In Robophone Facilities Ltd v Blank  3 All ER 128, Diplock LJ said of liquidated damages clauses: “I see no reason in public policy why the parties should not enter into so sensible an arrangement under which each knew where they stand in the event of a breach by the defendant and can avoid the heavy costs of proving the actual damage if litigation ensues. ”However, the Malaysian courts chose to travel a different path — one trodden by the Indian courts — by not recognising such clauses and equating them with penalties under which damages have to be proved in the usual way except that the stipulated sum operates as a ceiling on recoverable damages.
Then recently, along came the case of Cubic Electronics Sdn Bhd (in Liquidation) v Mars Telecommunications Sdn Bhd  6 MLJ 15 which sought a formula applicable to both liquidated damages and deposits that reconciles with the latest English position. That formula is perceived to be more precise, easier to apply, makes better commercial sense, of more universal application, and cuts down on the uncertainties of the exercise of the court’s discretion. Has the Federal Court succeeded in achieving the desired objectives? At the heart of this matter is the construction of section 75 of the Contracts Act 1950 which
has perplexed many a judicial mind. Does this section also prevail over the liquidated damages clauses for late delivery of vacant possession by the developer and late payment interest imposed on the purchaser in the statutory sale and purchase agreements under the housing legislation?
These issues will be discussed in this seminar.
- Understand the nature of liquidated damages, penalties and deposits
- Aware of the evolution of the law on these issues in Malaysia as well as in the relevant
jurisdictions of England and India to gain a better perspective
- Know the current law on these issues in Malaysia
- Comprehend these issues as pertain to contracts
under the housing legislation
- Know the uncertainties and controversies that
- Able to identify the best course to adopt when
faced with these issues
Dr Teng Kam Wah holds a PhD in construction law from the University of Malaya. He obtained both his LLB Hons and LLM degrees from the University of London. He first graduated with a science degree from the University of Malaya, where he was awarded the University of Malaya Book Prize. He is a Fellow of the Chartered Institute of Arbitrators.
He was, for a brief period, the Group Legal Manager of one of the largest construction, infrastructure and property
development companies in Malaysia where he gained industry experience. He was the 1st prize winner of the
Vincent Powell-Smith Competition in construction law. He has more than twenty law articles published in journals. He
has taught law part-time at the University of Malaya. He is the author of the book Construction Defect Claims in Malaysia
(Sweet & Maxwell, 2019). He practises in construction dispute resolution under his own law firm as counsel, adjudicator, and arbitrator.
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