide a seaworthy ship is an absolute obligation which means that the carrier cannot employ sub-contractors. C. The duty to provide a seaworthy ship is an absolute obligation which means that the carrier must take extra care before the ship sets sall. D. The duty to provide a seaworthy ship is an absolute obligation which means that if the ship is unseaworthy the carrier cannot avoid liability by showing he took reasonable care or that the fault lay with an independent sub-contractor.

*. Which of the following statement is correct? Please select all that apply. I. The carrier need not issue a bill of lading, complying with the Hague Visby Rules Art III r3. II. The Inclusion of statement such as 'weight and condition unknown" when describing the goods on a bill of lading will be ignored by the courts. If a carrier states on a bill of lading that the goods were 'loaded in apparent good order and condition', this is a warranty of the condition of the goods. IV. A bill of lading can only be 'clause' if any competent person would have concluded that the goods were not in good order and condition. A. I, II & III B. I, II & IV C. II, III & IV D. I, III & IV

*. What must the carrier do to avoid liability for losses under the Hague-Visby Rules? A. Prove that the loss was due to an act of God. B. Prove that the loss was due to an act of war. C. Prove that the loss was due to an act of the shipper. D. Prove that the loss was due to an act of the carrier.

*. In the Astra case, obligation to pay hire is considered as intermediate or innominate term or a warranty rather than a condition. What is the effect of this statement? A. In order for the ship-owners to be entitled to terminate a contract at common law and to claim damages for loss of bargain, the ship-owners must assess the gravity of charterers' default in payment of hire. B. The ship-owners can immediately terminate the contract and return all the hire payment he ever received to the charterer in order to return the status quo. C. The charterer can terminate the contract and request the ship-owner to return all hire payment he has paid. D. The ship-owner can only terminate the contract.

*. What are the implications of the breach of implied undertaking in a voyage charter party that the vessel shall not deviate. I. Any unjustifiable deviation from the proper route will be a fundamental breach of the contract of affreightment. The aggrieved party may terminate the contract. II. The charter party is automatically terminated. III. The period taken during deviation will be considered as off-hire. IV. The aggrieved party may elect to ignore the breach and treat the contract as still subsisting. A. * & II B. C. III & IV D. I & IV

*. In December *, a new United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea has been introduced: I. It is known as Hamburg Rules governing the international shipment of goods, resulting from the United Nations International Convention on the Carriage of Goods by Sea adopted in Hamburg II. It is known as Rotterdam Rules apply to multimodal transport involving an international sea-leg and deal with a range of issues not presently subject to mandatory international law III. To provides mandatory standards of liability for loss or damage arising from the international carriage of goods by sea. IV. It is known as Carriage of Goods By Sea Act * A. I & II B. II & III C. III & IV D. I & III

*. The Hamburg Rules come into operation where the contract is for carriage by sea and A. The contracting parties cannot agree on one set of the rules. B. Hague-Visby rules do not apply. C. An element of internationally is present. D. The port of destination is not in the EU.

*. A charter whereby the ship has been chartered to move goods from Port Kelang to Shanghai for six months is called as A. voyage charter B. demise charter CONFIDENTIAL */* MM4309 CONFIDENTIAL C. bareboat charter D. time charter

*. "The provision that time is 'not to count' has no further application once the laytime had expired". This statement refers to A. the lay day is calculated on daily basis until it expires. B. once on demurrage, always on demurrage. C. demurrage is applicable once the laytime expires. D. time is always the essence.

Which of the following will not result in a chartered vessel being off hire? A. The chartered ship diverting to render assistance to another ship that is on fire. B. The chartered ship suffering engine trouble. C. The chartered ship not being able to maintain the required speed for two days during the charter because of an engine problem. D. The chartered ship's crew going on strike.

*. The shipper contracted with the carrier to ship timber from Bintulu. The timber was carried on the deck of a barge and when the barge was damaged during the voyage, the timber was lost. The bill of lading was stamped with a clause stating: "cargo carried on deck at shipper's risk without responsibility for loss or damage howsoever caused". Condition * of the bill of lading provided that "all goods shipped as deck cargo to be carried at owner's risk". The shipper claimed a breach of contractual duty by the carrier in failing to ensure that the timber was properly secured, and in failing to deliver the cargo. A. The carrier may rely on the exclusion clause inserted by the parties in the bill of lading to exempt his liability. B. The carrier may escape liability of the loss after the completion of the discharge of the cargo from the ship. C. The Hague Rules were applicable to the bills of lading but any liability under those rules arose from the time the goods were loaded until they are unloaded from the vessel. D. All the above.

*. In the case of Bradley and Sons Ltd v Federal Steam Navigation Co (*) * LIL Rep *, the Court said "The ship must have that degree of fitness which an ordinary careful and prudent owner would require his vessel to have at the commencement of her voyage having regard to all the probable circumstances of it. To that extent the shipowner...undertakes absolutely that she is fit, and ignorance is no excuse. If the defect existed, the question to be put is, would a prudent owner have required that it should be made good before sending his ship to sea had he known of it? If he would, the ship was not seaworthy..." In such a situation, what is the responsibility of the Slayer Ltd in the Hague-Visby Rules? A. His duty is absolute to ensure the ship is seaworthy. Damage to the refrigerator and radar system are considered as unseaworthy and he is absolute liable to the charterer and the shippers CONFIDENTIAL */* MMM4309 CONFIDENTIAL B. He has done his due diligence by having the vessel thoroughly serviced and the equipment checked in drydock prior to charter. C. He has nothing to be blamed on the vessel's refrigerator and radar system as the charter is time charter. D. The shipowner relinquished his rights after delivery of the vessel to the charterer.

*. The unique character of the bill of lading is that delivery of the goods has to be made against the surrender of the document of title (Chilewich Partners vs. MV Alligator Fortune [*] * Lyod's Rep *. To whom should the carrier surrender the goods? A. A bona fide purchaser without having a copy of the bill of lading. B. A consignee with a letter of indemnity. C. A consignee having a non-negotiable bill of lading. D. A banker on behalf of the consignee with a letter of indemnity.

*. A payment of hire is due on Sunday, the charterer's bankers delivered the cheque by hand to the shipowner's bank at *.00pm the following day. The shipowner's banker took delivery of the payment order over the counter but, the shipowner refused to accept the payment and requested withdrawal of the vessel due to failure of hire on the agreed schedule. Can the shipowner withdraw the vessel? A. The shipowner may withdraw the vessel as the acceptance of payment by the shipowner banker was merely performing a third party act and cannot make a decision on behalf of the shipowner. B. The shipowner cannot withdraw the vessel as acceptance of payment by the banker was considered as waiver of right to withdraw. C. The shipowner cannot withdraw the vessel as late payment by the charterer was merely one day of the agreed schedule. D. The shipowner may withdraw the vessel at any time they like if they receive a higher offer from another charterer.

*. Pandemic Covid-* witnessed congestion at port which prevent the vessel from reaching Its agreed destination and becoming an "arrived ship" in which case the resulting delay will affect the charterer. What should the charterer do in this possible situations to avoid being charged excessive demurrage? A. The charterer should have a clause inserted in the charterparty agreement that that laytime should start from the time of unloading the goods. B. The shipowner should have a clause inserted that time waiting at the berth is to count as laytime. C. The shipowner should not do anything as "arrived ship" means the vessel reaches the area specified in the charterparty agreement and laytime immediately starts. D. The charterer should not do anything as "arrived ship" means the laytime starts from unloading the cargo.

*. Most standard off-hire clauses set out how the off-hire events must affect the use of the vessel. Therefore, apart from identifying the off-hire event, the charterer must establish that the event has "prevented", "hindered" or "reduced" the full working of the vessel. The "workings of a vessel" may be prevented by physical as well as legal means. For instance, CONFIDENTIAL */* MMM4309 CONFIDENTIAL a vessel that is physically functional may still be put off-hire because it is legally prevented by the port authorities from entering the port, on suspicion of Covid-*. Choose examples of off-hire clauses that may be used to represent Covid-* prevented the full use of the vessels. A. BIMCO's Baltime *: In the event of ... necessary measures to maintain the efficiency of the vessel, deficiency of men...either hindering or preventing the working of the vessel and continuing for more than twenty-four consecutive hours, no hire shall be paid..." B. Clause * of NYPE */* Time Charter: In the event of loss of time from deficiency... of officers...detention by Port State Control or other competent authority for vessel deficiencies...or by other similar cause preventing the full working of the vessel, the payment of hire...shall cease for the time thereby lost". C. Shelltime4: "On each and every occasion that there is loss of time (whether by way of interruption in the vessel's service or, from reduction in the vessel's performance, or in any other manner)... due to any delay in quarantine arising from the master, officers or crew having had communication with the shore at any infected area without the written consent or instructions of Charterers or their agents...the vessel shall be off- hire..."

*. The Rotterdam Rules states that the contract of carriage means a contract in which a carrier against the payment of freight, undertakes to carry goods from one place to another and the contract shall provide for carriage by other modes of transportation in addition to sea carriage. A. True B. False *. Clause bill of lading is a carrier's guarantee, or warranty, of the condition of the goods delivered. A. True B. False *. Where the performance of the contract of charter-party is delayed due to the occurrence of some event or change of circumstances, the contract may be frustrated if the resulting delay is likely to be so prolonged. A. True B. False

*. Where goods are shipped without notice of their dangerous qualities the carrier will not be held liable for any damage either to the vessel or to any other cargo on board. A. True B. False *. Whether a port is named in the charter, or to be nominated by the charterer, it is presumed that such charterer will also have a right to nominate a berth within that port. A. True B. False *. A carrier who delivers goods to the consignee without production of the bill of lading does not commit a breach of contract when the delivery is made to the person entitled to possession. A. True B. False *. The type of vessel involved, the work to be done and the conditions pertaining the port at previous time shall be considered in determining whether or not a port is safe. A. True B. False

*. Shipowner shall not be responsible to the stowage and stevedoring operation if there is an express provision shifting the risk and responsibilities of stowage and stevedoring operation to charterers. A. True B. False *. Article IV rule * of the Hague Visby-Rule allows deviation in saving or attempting to save life and property. A. True B. False *. Hire shall not be payable if the ship is for any reason not in full working order to render the service then required from her, and the charterers suffer loss of time in consequence. A. True B. False

*. Charter-parties usually contain a clause providing that charterer may retain the vessel for additional days in order to complete the loading or discharging operation on payment of a fixed daily amount, known as demurrage.. A. True B. False *. Implied terms of a contract refers to the practice of setting down default rules for contracts when they are expressly or explicitly stated in the contract. Terms may be implied into contract through statutes, custom or by the courts. A. True B. False *. Persons under the influence of alcohol or drugs may invalidate a contract if they were so inebriated as to be unable to appreciate "the nature and consequences of the agreement," A. True B. False *. Communication of acceptance through electronic messages is usually considered as communication by postal rule as it involves a third party which put acceptance communication at risk of delay or lost. A. True B. False *. A void contract is an agreement which is not enforceable by law, whereas voidable contract Is an agreement which at the option of the party to the contract whose consent was caused by undue influence, fraud, misrepresentation, or mistake. A. True B. False

*. A void contract is an agreement which is not enforceable by law, whereas voidable contract Is an agreement which at the option of the party to the contract whose consent was caused by undue influence, fraud, misrepresentation, or mistake. A. True B. False

*. Briefly describe the following features: *. The Hamburg Rules ii. Deviation iii. Seaworthiness iv. Limitation of Liability under the Hague-Visby Rules.

*. In the history of contracts of carriage of goods by sea the law has swung from a position which was too favourable to the shipper to one which is too favourable to the carrier.' Discuss the above statement by comparing the responsibility of carriers at common law and under the Hague-Visby Rules.

*. You work for a shipping line and one of your ships has been delayed from leaving port because the master refuses to sail carrying a large shipment of grain that has been identified as potentially dangerous. You are seeking compensation from the shipper who is disagreeing about the dangerous nature of the cargo. (a) Explain why the master might believe the grain poses a hazard. (* marks) (b) Explain what is meant 'dangerous cargo'. (* marks) (c) Explain the obligation at common law on the shipper in this case. (* marks) (d) Explain any obligation that may rest on the shipowner in this case, and give an example of case. (* marks) (e) Do you think that you will win a case against the shipper in this situation? (* marks)