Liability under Contract and Torts.

1. First issue: Whether the contractor is contractually obligated to provide valves of a certain
specifications?
1.1. If the contract specifies the type of valves, then the contractor must supply valves in
accordance to the contract
1.1.1.In Pacific Inter-Link Sdn Bhd v Aikbee Timbers (Sabah) Sdn Bhd [2009] 6 MLJ 673 HC,
“…the plaintiff alternatively contends that under common law, TBR-122 was a sale by
description, which the defendant failed to provide. It is submitted that the goods
supplied must comply with the contract description set out in the contract. As TBR-122
contained an express term relating to the timber specifications, it amounted to a
condition to be fulfilled by the defendant. The test to ascertaining whether such
description amounts to a condition is that 'every item in a description which
constitutes a substantial ingredient in the identity of the thing sold is a condition'…
Further applications of the principle can be found in Tradax Export SA v European Grain
& Shipping Ltd [1983] 2 Lloyd's Rep 100 where a clause referred to the goods as 'Goods
in bulk U.sA. solvent extracted toasted soyabean meal — maximum 7.5% fibre', it was
held that '7.5% fibre' was part of the description…”
1.1.2.Based on this case, we can see that should a contract provide specifications for a
product, the parties are obliged to follow the specifications.
1.2. If the contract does not specify the type of valves, then the parties can be bound to terms
implied by the contract.
1.2.1. Based on SABABUMI (SANDAKAN) SDN BHD v DATUK YAP PAK LEONG [1998] 3 MLJ
151 FC There are 3 types of implied terms
1.2.1.1. which the court infers from evidence that the parties to a contract must have
intended to include it in the contract though it has not been expressly set out in
the contact.
1.2.1.1.1. Test used –
1.2.1.1.1.1. Subjective test - such a term to be implied by a court is 'something
so obvious that it goes without saying, so that if, while the parties
were making their bargain, an officious bystander were to suggest
some express provision for it in the agreement, they would testily
suppress his with a common "Oh, of course".'
1.2.1.1.1.2. Give business efficacy to the transaction of the contract of both
parties - simply means the desired result of the business in question.
 1.2.1.2. by operation of law
1.2.1.3. by custom or usage of any market or trade which is reasonable
1.2.2. Based on this case, there would be a need to prove that the contract implies that
valves supplied must be to a certain standard (not fake/counterfeit)
1.3. In conclusion, before the contractor can be held liable for supplying fake valves, there is a
need to first prove that supplying fake valves was contrary to the contract
2. Second issue: What are the standards for inspection required by the contract
2.1. Express terms of the contract
2.1.1.In the case of Long Kee Piling Works Sdn Bhd v Stradex Corporation Sdn Bhd [2011]
MLJU 1449 HC, the court held that parties are bound by the express terms on the
contract. In this case “The words of the contract PI are manifestly clear and
unambiguous, without any room for doubt or vagueness. Clause 6 which is the subject
of contention, sets out in certain terms that D bears the responsibility of ensuring
adequate access to the site for P's machinery and to provide and maintain a site
suitable for P's heavy plant/equipment in order to carry out piling…There was no
corresponding obligation placed on P to ensure that the site could withstand their
machinery…”
2.2. Implied terms of the contract
2.2.1.In the case of Tropical Network Sdn Bhd v Geo-Chem Inspection (M) Sdn Bhd (FIMA
Bulking Services Bhd, third party) [2011] 8 MLJ 359 HC “…of It is not difficult to discern
the implied terms of the contract in this case. In the first place, it is not in dispute that
the defendant is a company licensed by the Malaysian Palm Oil Board (MPOB) to act as
surveyors in the import and export of palm oil and palm oil based products. Neither is it
in dispute that the appointment of the defendant of 14 December 2006 was pursuant
to the requirement of the MPOB that a licensed surveyor be appointed to supervise
the export of palm oil based products and the appointment. From these facts, quite
clearly, the defendant was hired specifically to provide surveying services for the
discharge of the Lorol cargo from shore tank 56 to the vessel. In light that the
defendant was to supervise the discharge of the cargo, it is reasonable and necessary
to give business efficacy to the contract for a term to be implied that the quantity and
quality of the cargo will not be compromised whilst under their supervision…”
2.2.2.The court accepted that it can be implied that a Licensed Surveyor must ensure that
the quality of the cargo wont be compromised under his supervision, the same test in
 SABABUMI (SANDAKAN) SDN BHD v DATUK YAP PAK LEONG [1998] 3 MLJ 151 FC has
to be applied to prove the implied term of the contract
3. Third issue: Whether Contractor is liable for negligience
3.1. The element of Negligence is that
 Exist a duty of care
 Breach of Duty
 Damages
 Causation
3.2. Based on the case of Lok Kok Beng & 49 Ors v Loh Chiak Eong & Anor [2015] 4 MLJ 734 FC
the three main elements of Duty of Care are-
3.2.1.Foreseeability
3.2.1.1. “…The rule in the case of Heaven v Pender (1883) 11 QBD 503 as quoted above
envisaged that a man ought to have foreseen certain consequences if he created
a real risk of them. The test is whether damage to someone in the plaintiff’s
position was a reasonably foreseeable consequence of the defendant’s
negligence…”
3.2.2.Proximity
3.2.2.1. “…The most difficult ingredient to prove in establishing a duty of care is the
requirement of sufficient proximity between the claimant and the defendant. The
court would have to look at the closeness of the relationship between the parties
and other factors to determine sufficient proximity based on the facts and
circumstances of each case…”
3.2.3.Public Policy
3.2.3.1. “…consider whether public policy requires that liability should not attach…”
3.3. Therefore…
4. Breach of duty of care
5. Damages