CASE ANALYSISSHENZHEN A CO. V. HONG KONGB CO..ppt

CASE ANALYSIS:SHENZHEN A CO. V. HONG KONGB CO. Facts: Shenzhen A (The Buyer) HK$ 43,000 7days after receiving the cars A claimed: B did not perform the contract on Sep. 24, and its nonperformance breached the contract. What is the Legal Issue? Whether B’s non-delivery breached the contract? Whether the contract had been modified effectively? (whether an effective modification to the contract could be made only through the proposal of B?) Reasoning: .legal rules: A contract is formed by agreement of the parties. Thus a contract cannot be modified without agreement of the parties. If either party proposes to modify the contract without obtaining the assent from the other, the modification is not effective. In this case B: proposal A: no response No agreement to modify the contract The original contract was still binding. B should delivered goods to A. however B failed to do it. B breached the contract and should be liable. Decision: The court ruled that B was liable for breach of contract and should compensate HK$ 1,000 to A as damages. comment * * Hong Kong B Contract: a sale of certain cars Sep.14, 1983 Execution HKD depreciated and freight went up. B—A should increase the price of the cars and postpone the delivery date. A– no response While B failed to deliver cars to A, A sued B for breach of contract, asking for damages. (The Seller) Sep. 24, B should supply the cars to A B alleged As to the special circumstances, we had proposed to modify the contract. A gave no response, and so we regarded A tacitly approved our proposal. Thus the contract had been modified.