An oral contract may exist but must have clear evidence; in this case, the existence of a valid contract for 5,000 units was not substantiated.

JUDGMENT

Azizah Nawawi JCA:

Introduction

[1] This is an appeal against the decision of the High Court in Shah Alam, Selangor dated 29 October 2018 which had allowed the plaintiff's claim for damages premised on a breach of contract.

[2] After a full trial, the High Court found that there was a valid and binding contract between the parties and ordered, inter alia, that the defendant is to pay the plaintiff:

(i) RM9,800,000.00 being the damages suffered by the plaintiff due to the defendant's failure to purchase the remaining 4,000 units of terminal; and

(ii) RM6,892,968.00 being the damages suffered by the plaintiff due to the defendant's failure to continue with the maintenance of 5,000 units of terminal for the following four years.

[3] Having considered the appeal records and the submissions of the parties, this Court has allowed the appeal with costs. Our decision was unanimous and these are our grounds for allowing the appeal and for ease of reference, parties will be referred to as they were in the High Court.

The Salient Facts

[4] The plaintiff is a company which is involved in the business of developing and servicing banking and retail technology.

[5] The defendant is a company in the business of selling computers and network integration systems.

[6] The defendant had approached the plaintiff to assist them in providing Agent Banking System for Bank Simpanan National Berhad ("BSN") with a new banking system created by the plaintiff known as the Alexis System.

[7] After several discussions and presentations, BSN has indicated its intention to purchase the Point of Sale Terminal ("POST") from the defendant, bundled with the maintenance service for the said terminals.

[8] Vide a letter of offer/appointment dated 15 September 2015, BSN had appointed the defendant to supply 1,000 units of POST for the BSN Agent Banking ("BSN project") for a contract sum of RM6,480,000.00. Para 1.1 of Lampiran 1 to the letter of offer/appointment reads as follows:

"1.1 Tuan dikehendaki membekalkan CADANGAN PEROLEHAN 1,000 UNIT TERMINAL POS (POINT OF SALE) BAGI TAHUN 2015 UNTUK BANK SIMPANAN NASIONAL, (pembekalan) untuk kegunaan BSN (pembekalan). Peralatan yang dibekalkan mestilah mengikut skop dan spesifikasi yang telah ditetapkan oleh pihak Bank."

[9] It is common ground that BSN had entered into an agreement with the defendant and the plaintiff was not privy to the agreement entered between BSN and the defendant.

[10] The plaintiff then issued the quotation dated 17 September 2015, which was amended on 5 October 2015 for a sum of RM3,452,420.00 to the defendant.

[11] Having obtained the contract from BSN, the defendant issued a purchase order dated 22 September 2015 to purchase 986 units of GXDC3 Bio (basic model) and 14 units of GXDC3 Bio (total of 1,000 units) with barcode scanner from the plaintiff.

[12] The plaintiff terminated the agreement with the defendant on 20 April 2017 when the defendant did not issue another purchase order for the BSN project.

[13] The plaintiff then filed this suit for a breach of agreement by the defendant and for the return of the goods owned by the plaintiff. The plaintiff takes the position that the parties have a valid contract for five years for the purchase of 1,000 units of POST per year, with a total number of 5,000 units of POST.

[14] The main defence of the defendant is that there is no agreement to purchase 5,000 units of POST, and the agreement is only to purchase 1,000 units of POST with free maintenance from the first year and maintenance fee for the second year onwards.

Decision Of The High Court

[15] The High Court decided that there was a valid and binding contract between the parties to purchase 5,000 units of POST over a period of five years and ordered the defendant to pay the plaintiff damages in the sum RM9,800,000.00 for failing to purchase the balance 4,000 units of POST and RM6,892,968.00 as damages for the maintenance of the 5,000 units of POST for the balance of four years. Hence, the defendant filed th