Mestum is a local manufacturer that produces dry food. One day, the plant suffered a breakdown in one of the production line. Kamarul, an engineer in the company, was called upon by his superior to inspect the situation and to take appropriate action. After the inspection, Kamarul concluded that the broke down of the production was due to a failure in the water pump system.

After troubleshooting the root cause, Kamarul contacted the water pump manufacturer, Worldwide Pump Berhad to inform them of the fault he discovered. He asked them if they could repair the water pump and if so, the price and the duration of the repair. Worldwide Pump Berhad in reply told Kamarul that they could do it for the price of RM2500 which includes the cost to collect and return the water pump to Mestum within ten days from the date of collection of the water pump. Within his authority, Kamarul immediately agreed to the terms of Worldwide Pump Berhad.

Mestum, at the time their production line broke down due to the faulty water pump, has a contract with an another company based in Singapore, to supply them 300 000 packs of dry food. The contract could have resulted in Mestum making a profit of RM 40,000 if delivered on time. But unfortunately, this was not disclosed to Worldwide Pump Berhad when Kamarul entered into contract with them to repair the water pump.

Worldwide Pump Berhad thereafter arranged with Mr. Kenneth, the owner of the transporter company, to pick up the water pump from Mestum. Worldwide Pump Berhad managed to repair the water pump within five days from the date of collection. Worldwide Pump Berhad immediately arranged for Kenneth to collect the water pump to return it to Mestum. Unfortunately, while on the way to return the water pump, Kenneth met with an accident. The lorry including the water pump were totally damaged.

As a consultant, you were approached by Mestum to give advice on the action they can take for all their losses including the party that they can take action against, if they were to take court action to claim for their losses. Your advice must be supported by the relevant law and case law.

Question 1: Is there a breach of contract and what is the example of cases that shows the breach of contract?