Performance of an Existing Public Duty

• Performance of an existing public duty Stop: more

money please
without more is not good consideration.

– Glasbrook Bros. Ltd v Glamorgan

County Council [1925] AC 270.

15

Performance of an Existing Contractual Duty

• Performance of an
existing contractual duty
Huh more for us!
is not good
consideration... Unless
there’s a new element

– Stilk v Myrick (1809)

2 Camp. 317
– Hartley v Ponsonby
(1857) 7 El & Bl
872. 16
 What about Williams v Roffey Bros [1990] 2
WLR 1153?
• Court of Appeal : ‘practical benefit’ is good consideration
• Court of Appeal held: that variation was supported by consideration since
the defendant was to receive a ‘practical benefit’ from the variation. The
practical benefit comprised:
a) Assurance that plaintiff would continue to work on cite;
b) The voidance of an obligation to pay penalty as a result of the failure to
complete the flats timeously; and
c) Avoidance of the inconvenience generated by having to find a substitute
for the plaintiff.

17

Part
• At common law, part payment of a debt is not valid
Payment of consideration for a promise to forego the balance.

a Debt • This has been propounded by the famous English

court decision in Pinnel’s case.

18
 • Section 64 Contracts Act (statutory
waiver) :
Does Pinnel’s • Every promisee may dispense with or
remit, wholly or in part, the
Rule apply in performance of the promise made to
him, or may extend the time of such
Malaysia? performance, or may accept instead
of it any satisfaction which he thinks
fit.

19

Cont…
• The situation in Pinnel’s case has been to a
certain degree remedied by the equitable
doctrine of promissory estoppel.

• Homework: (see chapter 6 - Promissory

Estoppel)
Trakic A., et al., Law for Business, (Sweet & Maxwell
Asia: Malaysia, 2018) at p 115.

20
 EXEMPTION CLAUSES
-contractual terms
by which a
restricts excludes or modifies liability
contracting para
arise due to the breach
of the contract as
may clauses
such these exclusion clarses or
exemption
of the content of contract
form part a
1

Relevant chapters

• Chapter 9 – Exemption Clauses

• Chapter 10 – Unfair Contract Terms

Trakic A., et al., Law for Business, (Sweet &

Maxwell Asia: Malaysia, 2018)

2
 Introduction
• Exemption clauses exempt or limit the liability
arising due to a breach of contract!
because both
• Freedom to contract (sanctity of contract)! - have the
parties to chose
freedom
• What about standard from contracts?

Exemption clauses
Exemption
Clauses

I
Exclusion Clauses: Total Denial Limitation Clauses: Partial Denial
the liability
completely deny they limit
they liability
of a for
person any
breach of contract &- 5
exclude all the liability 4
 -line hole liability
Exclusion Clauses - Examples
• THE MANAGEMENT CANNOT ACCEPT ANY LIABILITY FOR LOSS
OR DAMAGE CAUSED TO ANY VEHICLE OR ITS CONTENTS
WHILST PARKED IN THIS CAR PARK. car
park
• THE COMPANY WILL NOT BE LIABLE FOR ANY STAINS OR
OTHER DAMAGE TO ANY CLOTHING WHATSOEVER.
laundry
• EQUIPMENT IS USED ENTIRELY AT CUSTOMER’S OWN RISK.
GOODS ARE SOLD AS SEEN: WE ACCEPT NO LIABILITY FOR
FAULTS DISCOVERED AFTER PURCHASE.

• MANAGEMENT RESERVES THE RIGHT TO SUSPEND SERVICES

WITHOUT LIABILITY.

Trakic A., et al., Law for Business, (Sweet & Maxwell Asia: Malaysia, 2018) at p 187.
5

limiting A liability
~actualy
part his
Limitation Clauses - Examples
• THE COMPANY WILL NOT BE RESPONSIBLE FOR ANY PACKAGE
EXCEEDING THE VALUE OF $100.

• THE COMPANY’S LIABILITY ARISING OUT OF OR RELATED TO

THIS AGREEMENT WILL NOT EXCEED $50,000.

• LIABILITY ACCEPTED UP TO THE VALUE OF THE GOODS

ONLY.

• NO LIABILITY IS ACCEPTED FOR CONSEQUENTIAL OR

INDIRECT LOSSES.

• COMPLAINTS CANNOT BE ACCEPTED UNLESS NOTIFIED IN

WRITING WITHIN THREE DAYS OF DELIVERY.

Trakic A., et al., Law for Business, (Sweet & Maxwell Asia: Malaysia, 2018) at p 187.
6
 Exemption Clauses in Malaysia
• The Contracts Act 1950 contains no
provision dealing with exemption clauses.

• The Malaysian courts have followed English

common law when considering this aspect of
law.

If both parties knowledge the exemption clause because

Three step approach (three hurdles) of the previous
clause Then the
.

Step 1 - Is it a term of the contract / has it

been incorporated into the contract? judge will make

PlantitIdefendant
complained of?

Step 3 – Is it unfair?
/weathe
Step 2 - Does it cover the breach -

8
 Step 1 - Is the EC a term of the
contract?
vexations itsefcontract
• Incorporation of EC by: the

• Signature;

• Notice; and

• Previous Course of Dealings -if one of can prove

parties /
knowledg e the
bothparties
clause because
exemption course of
9

of the previous clause

dealing
.
Ihe
examption
term of
is
applied as a

• L’Estrange v Graucob Ltd [1934] 2 KB 394 contract

• The plaintiff purchased a cigarette vending machine for use in misrepresentedIf

defant
her cafe. She signed a sales agreement which stated in small means ExYP .

print 'Any express or implied, condition, statement of warranty,

statutory or otherwise is expressly excluded'. The vending
# TTE
machine did not work and the plaintiff sought to reject it under T A
the Sale of Goods Act for not being of merchantable quality
(terms implied by statute).
• Held: In signing the sales agreement she was bound by all
the terms contained in the agreement irrespective of
whether she had read it or not.
favour of the defant
The judge was in
failure to
plaintiff's it
10

The court said

the
was
read the contents before Signing
immaterial
A TRY'
- -

-signEBID
& El t is parties
under 2 condition
EC
may
not be applicable unfair to of the
↳ signature obtain by fraud/misrepresented
↳ EC is
-

one
a
 and spoken
notice
sign - -for a ec to work
in
on an unwritten
come Contract ,
defaudent must provide
• Unsigned documents (eg, tickets, holiday brochures, reasonable and
notices posted in hotel rooms) Sufficient notice

• To be a term of the contract, the existence of the EC

must have been brought to the knowledge or notice of
the party against whom it is to be used.

• Without notice, the EC is ineffective!!

11

Notice must be Reasonable & Sufficient

• The burden is on the party seeking to rely on the

exemption clause to establish that reasonable notice
had been given.

• What in fact is reasonable notice will depend on

the following factors:

12
 1. Nature of Document
• The document containing the EC must be one which a reasonable
person would expect to find contractual terms.
• Would a reasonable person expect to find contract terms in, for example, a
mere docket or receipt?
• Jenifer Mcalpin Lynn & Ors v AK Ludin bin PG Salimin & Anor (504)
MD 3
P & husband were passengers in a water taxi owned by 2nd dft. Water taxi
collided with a boat. Driver of water taxi and P’s husband died. On the
back of the receipt for the fare was written ‘all passengers are at their own
risks’. One of the issues was whether the exclusion clause on the back of
the receipt exonerated the second defendant from liability.
• HELD: To rely on the EC, the 2nd dft had to show that he had given
reasonable notice of the EC to the passengers. The passenger would not
consider a receipt to be a contractual document and would not expect
it to contain contract terms. Therefore, the EC was ineffective and did
not protect the 2nd dft.
13

2. Degree of Notice

• At the time of the contract, reasonable steps

should have been taken to bring the EC to the
other party’s notice.

14