Professional Documents
Culture Documents
Penalties in a Commercial
Contract
By
Understanding Remedies &
Penalties in a Commercial Contract
Remedies in the event of breach
Agreed Damages clause
Penalty clause
Exclusion clause
Limiting damages clause
Proving Damages
Remedies available in event of
Breach
Damages
Specific performance
Injunction
Liquidated Agreed Damages
Penalty Damages
Forfeiture of Deposit
Breach of Contract
Breach of contract happens where there
is an actual failure by a party to the
contract to perform his obligations under
the contract or an indication of his
intention not to do so.
http://en.wikipedia.org/wiki/Warsaw_Convention
Warsaw Convention
In particular, the Warsaw Convention:
a) mandates carriers to issue passenger
tickets
b) requires carriers to issue baggage
checks for checked luggage; and
c) limits a carrier's liability
Warsaw Convention
Article 22:
In the carriage of passengers the liability of
the carrier for each passenger is limited to
the sum of 250,000 francs (RM707,036.33).
In the carriage of registered luggage and of
goods, the liability of the carrier is limited to
a sum of 250 francs (RM706.90) per
kilogram.
Exemption clause in carpark - Chin
Hooi Nan v Comprehensive Auto
Restoration Service Sdn Bhd
[1995] 2 MLJ 100
The appellant agreed to have his car
waxed and polished by the respondents.
He left his car at the respondent’s
premises and was given a receipt with
exemption clause at the back of it.
The appellant’s car was damaged but his
suit was dismissed due to the exemption
clause.
Chin Hooi Nan v Comprehensive
Auto Restoration Service Sdn Bhd
[1995] 2 MLJ 100
The High Court allowing the appeal held
that an exemption clause does not
exonerate the respondents from the
burden of proving that the damage caused
to the car were not due to their negligence
and misconduct.
They must show that they had exercised
due diligence and care in handling the car
Chin Hooi Nan v Comprehensive
Auto Restoration Service Sdn Bhd
[1995] 2 MLJ 100
The respondents had not adduced any
evidence to show that they had exercised
due and care and there was ample
evidence to show that they had been
negligent.
Hence, the appeal is allowed.
Exclusion clause in banks
Bank’s terms and conditions:
Article 16 - Liability and Indemnity
We shall only be liable for your direct losses
and damages caused solely by our gross
negligence and/or wilfull default. In no event
will we be liable for any other losses or
damages, whether direct or indirect,
exemplary, consequential, incidental,
punitive, special losses or
Exclusion clause in banks
damages, or loss of income, profits or
goodwill (including those of any third
parties and even if advised of the same)
however arising, and all such damages
are expressly included.
Exemption clause in Courier
Company (CC)
CC's Liability