Lexis – Words, Phrases & Maxims
Contract: Dependent or contingent. In contract law, a particular obligation of one party may
be conditional on some event occurring, in which case the party will not be obliged to
perform unless that event occurs. Where the contract itself is said to be subject to some event
or condition, there may be no binding contract unless and until that event occurs or condition
fulfilled. Where an agreement is stated to be subject to a contract, the purported contract may
be void for uncertainty, depending on whether the parties intended that the agreement be
binding immediately and merely that the terms should be stated in a more precise form; or
that performance of the contract is conditional upon the execution of a formal documents or
that the parties are not bound at all unless and until a formal contract is executed: Masters v
Cameron (1954) 91 CLR 353 at 360 . A contract which is subject to finance or conditional
upon finance being available is not thereby rendered uncertain: Meehan v Jones (1982) 149
CLR 571 ; 42 ALR 463
The following general principles are warranted by authority and manifestly reasonable:— (i)
where a conditional contract of sale fixes a date for the completion of the sale, then the
condition must be fulfilled by that date: (ii) where a conditional contract of sale fixes no
date for completion of the sale, then the condition must be fulfilled within a reasonable time;
(iii) where a conditional contract of sale fixes (whether specifically or by reference to the
date fixed for completion) the date by which the condition is to be fulfilled, then the date so
fixed must be strictly adhered to, and the time allowed is not to be extended by reference to
equitable principles.
Smith v Butler [1900] 1 QB 694 and Re Sandwell Park Colliery Co [1929] 1 Ch 277 applied.
See: Aberfoyle Plantations Ltd v Khaw Bian Cheng [1960] MLJ 47
See National Land Finance Co-operative Society Ltd v Sharidal Sdn Bhd [1983] 2 MLJ
211 ; Ong Boon Pok Realty Co (Pte) Ltd v Chiang Hong (Pte) Ltd [1982] 1 MLJ 242 ; Lee
Yew Hin v Kow Lup Piow [1974] 1 MLJ 114 .
Author
It is the defendants’ contention that the said agreement was not a specifically enforceable
contract because it was a conditional contract by virtue of cl 6 (supra) and that, from what
transpired, the condition had not been fulfilled. Hence the contract remained conditional and
never became specifically enforceable. It is obvious on the face of the said agreement that the
condition as to obtaining extension of the written permission was for the exclusive benefit of
the plaintiffs. As such they might waive this condition. 1 Chitty on Contracts, General
Principles (26th Ed) para 1611 states:
Where the terms of a contract include a provision which has been inserted solely for the
benefit of one party, he may, without the assent of the other party, waive compliance with
that provision and enforce the contract as if the provision had been omitted.
Chip Thye Enterprises Pte Ltd v Development Bank of Singapore Ltd [1994] 1 SLR 164 at
172 Per Goh Soon Jeng J
Eng Song Aluminium Industries Sdn Bhd v Keat Siong Property Sdn Bhd [2018] 5 MLJ
380
[33] Based on those authorities, we were satisfied that a condition precedent in a contract
such as in this instant case, is not an impediment for an order of specific performance to be
granted. It was merely a conditional contract which will no longer be conditional if the
conditions precedent have been fulfilled. The respondent herein was just seeking the
appellant to comply and continue with the agreements and to apply for the state authority’s
approval. In the event the state authority refuses to give its approval, the contract shall surely
come to an end.
Eng Song was followed in Hiap Soon Hong Sdn Bhd v Leopad Assets Sdn Bhd [2021] 7 MLJ
797
[45] Based on all of the above, I find that on the balance of probabilities, the plaintiff has
successfully shown that all of the conditions precedent under cl 2.1 of the said contract has
been fulfilled. Therefore, I am of the considered view that the said contract was no longer
a conditional contract and had come into full force.
Multi-Purpose Holdings Bhd v Ketua Pengarah Hasil Dalam Negeri [2006] 2 MLJ 498
[76] From the above authorities it may thus be said that a conditional contract is not
enforceable until the condition precedent has been fulfilled. This is provided in s 33 of the
Contracts Act which reads:
33. Enforcement of contracts contingent on an event happening.
 (a)Contingent contracts to do or not to do anything if an uncertain future event
happens cannot be enforced by law unless and until that event has happened.
 (b)If the event becomes impossible, such contracts become void.
Articles: CONDITIONAL CONTRACT IS NOT ENFORCEABLE UNTIL THE CONDITION
PRECEDENT HAS BEEN FULFILLED
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- Section 33(a) of the Contracts Act: Contingent contracts to do or not to do anything if
an uncertain future event happens cannot be enforced by law unless and until that
event has happened.
- Section 33(b) of the Contracts Act: If the event becomes impossible, such contracts
become void.