1. CASE ANALYSIS: SHENZHEN A CO. V. HONG KONG B CO.

2. Facts: Shenzhen A (The Buyer)  HK$ 43,000  7days after receiving the cars 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

3. A claimed: B did not perform the contract on Sep. 24, and its nonperformance breached the contract. 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.

4. 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?)

5. 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.

6.  In this case 1.B: proposal 2.A: no response 3.No agreement to modify the contract 4.The original contract was still binding. 5.B should delivered goods to A. however B failed to do it. 6.B breached the contract and should be liable.

7. Decision: The court ruled that B was liable for breach of contract and should compensate HK$ 1,000 to A as damages.

8. comment