{"id":5971,"date":"2025-11-16T09:10:35","date_gmt":"2025-11-16T01:10:35","guid":{"rendered":"https:\/\/yhalaw.com.my\/?p=5971"},"modified":"2025-11-16T09:10:38","modified_gmt":"2025-11-16T01:10:38","slug":"breach-of-contract-court-of-appeal-affirms-lad-contractor-liable-for-delay-extra-claims-rejected","status":"publish","type":"post","link":"https:\/\/yhalaw.com.my\/zh\/breach-of-contract-court-of-appeal-affirms-lad-contractor-liable-for-delay-extra-claims-rejected\/","title":{"rendered":"BREACH OF CONTRACT \u2013 COURT OF APPEAL AFFIRMS LAD: CONTRACTOR LIABLE FOR DELAY, EXTRA CLAIMS REJECTED"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\"><strong>1. Summary and Facts<\/strong><\/h3>\n\n\n\n<p>In Savelite Engineering Sdn Bhd v Askey Media Technology Sdn Bhd and another appeal [2025] MLJU 2258, Askey Media engaged Savelite to construct a factory in Penang for RM8.6 million, with a completion date of 4 September 2016 and liquidated and ascertained damages (\u201cLAD\u201d) fixed at RM3,300 per day. Practical completion was only certified on 15 September 2017 \u2013 a delay of 376 days. The Superintending Officer (\u201cSO\u201d) granted an extension of time (\u201cEOT\u201d) of 143 days, leaving Savelite liable for 233 days of LAD amounting to RM768,900.<\/p>\n\n\n\n<p>Askey Media also claimed loss of rental profits and indemnity payments to its tenant arising from the delay. The High Court allowed the LAD but dismissed the additional claims. Both parties appealed.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>2. Legal Issues<\/strong><\/h3>\n\n\n\n<p>\u2022 Whether the defendant was estopped from denying that time was of the essence, having accepted the Certificate of Non-Completion (\u201cCNC\u201d) and submitted multiple EOT applications.<br>\u2022 Whether the Plaintiff or Defendant was responsible for the delay.<br>\u2022 Whether time was the essence of the contract.<br>\u2022 Whether the quantum of damages was proportionate and reasonable.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>3. Court\u2019s Findings<\/strong><\/h3>\n\n\n\n<p>\u2022 The court dismissed both appeals from the plaintiff and defendant.<br>\u2022 The delay was attributable to the Defendant, as time was of the essence in the contract, and the slow progress of works resulted in the delay.<br>\u2022 The Court varied the High Court\u2019s order by imposing 5% interest per annum on the liquidated damages award, effective from 26.1.2017 until full settlement, pursuant to its discretion, as provided for under the contract.<br>\u2022 Equitable estoppel did not apply as the contract expressly stipulated that time was of the essence, and the completion deadline was clear.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>4. Practical Implications<\/strong><\/h3>\n\n\n\n<p>This decision affirms several important legal principles governing the contract including:<br>\u2022 The liquidated damages clauses are generally enforceable, provided they are genuine pre-estimate of loss and not a penalty.<br>\u2022 The burden lies upon the contractor to establish that a delay is excusable, as failure to do so renders the contractor liable for liquidated damages.<br>\u2022 The contract must be properly drafted for liquidated damages clauses as it will put the developers or employers a strong legal protection in the event of delay.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In Savelite Engineering Sdn Bhd v Askey Media Technology Sdn Bhd [2025] CLJU 1808, the Court of Appeal upheld the employer\u2019s entitlement to RM768,900 in liquidated damages (LAD) for a 233-day delay in completing a factory project. The Court held that time was of the essence, and the contractor was estopped from denying liability after applying for extensions of time. Applying section 75 of the Contracts Act 1950 and Cubic Electronics, the LAD was found proportionate (~9% of the contract price) and thus reasonable compensation. Claims for additional losses, such as lost rental profits and indemnity to tenants, were barred where an LAD clause exists.<\/p>\n","protected":false},"author":1,"featured_media":5972,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1568],"tags":[3714,2286,3706,3715],"class_list":["post-5971","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-contract-law","tag-construction-disputes","tag-contract-law","tag-court-of-appeal-malaysia","tag-liquidated-damages"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>BREACH OF CONTRACT \u2013 COURT OF APPEAL AFFIRMS LAD: CONTRACTOR LIABLE FOR DELAY, EXTRA CLAIMS REJECTED | Yew Huoi, How &amp; Associates | Leading Malaysia Law Firm<\/title>\n<meta name=\"description\" content=\"In Savelite Engineering Sdn Bhd v Askey Media Technology Sdn Bhd [2025] CLJU 1808, the Court of Appeal upheld the employer\u2019s entitlement to RM768,900 in liquidated damages (LAD) for a 233-day delay in completing a factory project. The Court held that time was of the essence, and the contractor was estopped from denying liability after applying for extensions of time. Applying section 75 of the Contracts Act 1950 and Cubic Electronics, the LAD was found proportionate (~9% of the contract price) and thus reasonable compensation. Claims for additional losses, such as lost rental profits and indemnity to tenants, were barred where an LAD clause exists.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/yhalaw.com.my\/zh\/breach-of-contract-court-of-appeal-affirms-lad-contractor-liable-for-delay-extra-claims-rejected\/\" \/>\n<meta property=\"og:locale\" content=\"zh_TW\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"BREACH OF CONTRACT \u2013 COURT OF APPEAL AFFIRMS LAD: CONTRACTOR LIABLE FOR DELAY, EXTRA CLAIMS REJECTED | Yew Huoi, How &amp; Associates | Leading Malaysia Law Firm\" \/>\n<meta property=\"og:description\" content=\"In Savelite Engineering Sdn Bhd v Askey Media Technology Sdn Bhd [2025] CLJU 1808, the Court of Appeal upheld the employer\u2019s entitlement to RM768,900 in liquidated damages (LAD) for a 233-day delay in completing a factory project. The Court held that time was of the essence, and the contractor was estopped from denying liability after applying for extensions of time. Applying section 75 of the Contracts Act 1950 and Cubic Electronics, the LAD was found proportionate (~9% of the contract price) and thus reasonable compensation. Claims for additional losses, such as lost rental profits and indemnity to tenants, were barred where an LAD clause exists.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/yhalaw.com.my\/zh\/breach-of-contract-court-of-appeal-affirms-lad-contractor-liable-for-delay-extra-claims-rejected\/\" \/>\n<meta property=\"og:site_name\" content=\"Yew Huoi, How &amp; Associates | Leading Malaysia Law Firm\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/yhalaw\" \/>\n<meta property=\"article:published_time\" content=\"2025-11-16T01:10:35+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-11-16T01:10:38+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/yhalaw.com.my\/wp-content\/uploads\/2025\/11\/breachchs.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"630\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"YHA Admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"\u4f5c\u8005:\" \/>\n\t<meta name=\"twitter:data1\" content=\"YHA Admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"\u9810\u4f30\u95b1\u8b80\u6642\u9593\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/yhalaw.com.my\\\/breach-of-contract-court-of-appeal-affirms-lad-contractor-liable-for-delay-extra-claims-rejected\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/yhalaw.com.my\\\/breach-of-contract-court-of-appeal-affirms-lad-contractor-liable-for-delay-extra-claims-rejected\\\/\"},\"author\":{\"name\":\"YHA Admin\",\"@id\":\"https:\\\/\\\/yhalaw.com.my\\\/#\\\/schema\\\/person\\\/f778c60834a29c5ec215ab62d3207bef\"},\"headline\":\"BREACH OF CONTRACT \u2013 COURT OF APPEAL AFFIRMS LAD: CONTRACTOR LIABLE FOR DELAY, EXTRA CLAIMS REJECTED\",\"datePublished\":\"2025-11-16T01:10:35+00:00\",\"dateModified\":\"2025-11-16T01:10:38+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/yhalaw.com.my\\\/breach-of-contract-court-of-appeal-affirms-lad-contractor-liable-for-delay-extra-claims-rejected\\\/\"},\"wordCount\":359,\"publisher\":{\"@id\":\"https:\\\/\\\/yhalaw.com.my\\\/#organization\"},\"image\":{\"@id\":\"https:\\\/\\\/yhalaw.com.my\\\/breach-of-contract-court-of-appeal-affirms-lad-contractor-liable-for-delay-extra-claims-rejected\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/yhalaw.com.my\\\/wp-content\\\/uploads\\\/2025\\\/11\\\/breachchs.jpg\",\"keywords\":[\"Construction Disputes\",\"contract law\",\"Court of Appeal Malaysia\",\"Liquidated Damages\"],\"articleSection\":[\"Contract Law\"],\"inLanguage\":\"zh-TW\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/yhalaw.com.my\\\/breach-of-contract-court-of-appeal-affirms-lad-contractor-liable-for-delay-extra-claims-rejected\\\/\",\"url\":\"https:\\\/\\\/yhalaw.com.my\\\/breach-of-contract-court-of-appeal-affirms-lad-contractor-liable-for-delay-extra-claims-rejected\\\/\",\"name\":\"BREACH OF CONTRACT \u2013 COURT OF APPEAL AFFIRMS LAD: CONTRACTOR LIABLE FOR DELAY, EXTRA CLAIMS REJECTED | Yew Huoi, How &amp; Associates | Leading Malaysia Law Firm\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/yhalaw.com.my\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/yhalaw.com.my\\\/breach-of-contract-court-of-appeal-affirms-lad-contractor-liable-for-delay-extra-claims-rejected\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/yhalaw.com.my\\\/breach-of-contract-court-of-appeal-affirms-lad-contractor-liable-for-delay-extra-claims-rejected\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/yhalaw.com.my\\\/wp-content\\\/uploads\\\/2025\\\/11\\\/breachchs.jpg\",\"datePublished\":\"2025-11-16T01:10:35+00:00\",\"dateModified\":\"2025-11-16T01:10:38+00:00\",\"description\":\"In Savelite Engineering Sdn Bhd v Askey Media Technology Sdn Bhd [2025] CLJU 1808, the Court of Appeal upheld the employer\u2019s entitlement to RM768,900 in liquidated damages (LAD) for a 233-day delay in completing a factory project. 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The Court held that time was of the essence, and the contractor was estopped from denying liability after applying for extensions of time. Applying section 75 of the Contracts Act 1950 and Cubic Electronics, the LAD was found proportionate (~9% of the contract price) and thus reasonable compensation. 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