chapter 8 & 9 - breach of contract & its remedies
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8/21/2019 Chapter 8 & 9 - Breach of Contract & Its Remedies
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GLUP1034/CONTRACT LAW II
PART 8 & 9 - BREACH OFCONTRACT & REMEDIES FOR
BREACH OF CONTRACT
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CONTENT:
A. BREACH OF CONTRACTS
Examples of brea! of o"#ra#s
Effe#s of brea! of o"#ra#s
Rel$ef %"&er se#$o"s 40 a"& '()
Co"#ra#s A#1*(0
Effe#s %"&er E"+l$s! la,
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-rea! of Co"#ra#
Breach of contract !appe"s ,!ere #!ere
$s a" a#%al fa$l%re b. a par#. #o #!e
o"#ra# #o perform !$s obl$+a#$o"s %"&er
#!e o"#ra# or a" $"&$a#$o" of !$s
$"#e"#$o" "o# #o &o so Oxfor& $#$o"ar. of La,) 4#! E&$#$o"2
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orms of -rea! a"& $#s effe#s
Breach of Condition brea! of a"$mpor#a"# #erm2 #!e la, perm$#s #!ePla$"#$ff #o #rea# !$mself as be$"+discharged $e rep%&$a#e #!e o"#ra#2from f%r#!er obl$+a#$o"s a"& la$mdamages
Breach of warranty brea! of a less
$mpor#a"# #erm2 #!e $""oe"# par#. !ereMAY NOT #rea# !$mself as be$"+discharged from !$s obl$+a#$o"s %"&er #!eo"#ra# $e ma. "o# rep%&$a#e #!e
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5o"#
5o"#ra#2 al#!o%+! !e ma. s%e a"&reo6er damages for "o"7performa"e of#!e s%bs$&$ar. #erm
Ching Yik Development Sdn Bhd vSetapak Heights Development Sdn Bhd81**'9 3 L; '
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=#a#%#or. pro6$s$o" of brea!
Section 40 of the Maa!sian ContractsAct "#$0 pro6$&es #!a# ,!e" a par#. #o a
o"#ra# !as ref%se& #o perform) &$sable&
!$mself from perform$"+) #!e prom$seema. p%# a" e"& #o #!e o"#ra# or #o
o"#$"%e ,$#! #!e o"#ra#
=ee Illustrations (a) (!) of s40 CA
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5o"#
Section %$ of the Maa!sian Contracts
Act "#$0 pro6$&es for o"se>%e"es of
res$ss$o" of 6o$&able o"#ra#.
Please refer
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Co"#e"#:7
B. REME&'ES FOR BREACH OF
CONTRACTS
ef$"$#$o"
T.pes of reme&$es a6a$lable&amages
()ant)m Mer)it
Reme&$es %"&er =pe$f$ Rel$ef A#s 1*(0=pe$f$ Performa"e
I"?%"#$o"s
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Reme&$es a6a$lable $" e6e"# of
-rea!
ama+es
Compe"sa#or. &ama+es
Nom$"al &ama+esP%"$#$6e &ama+es
Quantum Meruit
=pe$f$ performa"e
I"?%"#$o"
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ef$"$#$o"
A ega remed! 7 $s #!e mea"s ,$#! ,!$!
a CT of la,) e"fores a right* $mposes a
+enat!) or ma@es some o#!er CT order
#o $mpose $#s ,$ll
T!ere are se6eral reme&$es for brea! of
o"#ra#) s%! as damages, specific
performance, injunction, quantum meruita"& e#
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ama+es
T!e p%rpose of a,ar&$"+ &ama+es $s #o
ompe"sa#e #!e Pla$"#$ff for #!e loss
s%ffere& &%e #o #!e efe"&a"#s brea! of
o"#ra#
ama+es $s #!a# s)m of mone! ,!$! ,$ll
p%# #!e par#. ,!o !as bee" $"?%re& or ,!o
!as s%ffere&) $" #!e same pos$#$o" as $f #!eo"#ra# !a& bee" properl. performe&
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T.pes of ama+es
Compe"sa#or. ama+es
Nom$"al ama+es
P%"$#$6e &ama+es
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Compe"sa#or. ama+esABA
Or&$"ar. / Ge"eral ama+es2
Com+ensator! &amages o6er #!e
oss #!e "o"7brea!$"+ par#. $"%rre& as
res%l# of #!e brea! of o"#ra#
T!e amo%"# a,ar&e& $s $"#e"&e& #o ma@e
+oo& or replae #!e loss a%se& b. #!e
brea!
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5o"#
Compe"sa#or. &ama+es a" be &$6$&e&
$"#o:7‘General damages’ o6er #!e loss direct! ,
necessari! $"%rre& b. #!e brea!
‘Special damages’ o6er a". loss $"%rre& b.
#!e brea! of o"#ra# bea%se of s+ecia
circ)mstances - conditions #!a# are "o#or&$"ar$l. pre&$#able
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Nom$"al ama+es
ef$"$#$o" of "om$"al &ama+es aor&$"+
#o C!$##. o" Co"#ra#s:7
DW!e"e6er a par#. $s l$able for brea! of
o"#ra#) e$#!er express or $mpl$e&) #!e
Pla$"#$ff $s +e"erall. e"#$#le& #o "om$"al
&ama+es al#!o%+! "o a#%al &ama+e $s
pro6e& #!e 6$ola#$o" of a r$+!# a# ommo"la, ,$ll %s%all. e"#$#le #!e pla$"#$ff #o
"om$"al &ama+es ,$#!o%# proof of spe$al
&ama+eF
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CONT
Nomina damages $e a 6er. small s%m
of &ama+es
Nom$"al &ama+es are a,ar&e& ,!e")
e+ a pla$"#$ff ,!o !as s%e& for brea! of
o"#ra# !as s%ffere& "o loss
Nom$"al &ama+es are a,ar&e& merel. #o
a@"o,le&+e #!a# !$s r$+!#s !a6e bee"
brea!e&
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Nom$"al ama+es
I" 'nd)stria , Agric)t)ra &istri/)tion SdnBhd 1oden Sands Constr)ction Sdn Bhd
2"##3 3 M56 433) #!e Co%r# f%r#!er $ll%s#ra#e&
#!e $mpor#a"e of pro6$"+ &ama+es a"& s#a#e&
#!a# :“damages are not meant to !e punitive in
nature but rather compensatory …It is therefore
important for the plaintiff to establish his loss and
not, so much as hat the defendant had gained
from the breachF
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P%"$#$6e or Exemplar. ama+es
7)nitie &amages are a,ar&e& #o p%"$s! or
ma@e a" example of a ,ro"+&oer ,!o !as a#e&
,$llf%ll.) mal$$o%sl. or fra%&%le"#l.
U"l$@e ompe"sa#or. &ama+es #!a# are $"#e"&e&#o o6er a#%al loss) p%"$#$6e &ama+es are
$"#e"&e& #o p%"$s! #!e ,ro"+&oer P%"$#$6e
&ama+es are rarel. a,ar&e& for brea! of
o"#ra# T!e. ar$se more of#e" $" tort cases
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Pr$"$ples of la$m$"+ &ama+es 7
Ca%sa#$o"1 I" or&er #o reo6er &ama+es) #!e
Pla$"#$ff m%s# s!o, #!a# !$s osses 8ere
ca)sed /! the &efendant9s /reach.
s!o, causation2
e !as #o pro6e #!a# #!e oss 8as d)e to
the act or defa)t of the &efendant a"&
#!ere $s "o brea@ $" #!e !a$" of a%sa#$o"be#,ee" #!e efe"&a"#s brea! a"& #!e
Pla$"#$ffs losses
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Pr$"$ples of la$m$"+ &ama+es 7
Remo#e"ess of ama+esH Apar# from a%sa#$o") #!e Pla$"#$ff m%s# also
s!o, #!a# #!e osses he has s)ffered are not
remote in order to recoer them
Losses) #o be reo6erable) m%s# be ,$#!$" #!ereasona/e contem+ation !i"e reasonable
foreseeable# of #!e par#$es
I" E"+l$s! la,) #!e test of remoteness of
&ama+es ,as la$& &o," $" Hadley v Ba"endale
:";$4< # E= 34"
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a&le. 6 -axe"&ale 1(42 * Ex
341 A s!af# $" #!e pla$"#$ffs m$ll bro@e &o," a"& #!e pla$"#$ffs
!$re& #!e &efe"&a"# #o #ra"spor# #!e s!af# for repa$rs
T!e efe"&a"# &ela.e& $" re#%r"$"+ #!e s!af# a"& #!eefe"&a"# &$& "o# @"o, #!a# #!e pla$"#$ffs &$& "o# !a6e a
spare s!af#T!e Pla$"#$ffs s%e& for oss of +rofits as &ama+es
T!e CT !el&: T!e Pla$"#$ffs a#$o" fa$le& T!a# #!e osses8hich are too remote are not recoera/e
NOTE> T!e a#$o" ,as !ear& o" #!e bas$s #!a# #!e o"l.$"forma#$o" +$6e" #o #!e ef ,as #that the article to !ecarried was the !roken shaft of a mill that the$laintiffs were the millers of that mill%
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a&le. 6 -axe"&ale 1(42 * Ex
341Losses are NOT TOO REMOTE $f #!e. are:7
a2 ordinar! osses ,!$! ar$se "a#%rall. $" #!e%s%al o%rse of #!$"+s or
b2 e=traordinar! osses ,!$! ar$se ,$#!$" #!ereaso"able o"#empla#$o" of #!e par#$es a# #!e#$me #!e. e"#ere& $"#o #!e o"#ra#
ere) #!e loss of prof$#s &$& "o# fall %"&er #!e 1s#
l$mb as "ormall. m$lls ,o%l& !a6e spare s!af#
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a&le. 6 -axe"&ale 1(42 * Ex
341=$"e #!e efe"&a"# did not ?no8 #!a#
#!e Pla$"#$ffs &$& "o# !a6e spare s!af#) #!e
losses &$& "o# fall %"&er H"& l$mb
e"e) #!e losses are "o# reo6erable
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J$#or$a La%"&r. W$"&sor2 L#& 6 Ne,ma"
I"&%s#r$es L#& 81*4*9 H B- (H
T!e Co%r# f%r#!er expla$"e& #!e #es# of Hadley v
Ba"endale $" #!a#:
a2 #!e Pla$"#$ff a" al,a.s reo6er foreseeable
losses or &ama+es ,!$! ar$ses "a#%rall.b2 ,!a# $s reasona!le foresee!ility &epe"&s o"
#!e ?no8edge #!e" possesses b. #!e par#. $"
&efa%l#
2 @"o,le&+e $s actual or imputed knowledge
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5o"#
NOTE> T!e la, ,$ll $mp%#e #o e6er.
$"&$6$&%al) @"o,le&+e of #!e loss #!a# $s
l$able #o res%l# nat)ra! or in the ordinar!
co)rse of things from a brea! of o"#ra#W!e#!er or "o# #!e o"#ra# brea@er a#%all.
!as #!$s @"o,le&+e $s irreeant.
T!a# $s #o sa.) $mp%#e& @"o,le&+e rela#es #o#!e 1s# l$mb of Hadley v Ba"endale
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5o"#
NOTE: I" a&&$#$o" #o #!e $mp%#e& @"o,le&+e)#!e &efa%l#er ma. !a6e ?no8edge of s+ecia
circ)mstances ,!$! are outside ‘the normal
course of things’ K ,!$! ,$ll a&& or e"!a"e #!e&ama+e #!a# ma. be a%se& b. a brea! of
o"#ra# $e a#%al @"o,le&+e2
I# $s act)a ?no8edge of the s+ecia
circ)mstances #!a# a#$6a#es #!e H"& l$mb of
Hadley v Ba"endale
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Remo#e"ess of &ama+es $"
ala.s$aI" ala.s$a) Section @4 Contracts Act
"#$0 se#s o%# #!e o"se>%e"es of a brea!
of o"#ra#:
12 ,!e" a o"#ra# !as bee" bro@e") #!e
par#. ,!o s%ffers b. #!e brea! $s e"#$#le& #o
ree$6e) from #!e par#. ,!o !as bro@e" #!e
o"#ra#) com+ensation for an! oss ordamage a%se& #o !$m #!ereb.) ,!$!
"a#%rall. arose $" #!e %s%al o%rse of #!$"+s
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Remo#e"ess of &ama+es $"
ala.s$afrom #!e brea!) or ,!$! #!e par#$es
@"e,) ,!e" #!e. ma&e #!e o"#ra#) #o be
l$@el. #o res%l# from #!e brea! of $#
H2 =%! ompe"sa#$o" $s "o# #o be +$6e"
for a". remote and indirect loss or
&ama+e s%s#a$"e& b. reaso" of #!e
brea!
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Remo#e"ess of &ama+es $"
ala.s$aSection @4 of the Contracts Act "#$0
pro6$&es for #!e #es# for remo#e"ess of
&ama+es ,!$! $s s$m$lar #o #!e #es# $"
Hadley v Ba"endale : I" Dato &ohd 'nuar !in m!ong 'nor v Bank
Bumiputra (m) Sdn Bhd *++,- * &./
012 ta 0345031) =$#$ Norma aa@ob ;CAsa$& #!a# s
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5o"#
T!erefore) o"e $# $s s!o," #!a# #!e losses
o%l& fall %"&er #!e 1s# or H"& l$mb) #!e
efe"&a"# $s l$able #o #!e f%ll ex#e"# of $# so
lo"+ as #!e ex#e"# of &ama+es !as bee"s!o," o" #!e /aance of +ro/a/iities.
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$#$+a#$o" of ama+es
T!e &%#. #o m$#$+a#e $e m$"$m$se #!elosses2 o"l. omes abo%# ,!e" #!ere $s abrea! of o"#ra#
T!e e=+anation $" Section @4 CA "#$0 pro6$&es #!a#: DI" es#$ma#$"+ #!e loss or&ama+e ar$s$"+ from a brea! of o"#ra#)#!e mea"s #a@e" #o reme&. #!e$"o"6e"$e"e a%se& b. #!e "o"7performa"e of #!e o"#ra# m%s# be #a@e"$"#o ao%"#F
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Pr$"$ples of m$#$+a#$"+
T!e Pla$"#$ff m%s# #a@e reaso"able s#eps #om$#$+a#e !$s loss a"& m%s# "o# $"%r%"reaso"able expe"ses
W!a# #!$s mea"s $s #!a# #!e pla$"#$ff a""o#
reo6er a". par# of #!e &ama+es #!a# !eo%l& !a6e a6o$&e& b. #a@$"+ all reaso"ables#eps poss$ble $" #!e $r%ms#a"es
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T$m$"+ of Assessme"# of ama+es
As a +e"eral r%le) &ama+es s!o%l& beassesse& as a# #!e &a#e of brea!
I" ala.s$a) #!e Co%r# $" E?o/ina :M< Sdn
Bhd Mensa Mercantie :Far East< 7te5td 2"##4 " M56 $$3 !el& #!a#:
A2 #!e "ormal meas%re for &ama+es $s #!e
&$ffere"e be#,ee" #!e mar@e# pr$e of #!e+oo&s or proper#. as a# #!e &a#e of brea!a"& #!e o"#ra# pr$e
-2 $" appropr$a#e ases) losses a" be
assesse& as a# #!e &a#e of #r$al
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M%a"#%m er%$#
Quantum Meruit : ,!ere a pla$"#$ff s%es
for a" %"spe$f$e& amo%"# for ser6$es
re"&ere& la$m for reaso"able
rem%"era#$o"2
Quantum Meruit mea"s Das m%! as !e
a" ear"e&F
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Quantum Meruit ,!ere a6a$lable
T!e $r%ms#a"es $" ,!$! a quantum
meruit ma. be la$me& are as follo,s:
1 ,!e" #!ere $s a" express /$mpl$e&
a+reeme"# #o pro6$&e a ser6$e b%# "o
a+reeme"# as #o pr$e
Case: 'yer Hitam 7in Dredging
&alaysia Bhd v YC Chin nterprises
Sdn Bhd 81**49 H L;
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5o"#
H ,!ere #!e par#$es !a6e "o# performe&
#!e #erms of #!e$r o"#ra# b%# a "e,
o"#ra# a" be $"ferre& from #!e$r o"&%#
#o !a6e replae& #!e or$+$"al) a quantummeruit a,ar& ma. be a6a$lable for #!e
6al%e of #!e ,or@ &o"e %"&er #!e "e,
$mpl$e& o"#ra#Case: Smith Construction Co .td v $hit
8irivatna (f) 81*((9 L; ) C
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5o"#
3 ,!ere a o"#ra# $s #erm$"a#e& b.
brea! af#er o"e par#. !as performe& !$s
obl$+a#$o"s) #!e par#. "o# $" &efa%l# ma.
ele# #o aep# #!e brea! K s%e o"quantum meruit for #!e 6al%e of ,or@
&o"e
Case: De Bernady v Harding 1(32 Ex HH 11 ER 1('
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5o"#
4 A quantum meruit $s also a6a$lable #o a
a pr#. ,!o $s pre6e"#e& from omple#$"+
!$s obl$+a#$o"s b. #!e o#!er par#.
Case: Ban Hong /oo &ines .td v Chen
Yap 81*'*9 H L; 3) C
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Reme&$es %"&er =pe$f$ Rel$ef A#s 1*(0
=pe$f$ Performa"e K I"?%"#$o" are forms of
,!a# $s #erme& as spe$f$ rel$ef
=pe$f$ rel$ef $s embo&$e& $" a s#a#%#e =pe$f$
Rel$ef A# 1*(0 K s4 of #!e A# pro6$&es:=pe$f$ rel$ef $s +$6e"
a2 b. #a@$"+ possess$o" of er#a$" proper#. K
&el$6er$"+ $# #o a la$ma"#
b2 b. or&er$"+ a par#. #o &o #!e 6er. a# ,!$! !e
$s %"&er a" obl$+a#$o" #o &o
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5o"#
2 b. pre6e"#$"+ a par#. from &o$"+ #!a#
,!$! !e $s %"&er a" obl$+a#$o" "o# #o &o
&2 b. &e#erm$"$"+ K &elar$"+ #!e r$+!#s of
par#$es o#!er,$se #!a" b. a" a,ar& ofompe"sa#$o" or
e2 b. appo$"#$"+ a ree$6er
S.4:/
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=pe$f$ Performa"e
S7 $s a" &eree/or&er of CT re>%$r$"+ a
par#. #o perform $" #erms #!e 6er.
obl$+a#$o"s !e %"&er#oo@ #o &$s!ar+e o"
e"#er$"+ $"#o #!e o"#ra#
T!e p%rpose $s #o p%# #!e par#$es $" #!e
pos$#$o") $" ,!$! #!e &%e performa"e of
#!e$r obl$+a#$o"s ,o%l& !a6e plae& #!em
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=pe$f$ Performa"e ,!ere
a6a$lable
As a" e>%$#able reme&.) =P $s a6a$lable
o"l. ,!e" #!e ommo" la, or a s#a#%#e
&oes "o# pro6$&e a" a&e>%a#e reme&.
Ge"erall.) =pe$f$ performa"e $s
a6a$lable $" #!e follo,$"+ $r%ms#a"es:7
a2 ,!ere #!e o"#ra# brea!e& $s for #!e
sale K p%r!ase of la"&
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5o"#
b2 $f #!e s%b?e# ma##er of #!e o"#ra# $s rare
or %"$>%e2 #!e reaso"$"+ $s #!a# &ama+es
are "o# a" a&e>%a#e reme&. bea%se #!e.
,$ll "o# plae #!e $""oe"# par#. $" pos$#$o"!e ,o%l& !a6e bee" $" b%# for #!e brea!
2 exep#$o"al $r%ms#a"es ,!ere
&ama+es ,o%l& "o# be a&e>%a#e reme&. 9Beswick v Beswick 81*'9 AC (
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I"?%"#$o"
'n)nction > are form of ,!a# $s #erm as spe$f$
rel$ef K $# $s embo&$e& $" section 4:c< of the
S+ecific Reief Act "#$0
s.4: =pe$f$ rel$ef $s +$6e" !c# b$ pre%enting a part$ from doing that hich he is under an
obligation not to do
An in)nction $s a" or&er of CT #o pro!$b$#
#!rea#e"e& / o"#$"%$"+ $lle+al o"&%# of er#a$"
@$"&s
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5o"#
I# $s a,ar&e& $" $r%ms#a"es ,!ere
&ama+es ,o%l& "o# be a" a&e>%a#e reme&.
#o ompe"sa#e #!e la$ma"# bea%se #!e
la$ma"# "ee&s #o res#ra$"# #!e &efe"&a"#from s#ar#$"+ or o"#$"%$"+ a brea! of a
"e+a#$6e o"#ra#%al %"&er#a@$"+
(prohi!itory in:unction) or "ee&s #o ompelperforma"e of a pos$#$6e o"#ra#%al
obl$+a#$o" (mandatory in:unction)6
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o"#
T!e o"&$#$o" pree&e"# for #!e +ra"# of a"
$"?%"#$o" are:
a2 #!e pla$"#$ff m%s# !a6e a" $"#eres# #o
pro#e#b2 &ama+es m%s# be s!o," "o# #o be a"
a&e>%a#e reme&.
2 #!ere $s &a"+er #!a# %"less res#ra$"e&) #!e&efe"&a"# ,$ll brea! #!e o"#ra# / o"#$"%e
,$#! #!e brea! ompla$"e& of
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