Subject: Commercial Law

Question 1 Great Hypermarket Bhd. (hereinafter referred to as GH ), is a renowned hypermarket having its branches in major towns in Malaysia. In early 2022, the demand for halal fresh chicken was on the rise as it is the cheapest source of meat protein. Many GH's customers were unhappy because the supply of halal fresh chicken was insufficient at most of GH's branches. GH's existing halal fresh chicken supplier could not with the demand. Thus, GH had to resort to source from other suppliers. In March 2022, GH advertised in its website that it was looking for suppliers of halal fresh halal chicken. GH invited potential suppliers to submit their proposal by 31st March 2022. MyChicken, is the largest halal poultry producer in Malaysia, submitted its proposal to GH. MyChicken highlighted that MyChicken farm is awarded and certified with the Malaysian Good Agricultural Practices (MyGAP) by the Ministry of Agriculture and Food Security. GH was impressed with MyChicken's proposal. GH carried out a site visit to MyChicken farm situated in Semenyih, Selangor. GH was very impressed with MyChicken poultry farming operations that emphasised on hygiene and biosecurity best practices in farm management. The slaughtering of the chickens is certified by halal certification JAKIM (Jabatan Kemajuan Islam Malaysia). GH was satisfied with MyChicken's halal certification as it always believes on the importance to build the customers' trust and confidence in the quality and safety of the products sold at its hypermarkets. MyChicken had secured a RM240 million contract from GH to supply halal fresh chicken for a period of 2 years with effect from 1st May 2022. The terms of the agreement between GH and MyChicken, inter alia, MyChicken shall supply halal fresh chicken worth RM10 million per month to GH based on 2-months' credit. In May 2023, MyChicken's farm was severely affected by the bird flu outbreak in Selangor which resulted in the culling of tens of thousands of chickens to curb the spread of the deadly virus. GH refused to accept chickens from MyChicken, and sued MyChicken for breach of contract. Advise GH and MyChicken as to their rights and liabilities under the law of contract. TOTAL 25 MARKS