Illustration

• X contracts to build a house for Y in consideration of a sum of Rm500,000 which is to be paid in two stages as the works progress. ( Formation of contract ) . 
• After X and Y enter into the contract , Y discovers that X is not a building contractor registered with CIDB which X has claimed to be prior to entering into the contract . This is fraud in X . Therefore the contract is voidable at the option of Y . 
• Despite Y knows that X is not a registered building contractor , he asks X to proceed with the building works . (Performance of contract ) .

Situatuin 1

X completes the entire building works satisfactoruly and Y pays X the sum of Rm500,000 . The contract is discharged by performance .

Situation 2
When X has executed half of the works , Y decides to terminate X and ask Contractor Z to continue with the works . Y pays X Rm 250,000 for the work done and X accepts it . The contract is discharged by agreement .

Situation 3
When x has executed part of the work , Y and his family die in a plane crash . The contract is discharged by frustration ( impossiblity of performance ) .

Situation 4.

When x has executed half of the works, Y refuses to pay him the first Rm 250,000. As a result , X ceases work and sues Y fr the breach of contract . The contract is discharged by breach .