INTRODUCTION

A contract is a promise between two parties that is legally binding. Promise here means
one of the parties to a contract agreed to perform certain duty on a specified time. When one
of the parties failed to perform the promise, then it is known as breach of contract. In other
words, breach of contract means failure to what the contract requires. In the case of (Woodar
Investment Development Ltd v Wimpey Construction UK Ltd,1980) the judge contended
that the guilty party breached the contract as he was not ready, willing and able to perform
the contract. Therefore, breach occurs when one of the parties failed to fulfill the obligation
stipulated under the contract they agreed upon.
There are few ways of breaching contract. First one is fails to perform the promise the
parties made through the contract. Secondly, one of the parties behaves in a manner where it
shows obvious intention of the parties to not to perform the obligations under contract in the
future. Lastly, the defaulting parties own act makes it impossible to perform the contract. In
the case of (Maritime National Fish Ltd. v Ocean Trawlers Ltd,1935) it stated that act that
makes it impossible to perform a contract is a method to discharge a contract and is breach of
contract.
Mainly there are four type of breach. The first one would be the partial breach or also
known as minor breach. This happened when the party who breached the contract failed to
perform some part of the obligation even though the service or the item has been delivered. In
this situation, the party who suffered from the breach, only can claim for legal remedy if the
breach resulted in financial loses. For an example, a web designer who completed his work in
siting a new web for his customer but failed to deliver it on the date the customer specified,
then it is considered minor breach.
Secondly, material breach where one party failed to perform the material facts or
specified obligations under the contract. For instance, A asks B to send him 100 boxes of
orange juice but B send 50 boxes of apple juice to A, then this is considered as material
breach. This is because, type of juice requested by A to B is orange juice which is a material
fact in their contract. For this, the failure to perform a part of the contract allows the injured
party to ask for damages.
Thirdly, is the fundamental breach. This happened when the suffered party take action
against the party in breach for damages and also terminate the contract entered if they wanted
to do so. This has been illustrated in the case of (White & Carter (Councils) v
McGregor,1962) the court held that fundamental breach permits the injured party the right to
terminate the contract.
Lastly, is known as anticipatory breach. It means when a non-breaching party founds
out that the other party will not perform or will fail to perform his obligations under the
contract in the future therefore, the non- breaching party may sue and terminate the contract
with the other party.

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 However, under the common law position there are two more traditional type of
breach and they are the breach of an essential term and breach of warranty. Under the
Contract Act 1950, this traditional approach has not been incorporated. However, the
remedies for the breach somehow can be found under this act. The question of breach of
essential term will arise when the party in breach failed or refused to perform the obligations
“in its entirety”. The term “in its entirety” means every promise made under the contract must
be fulfilled. In Malaysia, we do not really focus on the part of the entirety. As long as the
breach is on the part of essential term of contract then then the party who suffered loss is
entitled to rescind the contract and claim for damages. In the case of (Tramways Advertising
Pty Ltd v Luna Park,1938) the court held that, the plaintiff did not perform in accordance to
the terms. Plaintiff agreed to display on trams on their advertising board for 8 hours per day
for 3 sessions each. However, plaintiff only advertise for 2 sessions. Therefore, the
defendants granted to rescind the contract and claim for damages as the fact is essential term
of the contract.

In breach of warranty, the court will interpret whether such act of party in breach
went to the root of the contract.(Bettini v Gye,1876). If it is not, then the party suffered loss is
entitled to claim for damages only and not rescind the contract. In the case of (Tan Chong &
Sons Motor o Sdn Bhd v Alan Mcknight,1983) the judge Tun Salleh Abas held that in the
case of warranty, one party only has the right to claim for damages as the terms of the
contract does not touch the root of the contract.

Apart from breach of essential term and warranty, emerge of new era recognized the
third category known as innominate terms. This is because the traditional approach
sometimes was found not appropriate to apply. To determine this, the court will look into the
consequence of the breach of term. Only if the consequences are serious, then the innocent
party may rescind the contract and claim for damages. However, if the consequences are not
serious, the party only can claim for damages. At the same time, the interpretation of
consequences is based on the court’s discretion.

As we can see from the above discussion, there are many types and ways one
breaching a contract. To save the innocent party from the loss, the non- performance of the
terms of the contract give rise to a remedy to compensate loss suffered by the injured party.
There are varieties of remedies found in the law. However, for the assignment purpose, the
three best remedies that we choose to discuss are damages, specific performance and
restitution.