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While the claim for quantum meruit arose historically from the
basis of an implied contract, a quantum meruit claim is now
also recognized as a claim in restitution, an obligation
imposed by law without any reference to any promise or
agreement. In Kejuruteraan Elektrik Usahamaju Sdn. Bhd.
v. Zilatmas (M) Sdn. Bhd., the High Court held that it is
heartening to note that in the event the contract is
unenforceable in law, the builder may still recover by way of
restitution.
Performance prevented
Effect of failure
Contracts Act
to
perform
under
s56
In Chye Fook & Anor The Teng Seng Realty Sdn. Bhd.,
the High Court held that the plaintiff had a right to rescind
the contract where time was of the essence. The Court also
stated by way of obiter that under s76 of the Contract
Act, a party who rightly rescinds a contract is entitled
to compensation for any damage which he has
sustained through the non-fufillment of the contract.
Where the parties have not made time the essence of the
contract, then s56(2) of the Contracts Act applies. In this
situation, a failure to perform at the time specified does not
make the contract voidable but the promisee is only entitled
If the completion date has expired and the party takes too
long to act to act, then the party has waived his right that
time is of essence of the contract. In Sim Chio Huat v.
Wong Ted Fui, the Federal Court held that the respondent
by allowing the delivery date to pass and by acquiescing in
the work continuing under the agreement, had waived the
stipulation that time is of the essence of the agreement.