Business Law Assignment: Resolving Contractual Disputes in Hong Kong

Desklib provides past papers and solved assignments for students. This report analyzes contract disputes and legal procedures in Hong Kong.

Business Law
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Table of Contents
Introduction......................................................................................................................................3
Problem 1.........................................................................................................................................4
Problem 2.........................................................................................................................................7
Conclusions....................................................................................................................................10
References......................................................................................................................................11
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Introduction
There are several business problems that need to be faced by the business organizations at some
point in time. In this assignment, these problems resolve by prescribing the legislations, rules,
and regulations with the help of several case laws.
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Problem 1
Issue
Before issuing the writ, explain what pre-actions are considered that would attend on behalf of
Jessica Chan?
Rule
In case of breach of contract, the law of Hong Kong protects the rights of the parties when the
contractual parties fail to perform the obligation of the contracts. A breach of contract protects
the innocent p[arty and provide the right to claim damages.
The fact is that where any contract terms are broken which is essential for the continuance of the
contract and its failure destroys the contract according to the decision of the court in case of L
Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235.
Damages
Like the remedies that are equal to the specific performance and injunction and similar the
damages for loss equally claim as compensation and it is available as a right to the parties (Dief,
et. al., 2015). An innocent party has the right to claim damages.
Proceeds of the clause of sale
Where the goods are supplied by the buyer to the seller and seller not satisfies the price of the
purchase goods. There is a fiduciary relationship between the buyer and the seller. The buyer can
claim compensation and make the proceeds of the sale invalid.
Repudiatory breach
In the case of HongKong Fir Shipping v Kawasaki Kisen Kaisha Ltd [1962], 2 QB 26 at 71,
HL, the court held that the contractual obligations of one of the party are relieved due to the
performance conduct of another party.
In the case of Decro-Wall International SA v Practitioners in Marketing [1971] 1 WLR 361 at
368, CA, three courts held that if the defendant makes the payment delay in more than the 2 and
20 days and plaintiff is doubted on the ability to pay the debt of the defendant. It provides the
innocent right to breach the contract and free form the obligations of the contract (Works and
Hasn’t, 2018). There are several acts that lead towards the contract breach. These are:
 Non-payment amount to invalidity
 Nonpayment of the amount of installment considered as a repudiation
 Refusal to make the interim payment amounts to the repudiation
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Anticipatory breach
This is the beach where the party expresses their intention not to perform the contractual
obligations. The innocent party of the contract has two options. First, the innocent party breaches
the contract immediately and sues the party to claim damages. Secondly, the innocent wait for
the performance and ignore the breach. If the guilty party does not perform the contractual
obligation then the innocent party has the right to claim damages, compensation and sue the
guilty party (Burns, et. al., 2018). In case of contractual obligation require specific performance
then the innocent party can claim specific performance or damages if the damages are enough to
compensate the loss or damage.
The damages and its award
In the case of Photo Production Ltd v Securicor Transport Ltd [1980] AC 827, the court held
that in case of failure to perform the contractual obligations if it is primary and in case of breach
of secondary obligations the aggrieved party can claim monetary compensation (Xie and Lee,
2018).
The aggrieved party can claim damages by calculating the amount of loss. With reference to the
case of Ruxley Electronics and Construction Ltd v Forsyth [1996] AC 344, HL, where the court
held that damages are granted where the main and important purpose of the contract is not
fulfilled.
Remoteness of loss
This factor ensures that the innocent party can claim damages that are credit due to the breach of
the contract. This principle explained in the case of Hadley v Baxendale ([1854] 9 Exch. 341)
where the court held that loss occurs due to naturally breach of the contract and the damages of
only reasonable contemplation is liable to be recovered by the innocent party.
Mitigate the loss
In case of breach of contract, the innocent part still tries to mitigate the loss that arises from the
breach of the contractual obligations. It is the duty of the innocent party to take efficient and
effective steps to mitigate the loss and it is upon the defaulting party to prove that the innocent
party did not minimize the loss (ALEXANDER, 2018).
The main purpose of the above-mentioned remedies is to ensure that the rights of the parties are
provided specifically in the contract in addition to the provided rights as per the general law. The
above-mentioned remedies also ensure that the party entitles the rights that are mentioned under
the contract.
Applicability
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As per the given scenario, Jessica Chan supplied designer handbags and wallets amounting
HK$3 million which needs to be delivered within 30 days. On another hand, Annie not makes
the payment even after the expiry of the time period. With the above-mentioned rules, Annie
before issuing any writ the parties discharge the contract and sue the defaulting party to claim
damages and compensation. As a result of the contract breach, the Annie can take reasonable
steps so as to reduce the further unnecessarily breach and Annie can also take the necessary steps
to minimize the loss.
Conclusion
With the abovementioned discussions, the Jessica has the right to compel the party in default to
perform the contractual obligations request the court to grant rectification, injunction or specific
performance. In case if Annie is living in Singapore, then the Jessica is liable to recovers the
compensatory amount from her representative or with any other person on her behalf. If the
Jessica does not receive the compensatory amount within the specified time according to the
above provision that the Jessica has the right to get compensation by issuing the writ of summons
to claim damages and recover the goods due to the breach of the contract.
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Problem 2
Issue
What is the civil procedure needs to be taken against the order 14 under RHC/RDC and explains
the steps that are taken if the Macy Lau given no response to the writs?
Rule
In case of breach of contract, the law provides the right to the innocent party to claim
compensation and initiate the legal proceedings against the defaulting party. In such case, the
plaintiff can claim summary judgment in opposition to the defendant and the defendant has no
right to claim against the plaintiff. The defendant has no right to pleaded and is not supported
with the reasonable grounds, arguably points and concrete evidence (Reyes and Gu, 2018). The
procedure of the summary judgment makes the plaintiff get a full trial without any delay and
expense of the proceedings. In this, the judgment passed by the courts without hearing the
evidence of the parties and to witnesses of the parties during the trial. An application made buy
the plaintiff should not be entertained in case of serious and important factual disputes. To defeat
the judgment of summery the defendants need to show that the defendant posses arguable
defense.
The civil procedures that require to be taken by the plaintiff against Order 14 are mentioned
below:
Rule 1. The application serves by the plaintiff for the judgment of summary
In this, the defendant defends the action by serving notice and the plaintiff state that the
defendant has no defense to declare including Writ or part of the damages except any damages
that are claim is applied for the judgment to the court. This rule is not applying to the plaintiff
claim agents the libel, seduction, false imprisonment or malicious prosecution. This order not
applies against the Order no 86 and 88.
Rule 2. The manner of making an application under Rule 1
An application along with the affidavits made under the Rule 1 that depicts the belief of the
deponents except for the number of damages claimed and an affidavit must contain information
statement or belief-related with the sources or the grounds.
Rule 3. Judgment for the Plaintiff
After hearing on the application under Rule 1, the court dismisses the application against the
defendant satisfies the claim or part of it to the plaintiff and provide remedy or relief to the
plaintiff (Yeung and Yeung, 2018).
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Rule 4. Leave to defend
On hearing the application by the court, where the defendant is a manager, director, secretary or
any other person acting in this capacity-
a) produce the necessary documents
b) In special circumstances mark the attendance and examining on oath
Rule 5. Applications for the counterclaim judgment
The defendant action commences with the writ that served on the plaintiff claim where the
plaintiff has no right to claim against the counterclaim.
Rule 6. Directions
Defendant has the right to the defendant through the counterclaim or the part of the claim and in
this context court further directs the parties for further action with necessary modifications.
Rule 7. Costs
Court possesses the powers to dismiss the application made under Rule 5.
Rule 8. Right to proceed with the counterclaim
As per Rule 1, the judgment obtains by a plaintiff against the defendant to proceed against the
action of the defendant claim or its part and the defendant obtains a judgment against the plaintiff
to proceed for the counterclaim or any part of it (Cantoni, et. al., 2018).
Rule 9. The judgment of the court against the delivery of a chattel
If any claim made under Rule 1 or 5 so as to deliver the specific chattel and the judgment gives
the order to deliver the chattel if the court judgment comes after trial.
Rule 10. Relief against the forfeiture
Under this rule, the court provides relief to tenant against the forfeiture of the property.
Rule 11. Setting aside of the court judgment
While hearing the party, if any judgment passed by the court under Rule 1 or 5 that may be set
aside by the court.
Applicability
As per the given scenario, the Gonga li, sold the cosmetics products worth HK$2 million to
Macy Lau living in Hong Kong. Despite continuous request Macy does not pay the required
amount. In this case, the civil procedure that she has to follow to claim the amount of
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compensation as per the judgment passed in RHC/RDC Order 14. The plaintiff serves the
application to the court to get remedy against the defendants and claim for damages against
fraud, tort or against any personal injuries which arise due to the personal injury that involves
disputes between the parties (Rescue, 2018). Maximum civil actions are commencing with the
writ of summons. With the abovementioned rules, before any hearing, any application of the
court required to produce documents and in special circumstances examining on oath. While
issuing the summon, it is important that by the Gonga Li by endorsing the claim by mentioning
the relief and remedy that is claim by the plaintiff and claim statement is filed within 14 days.
The applicability of procedure is mentioned below:
Figure- Procedure for Writ of Summons
Source- By Author, 2019
After filing the writ by the Gonga li, if Macy Lau does not appear in the court after issuing the
continuous summons by the court that the court set aside the dispute and announce the ex-party
decision that is the decision in the favor of the Gonga Li.
Conclusion
With the above’ mentioned discussions and the judgment passed in the RHC/RDC Order 14, the
Gonga Li, access the justice by following the appropriate procedures of the court. If the Macy
Lau is not present in the court after issuing continuo’s summons than the court has the power to
set aside the application or give an ex-party decision that is the decision the favor of the Gonga
Li.
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A writ of
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Tri al

Conclusions
As per the above discussions, the legal provisions assist the learners to have the opportunity to
resolve the issues of client with the applicable provisions as per the Hong Kong Law and so that
the clients access the justice in the courts.
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References
 ALEXANDER, N., 2018. Hong Kong: Mediation and the future of dispute resolution.
 Birt, J., Wells, P., Kavanagh, M., Robb, A. and Bir, P., 2018. ICT SKILLS
DEVELOPMENT: DEVELOPING COUNTRIES1.
 Burns, E., Chester, J., Cook, A., Donovan, W., Fischer, G., Frankmar, P., Hayes, D.,
Hutchinson, T., Paolo, T., Prescott, M. and Ramsden, M.S., 2018. INTERNATIONAL
ISSUES.
 Cantoni, D., Yang, D.Y., Yuchtman, N. and Zhang, Y.J., 2018. Protests as Strategic
Games: Experimental Evidence from Hong Kong’s Anti-Authoritarian Movement.
 Dief, M.I.A., Almedalah, K.Y. and Elwan, A.S., 2016. Practical Guide for termination of
construction projects: Hands on application in FIDIC and NEC3 Contracts.
 Rescue, C., 2018. International Corporate Rescue.
 Reyes, A. and Gu, W. eds., 2018. The Developing World of Arbitration: A Comparative
Study of Arbitration Reform in the Asia Pacific. Bloomsbury Publishing.
 Works, H.I. and Hasn’t, W.T.R., 2018. PROFESSIONAL BOOKS. cell, 847, pp.807-
9599.
 Xie, Y. and Lee, H., 2018. Tunneling and Value Relevance of Financial Reports:
Evidence from Hong Kong. Review of Economics & Finance, 11, pp.67-82.
 Yeung, J. and Yeung, F., 2018. Gall. International Arbitration.
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