Entire Contract

WHAT IS

ENTIRE CONTRACT?

                               Ming & Co v Leong Ping Ching

 [1964]  30 MLJ 312

 (Malaysia)

A contract for the construction of an extension to a maternity home in Kuala Lumpur at a price of $28,500 was concluded by an exchange of correspondence.  Following disputes about the time being taken to complete the work, although no completion date was agreed, the defendant owner alleged that the contractors had abandoned the contract and that she was entitled to complete the work.  The plaintiff contractors claimed that they were entitled to a quantum meruit of $11,119 of which $9,000 had been paid.  The defence was that this was an entire contract and, on the authority of Sumpter v Hedges 1898, Digest 161, the plaintiffs could not sue on a contract which they had abandoned.  Gill J held;  ‘The answer to that is that in the first place the plaintiffs did not abandon the work, and, in the second place, this was not an entire contract.  An entire contract is one in which the entire completion of the work by the contractor is a condition precedent to payment.  To my mind, a contract in respect of which progress payments are made from time to time is not an entire or lump sum contract’.  The quantum meruit of $11,119 was allowed, less the $9,000 already paid to the contractors.

Case judicially considered:

Sumpter v Hedges 1898, Digest 64.

 ENTIRE CONTRACT,

SUBSTATIAL PERFORMANCE

Payment For Works Done

Damages For Defective Works

& Completing The Contract

Kunchi Raman, K P v Goh Bros. Sdn. Bhd.

[1978] 1 MLJ 89

(Malaysia)

The plaintiff, K.P. Kunchi Raman, entered into a labour-only contract with the defendant for the laying of water pipes between Mak Mandin and Prai, and Mak Mandin and Jalan Raja, Butterworth, including the reinstatement of a cycle track.  The contractor claimed $11,656 as the balance payable to him under the contract.  The defendant counter claimed for the repayment of $55,024 for unsatisfactory work already completed, and failure to complete all items of contract work, amounting to failure to complete the contract.

Gunn Chit Tuan J in the High Court held that the contract was an entire contract, but that the doctrine of substantial performance should be applied’ .... considering the nature of the defects, the cost of rectifying them and the balance of the work undone.  I was inclined to the view and found that in all the circumstances of this case the plaintiff had substantially completed the contract.  For that reason I held that the defendant was not entitled to repayment of the said sum of $55,024 paid to the plaintiff who was entitled to claim for any balance due to him for work done’.  This would have resulted in the plaintiff’s claim succeeding and the defendant obtaining nothing.  However, the defendant was entitled to damages for the defective work and for completing the contract, and since this entitlement exceed the plaintiff’s claim, following Hanak v Green 1958, the defendant  was entitled to judgement for $6,047.

Cases judicially considered:

Appleby v Myers 1867

Hanak v Green 1958

Hoenig v  Isaacs 1952, Digest 123

Sumpter v Hedges 1898, Digest 161