The issue arise here is whether Dr. Albert have rights to claim the house as promises by Ms. Cade in the court.
Dr. Albert have experience running a clinic that give free medical care to impoverished families. He run his business in a house that owned by Ms. Cade. He pay the rent expenses to Ms. Cade on month-to month basis. At some point he do an offer to Ms. Cade to buy the house. Ms. Cade accepted his offer and want to sold the house at price of !M "#####. Dr. Albert as$ Ms. Cade to give him six months to pay for the house. %n the meantime real estate price rose up and she sell the house to somebody else. &hen the time that promises by both parties comes Dr. 'lbert presented a che(ue with sum of !M "## ### to Ms. Cade. )ut Ms.Cade had already sell the house at price of !M *+####.
This issue can be discussed under Contract Act ,+#. ection "/h0 of Contract Act ,+# define contract as 1 an agreement enforceable by law2. Thus a contract is an agreement which is legally binding between parties. %t also can be simply define as an agreement between " or more parties. %n order to bring the contract in to existance there are seven element that must have in the contract.
3irstly is offer offer offer or proposal is necessary for for the formation of an agreement. ection "/a0 CA ,+# provides that 4 when a person signifies to another his willingness to do or to abstain from doin anything with a view to obtaining the assent of that other to the act or abstinence he is said to ma$e a proposal. A person who ma$es an offer is called an offeror o fferor while a person to whom the offer was made is called offeree. ection of CA provides that if an offer is made in word or writing it is said to express. %f an offer is made by one act or behaviour. %t said to be implied. %n this case we can see clearly that Dr.Albert is an offeree when he as$ Ms. Cade to sell the house. The offer was made to Ms. Cade as she was an offeror.
econd element is acceptance section "/b0 CA provides that 1if a person to whom the offer was made signifies his assent thereto the proposal is said to be accepted2. 5nce an offer is accdepted it will become promise. ection "/c0 CA refers to the person accepting the proposal as the 4promisee4. 3or a proposal to be converted into a promise. The acceptance of that offer must be absolute and un(ualifiedsection section 6 of CA. Acceptance Acceptance must be absolute absolute and un(ualified un(ualified so that there is complete complete consensus. %f the parties still negotiating an agreement is not yet formed. Any modification of the offer does not constitute an acceptance but amounts to a counter offer. A counter offer is treated as a re7ection of the
original offer. Acceptance also must be expressed in some usual and reasonable manner unless the proposal prescribes the manner in which it is to be accepted. %n this issue Ms. Cade is the one who accept the offer. The acceptance was made in writing when she gave Dr. Albert a signed note reading as follows8
In return for all that Dr.Albert has done for our community, I hereby promise that if he delivers RM200, 000 to me at any time between now and November of this year, I will !ive him title to the buildin! that houses his clinic.
9ext intention to create legal relation. Although the Contract Act ,+# is silent on the intention to create legal relations as one of the re(uirements of a valid contract case law clearly dictates necessity for this re(uirement parties involve shall have intention to create legal relation agreement. An agreement does not create a binding contract. :aw re(uires that parties to an agreement intend that it to be legally enforceable. There are two types of agreement business Agreement and 3amily Agreement
The contract which is legally binding between Dr. Albert and Ms. Cade is a business agree ment. As a prove Ms. Cade was giving Dr. Albert a signed note containing the condition of the contract. %n business agreement there is a presumption that parties intend to be legally binding. %n case of :ow ;ar
3ourth is element of consideration ection "> CA state that an agreement without consideration is void. Consideration can be simply defined as the price which one party pays. ?enerally there are three types of consideration executory considerationexecuted consideration and past consideration. %n this issue we can see that the consideration that involved in the contract of Dr. Albert and Ms. Cade is executory consideration where Ms. Cade agree to give the property to Dr. Albert if Dr. Albert willing to pay !M "##### for the house.
3ifth element is certainty the terms of an agreement cannot be vague but must be certain. ection *# CA state that 4an agreement which is uncertain or is not capable of being made certain is void.4 At common law there is two aspects of uncertainty. :anguage used is too vague and failure to reach an agreement on a vital term of the contract. %n the case of ;aruppan Chetty v uah Thian the held said that the contract is as parties have agreed to a lease of !M*+ per month for as long as he li$es. The contract is void because of the words be used in the agreement. %n the issue of Dr.Albert and Ms. Cade we can see the overall laguage that used in the signed note is clear and the agreement can be reach on a vital term of the contract.
Capacity also one of the important element of contract. The parties entering into a contract should also competent to contract they must have legal capacity to do so. ection ,, of CA state that capacity refers to the ability of the parties to a contract to fully understand its terms and obligations. %n Malaysia the age of ma7ority is ,@ years /Age of Ma7ority Act ,6,0. %n case of Mohari )ibee v Dhurmodas ?hose. The appellant lent the respondent the sum of !s"####. Appellant $new that the respondent is a minor. :ater respondent brought an action for a declaration. The held said that the contract that entered into by parties is not competent. The contract is void. )ut law provides exception to the rule that minor can enter into a contract by Age of Ma7ority Act ,6,. 3irst is Contract of 9ecessaries second is Contract of cholarship third is Contract of %nsurance and last is Contract of Marriage.
The last element of contract is free consent all agreements are contracts if they are made by free consent of parties. ection ,# of CA ,+# provides inter alia that all agreements are contracts if they are made by the free consent of parties. ection ,* CA state that two or more persons are said to consent when they agreed upon the same thing in the same sense. 3urthermore ection ,B CA state that consent is said to be free when it is not caused by coercion undue influence fraud misrepresentation mista$e. ection ,/,0 of the said act provides that when consent to an agreement is caused by coercion fraud or misrepresentation the agreement is a contract voidable at the option of the party whose consent was so caused. ection ,/"0 goes on to say that a party to a contract whose consent was caused by fraud or misrepresentation may if he thin$s fit insist that the contract shall be performed and that he shall be put in the position in which he would have been if the representation made had been true.
As illustration of this legal principle section ", of CA provides for cases where there is a mista$e of fact. The basis for rendering agreements void under section ", is that there has been no free consent between the parties-section ,B. %n the case of Dr. Albert and Ms. Cade we can see clearly there is a fraud committed by Ms. Cade to Dr. Albert. he promise to sell the house at price of !M"##### and give Dr. Albert six months to get the money. )ut because of some reason she sell the house to somebody else at price of !M*+#### within the period.
3raud is defined in section ,6 of CA ,+# to include certain acts which are committed with intend to induce another party to enter into contract. ection ,6 then lays down five different acts which may constitute fraud. As a general rule it may be stated that whatever a person causes another to act on a false representation which the ma$er himself does not believe to be true he is said to have committed fraud.
The best action that Dr.Albert can do is by claiming remedies for the breach of contract. 4 !emedy4is the method by which an in7ured party enforces a right or corrects a loss. The remedies available to the in7ured party will depend on the nature of the breach and the results will differ between parties. The usual remedy for a breach of contract is an award of damages which common law remedy.
%n case of Dr. Albert and Ms. Cade the best remedy that court can apply is damages. The main purpose of damages is to enable the innocent party to receive monetary compensation from the party responsible for the breach of contract. Damages not awarded to punish a wrongdoer but rather to put the in7ured party bac$ in the position that they would have occupied if the contract had been performed originally intended. Therefore damages are calculated on the basis of loo$ing at what the position should have been if the contract had been properly performed.
Damages are granted to a party as compensation for the damages loss or in7ury he suffered through a breach of contract. ection 6B of the Contracts Act ,+# sets out the provision for such compensation. %n order words the general principle for the assessment of damages is compensatory. The illustration to section 6B clearly indicate that the party may recover damages for other expenses incurred as a result of the breach and for the differences between the price of goods as contracted for and the actual price the goods were sold as a result breach.
Thus section 6B of CA provides that when a contract has been bro$en the party who suffers by the breach is entitled to receive from the party who has bro$en then contract compensation for any loss or damages caused to him thereby which naturally arise in the usual course of things from the breach or which parties $new when they made the contract to be li$ely to result from the breach of contract.
As a conclusion Ms. Cade need to be responsible for what she have done to Dr. Albert. %n the period of six months Dr. Albert have try his best to get the money and wor$ hard in order to fulfill the condition of the contract. )ut when Ms. Cade committed a fraud by selling the house to somebody else we can see Dr. Albert suffering loss because there is a lot that Dr. Albert had done in period of six months. %n a nutshell Dr Albert have !ights to sue Ms. Cade in the court and Ms. Cade need to give some monetary compensation to Dr. Albert as a remedies for breach of contract.
Assignment 1 Name : Mubarak bin Ahmad Student ID: 201407040020 Subject : Business La Lecturer: Ms! Shar"ina Bte! Shajahan Date #$ Submissi#n: 0%&0'&201(
)it* +ni"ersit* )#,,ege #$ Science and -echn#,#g* Business La . BB)L211' Indi"idua, Assignment
th
Dateline: 8 of March 2016
'0 marks /#rth 1 3,ease rint and bind *#ur assignment ri#r t# submissi#n! 5i"e / marks sha,, be deducted $#r each da* #$ ,ate submissi#n! 3r#b,ematic 6uesti#n: Dr.Albert has for some years run a clinic offering free medical care to impoverished families. The clinic occupies a house owned by Ms.Cade and leased from her on a month-to-month basis. As on 1 st of May, !1", Dr. Albert met Ms.Cade to as# if she would li#e to sell him the house. $%&d consider selling it for 'M!!, !!!,( she replied. $% thin# that % can raise 'M!!, !!! if you give me si) months,( said Dr.Albert. $*ut % will need to #now potential donors proof that % can buy the house at that price(. $%&ll be glad to help on that count,( smiled Ms. Cade. +he gave Dr.Albert a signed note reading as follows In return for all that Dr.Albert has done for our community, I hereby promise that if he delivers RM200, 000 to me at any time between now and November of this year, I will !ive him title to the buildin! that houses his clinic. Dr.Albert than#ed Ms.Cade. e too# the note and set to wor# raising the reuired money. %n the meantime, real estate prices soared. /n +eptember 1, Ms.Cade told Dr.Albert that she was putting the house on the mar#et. $%&ve raised 'M10!, !!! and will have the rest soon( he insisted. /n /ctober 1, Dr.Albert proudly presented Ms.Cade with a cheue for 'M!!, !!! and reuested the title to the clinic building. 2ith some embarrassment, she told him that she no longer held the title. $% 3ust sold the house for 'M"4!, !!!.( Advice Dr.Albert&s rights as against Ms.Cade.
