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Student: Alizada Gulnaz Group: BBA020 Course:1 Teacher: Samadzada Solmaz
CASE • As part of his contractual terms with MinDef, N is supposed to deliver 1000 kilograms of imported fresh meat from New Zealand to the army camp weekly. One day the Ministry of Health of Malaysia announces that all imported fresh meats are banned due to the outbreak of nail and mouth disease abroad until further notice.
Solution • For ease of understanding, I will equally like to use the same procedure as shown above analysis the legal issues that could arise between MinDef and N by using the process called FIRAC – Facts, Issues, Rules, Analysis and Conclusion.
Fact • There are enough facts that established that the above case between MinDef and N direct falls under the law of contract of Sale of Goods, which is a legal agreement that comes into being whenever a party (offeror) agrees to sell something at a specified price to another party (offeree) who has the right to accept or reject the offer to buy such thing for at the specified expected monetary return. This is clearly seen above where MinDef and N mutually agreed for N to be delivering 1000 kilograms of imported fresh meat from New Zealand to the army camp weekly. Although the contract couldn’t continue as a result of the news from Ministry of Health of Malaysia that announces that all imported fresh meats are banned due to the outbreak of nail and mouth disease abroad until further notice.
Issues • The key issue under this case is that any of the parties either MinDef or N may want to sue for a breach of contract given that their agreement falls under the bilateral agreements that both parties mutually agreed to the terms and conditions of the contract. Mainly MinDef may want to sue N for his inability to supply the fresh imported meat as agreed, but is N at fault? If he is, can MinDef claim damages? The legal rules and regulations I will present will clarify the case between Mindef and N.
RELEVANT RULES OF LAW • As evident in this case study that MinDef may wish to sue N for a breach of contract, and there is likely probability that N may also want to sue MinDef for a breach of contract as stated by both parties offer in the sale of imported fresh meat. A critical look at the Act 136 has shown that none of its section explicitly mentioned under which condition that a recipient of an acceptance to an offer could claim innocence on the inability or failures to deliver as agreed in the terms of the contract. But below is an alternative international law by the Convention of International Sales of Goods Art 79. Please note that very important to this case study is section 1 and 4 of the CISG Art 79:
CISG Art. 79 • (1) A party is not liable for a failure to perform any of his obligations if he proves that the failure was due to an impediment beyond his control and that he could not reasonably be expected to have taken the impediment into account at the time of the conclusion of the contract or to have avoided or overcome it or its consequences. • (4) The party who fails to perform must give notice to the other party of the impediment and its effect on his ability to perform. If the notice is not received by the other party within a reasonable time after the party who fails to perform knew or ought to have known of the impediment, he is liable for damages resulting from such non receipt.
LEGAL REASONING AND CONCLUSION • Other legal opinions on the above as it affect MinDef and N: • Evidence from Act 136 of the Malaysian Contract Act 1950 and the prepositions of the above article has indicated that the situation that led to N’s inability to continue to supply the fresh imported meat was beyond his control given the announcement by the ministry banning imported meat till further notice. Although section 4 of this article went further to say that N must as a matter of urgency communicate his inability to continue to supply the fresh imported meat to MinDef, but I think N felt there isn’t any need for that as long as the ministry announcement is a national issue that could easily get to MinDef.
Analysis • As a legal counsel to N, I will like to suggest that N doesn’t bother itself with issues arising from MinDef because the condition that led to its inability to continue the supply of fresh imported meat from New Zealand is a matter of Law that that is beyond its control. In support of arguments in favour of N on it inability is the evidence in section 26 of the Act 136 of Malaysia contract Act 1950 which state thus:
Agreement without consideration, void, unless • 26. An agreement made without consideration is void, unless - it is in writing and registered • (a) it is expressed in writing and registered under the law (if any) for the time being in force for the registration of such documents, and is made on account of natural love and affection between parties standing in a near relation to each other; • Meanwhile a ban on fresh imported meat by Ministry of Health of Malaysia is a matter of law that has invalidate the contractual agreement between MinDef and N, because the goods upon which the agreement was made has become an illegal item. • Depending on the facts in the aforementioned Arts, N has not breach any contract with MinDef and shouldn’t be liable to any damages under the law.
Conclusion • In summary, the Act 136 of Malaysia Contract Act 1950 and few sections from the Convention of International Sales of Goods Acts have seriously helped in analyzing the contractual issues that may arise from the contract of supplying fresh imported meat by N, and the probable chance of any of the parties winning their claim on damages in the breach of contract. In claiming damages as suggested above are the major alternative remedies that are available in the common law for any breach of contract. And in this case, both section 26 and CISG Art 79 have empirically stated that item that is illegal is void and cant be binding on any of the contracting parties in the law courts.
