1.

The appellant did not breach any part of the contract under Malaysia Incognito
Distribution Agreement (MIDA).
1.1

Time ceases to be the essence of the contract.

1.1.1

Effect of failure to perform at fixed time, in contract which time is

essential. Under Section 56 (1) of Contract Act , When a party to a
contract promises to do a certain thing at or before a specified time, or
certain things at or before specified times, and fails to do any such thing
at or before the specified time, the contract, or so much of it as has not
been performed, becomes voidable at the option of the promise, if the
intention of the parties was that time should be the essence of the
contract. Failure

1.1.2

Application: Therefore, in applying to this case, the promisee exercises

the option to continue the contract and automatically time ceases to be
the essence of the contract.

1.1.2

The delayed delivery on behalf of the appellant did not make he breach
the contract as the respondent agreed to continue the contract.
In the Case of Sim Chio Huat v. Wong Ted Fui [1983] 1 MLJ 151 1
SALEH ABBAS, F.J IN DELIVERING THE JUDGMENT OF THE COURT

if in contract in which time is of essence, a party fails to perform it by the

stipulated time, the innocent party has the right either to rescind the
contract or treat it as still subsisting. If he treats it either expressly or by
conduct as still conducting, the contract exists but time ceases to be of
the essence and becomes at large.
Application: Therefore, applying to this case, the act of the defendant by agreeing
to continue the contract and not to repudiate he contract indicates that the
contract was still going on. Thus, the appellant was not in breach of the contract.

1.2

There is mutual agreement between the appellant and the respondent.

(Collateral Contract)
1.2.1

Mutual agreement may modify or rescind a contract.

Under Section 63 of the Contract Act if a parties to a contract agree to
substitute a new contract, the original contract need not to be performed

1.2.2
2.0
The defendant was in breach of the MIDA as the headphone was not in merchantable
quality.
2.1

Definition of merchantable quality

Under Section 16 (1) SOGA 1957:
Subject to this Act and of any other law for the time being in force, there is
no implied warranty or condition as to the quality or fitness for any particular
purpose of goods supplied under a contract of sale

2.1.1

2.2

In the case of Rogers And Another v. Parish (Scarborough) Ltd. And

Another [1987] 1 QB 933 the Court of Appeal held that goods which
were defective on delivery were not to be taken to be of merchantable
quality for the purpose of section 14 of the Sale of Goods Act 1979
(equivalent to our section 16 of the Sale of Goods Act 1957) by reason
only of the fact that the defects had not destroyed the workable character
of the goods, and it was not relevant to whether the goods had been of
merchantable quality upon delivery that the defects had subsequently
been repaired; that in respect of any passenger vehicle the purpose for
which goods of that kind were commonly bought would include not only
the purchasers purpose in driving it but that of doing so with the degree
of comfort, ease of handling, reliability and pride in its appearance
appropriate for the market at which the vehicle was aimed; that defects
which might be acceptable in a second hand vehicle and which would not
therefore render it unmerchantable were not reasonably to be expected in
a vehicle sold as new; and that the plaintiffs were entitled to repudiate the
contracts since the vehicle was not as fit for its purpose as the plaintiffs
were entitled to expect.

The goods does not fit with its particular purpose.

2.2.1

The goods must be reasonably fit for their purposes.

2.2.2

Section 16(1) (a) of Contract Acts1957

Implied condition that the goods must be reasonably fit for a particular
purpose of the buyer

2.2.3

In the case of Arcos Ltd v E A Ronaasen & Sons, Staves of inch thick
were ordered. Only 15% conformed to the requirement. Despite the fact
that the goods were reasonably fit for their purpose, The Court held that
the buyers were entitled to reject them for failing to correspond with the
contract description.
Application: In applying to this case, the quality of headphones didnt
match with its purposes and specification due to the inefficiency on behalf
of the respondent.

2.2.4

The needs of a customer who purchased Incognito were higher than the
purchaser of the ordinary headphones. It can be illustrated in the case of
Rogers v Parish, the plaintiff bought a Range Rover. Later, he found out
that his car was unsatisfactory. Unsatisfactory in this case refers to the
inability of the Range Rover to perform its duty as a usual luxury car.
Application: Therefore, it can be proved in this case that although the
headphones were indeed in a working condition, however it didnt match
with its specification. The purchasers who bought Incognito would want
the headphone to work in an excellent condition, not as a usual
headphone.

Application: In applying to this case, the quality of headphones didnt

match with its purposes and relevant customer.