CONTRACT LAW ON RESTRAINT OF TRADE AND PERFORMANCE

In Cutter v Powell, the widow launched to recover work and labour done by the intestate. The judges considered in their dictum quantum meruit of:-

• 30 Guineas

• 8 Pounds

• 10 Quids

• 600 Shillings

“Whether a contract is an entire one is a matter of construction: it depends upon what the parties agreed…” Who said this and in what locus classicus?

• Tindal CJ in Planche v Colburn

• Denning LJ in Hoenig v Isaacs

• Sinnadurai J in Polygram Records v The Search

• AL Smith LJ in Sumpter v Hedges

Under Malaysian law, which section of the Contracts Act 1950 states that agreements in restraint of trade are void

• Section 10

• Section 28

• Section 40

• Section 73

What happens under Section 40 of the Contracts Act 1950 when a party to a contract refuses to perform, or disables themselves from performing the contract?

• The other party must still perform their obligations

• The contract becomes voidable

• The other party is discharged from further performance

• The contract is automatically renewed.

What was the decision of the trial judge in Millennium Medicare Services v Nagadevan a/l Mahalingam [2015]?

• The limit of 15 km radius from the plaintiff’s branches is reasonable.

• The exception of s28 of CA 1950 applies in this case due to the dissolution of the partnership

• The exception of s28 of CA 1950 is not applicable in this case due to the termination of the partnership

• The plaintiff adduced sufficient evidence to prove that the parties had entered into the said Agreement upon or in anticipation of the dissolution of the partnership practice

1. His Lordship there in that case while acknowledging the strict terms of s. 28 and the need for legislative intervention to change its rigours, yet opted to apply the common law regime (of reasonable restraint) to the issue of restraint of trade.

The learned author of Visu Sinnadurai, Law of Contract (4th Edition) (Lexis Nexis, 2011) opines that this decision was (clearly) wrong in importing a test of reasonableness to determine the validity of a clause in restraint of trade.

3.  

• 1. Vision Cast Sdn Bhd & Anor v Dynacast (Melaka) Sdn Bhd & Ors

• 1. ​​Worldwide Rota Dies Sdn Bhd v. Ronald Ong Cheow Joon

• 1. Percept D’Mark (India) Pvt.Ltd v Zaheer Khan & Anor 

• 1. Gan Yook Chin & Anor v. Lee Ing Chin & Ors 

1. Which of the following is NOT a valid example of restraint of trade?

• 1.  Non-compete clause in an employment contract

• 1. Agreement to not sell products for a limited time in a specific area

• 1. Agreement to provide personal services

• 1. Exclusive dealing agreement between supplier and distributor

 Under Section 38 of the Contracts Act 1950, when must the promisor perform the contract?

• 1. Whenever he likes

• 1. At the time agreed upon or within a reasonable time

• 1. Only when the promisee demands

• Only upon court order

 Ali contracts to deliver 100 chairs to Bina Sdn Bhd by 1st June. On 30th May, Ali offers the delivery, but Bina Sdn Bhd refuses to accept without reason. Is Ali still liable for non-performance?

• 1. Yes, contract is valid

• 1. No, Ali is discharged from the performance

Sarah signs a contract with her employer stating that she cannot work for any competing company in Malaysia for 5 years after leaving the job. Is this clause likely enforceable?

• 1. Yes. She needs to protect the interest of the company

• 1. No. 5 years is too long and unreasonable