WHETHER PURCHASER ENTITLED TO CLAIM LIQUIDATED ASCERTAINED DAMAGES (LAD)

Bob has signed a contract with Developer Y to buy a condominium for RM 250,000. Bob was supposed to get vacant possession on October 23, 2021, according to the SPA. Unfortunately, developer Y walked away from the project. Bob also contributed RM60,000 to the purchase price and then drafted a letter requesting that the property’s development be finished and vacant possession be handed over by December 12, 2021. Developer Y has failed to do so again. Bob then filed a case against developer Y, seeking a ruling that the defendant had broken the provisions of the SPA, as well as RM60,000 in restitution and liquidated ascertained damages (LAD).

Q: Is there any statutory or contractual period for Bob to terminate his contract?

A: No. This is because as long as the breach of contract continues, Bob retains the right to terminate the SPA.

Q: Does Bob have to give notice of the claim for LAD?

A: No. Bob is not required to give any notice of an intention to file a claim for LAD under Schedule H. However, under section 56(3) of the Contract Act 1950, Bob is only required to give notice of his claim for LAD if he have indicated to the developer when the SPA became voidable or if Bob is ready to accept delivery of vacant possession at a later date.

Q: Developer Y held that LAD would only be claimable if Bob had paid the purchase price in full. Is this legal?

A: No, Bob does not have to pay in full to be eligible for LAD benefits. Because the house was not finished, the purchase price of an abandoned project would not have been paid in full.

Q: When can Bob claim for LAD?

A: Bob is entitled to claim for LAD immediately after the expiry of the contractual deadline for the defendant to hand over vacant possession of the property which is 23 October 2021.

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