LAW OF CONTRACT (1) LAW 436 TUTOR PUAN RAHIMAH BEE MOHD YUSOF YUSOF FACULTY FACULTY OF LAW.UiTM LAW.UiTM SHAH ALAM
Jana!" #$
%$LAW OF CONTRACT
Definition of a contract : >Section 2(h) Contract Act 1950 “an agreement enforceable by law i a contract! ELEMENTS ELEMEN TS OF A VALID CONTRACT
"lement re#$ire% for the formation of a contract 1& 2& & *& 5& ,&
'rooal Accetance Coni%eration +ntention Caacity -ree Conent
1.
PROPOSAL
1 &1
Definition >Section 2 (a) Contract Act 1950 “when one eron ignifie to another hi willingne to %o or abtain from %oing anything with a .iew to obtaining the aent of that other to the act ac t or abtinence/ he i i ai% to mae a rooal!
1 &2
'reton Cor S%n h% .& "%war% 3eong 4 r 619728 23 22 -C ;ibon .& ancheter City Co$ncil 619<98 1 All "= 9< 2 Affin Cre%it (ia) S%n h% . a $en -$i 6197*8 1 3 1,9 -C
-eat$re of a .ali% rooal
?he form of rooal Section 9 Contract Act 1950 “o far a rooal i ma%e in wor%/ wor%/ the romie i ai% to be e@re/otherwie in wor%/ wor%/ the romie i ai% ai% to be imlie%&
?he rooal m$t be clear an% certain So$ ong .& $Bin bte Ab%$llah o $Bin 619998 5 3 ,9,
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LAW OF CONTRACT (1) LAW 436 TUTOR PUAN RAHIMAH BEE MOHD YUSOF FACULTY OF LAW.UiTM SHAH ALAM
?he rooal an% accetance m$t correon% eeting of min%E &'nn a* i*+ =affle .& Fichelha$(17,*) 4 C 90, ?he rooal m$t be comm$nicate% Section 4 * Contract Act 1950 $t be ma%e nown to the offereeG m$t ha.e nowle%ge Carlill .& Carbolic Smoe all 61798 1H 25, = .& Clare (192<) *0 C3= 22<
>>?he rooal m$t be %iting$ihe% from an in.itation to treat 'reliminary negotiation >ar.ey .& -acey 61798 AC 552 ;oo% on %ilay >'harmace$tical Society of ;reat ritain .& oot Cah Chemit
>
A%.ertiement 'artri%ge .& Critten%en Coelho .& ?he '$blic Ser.ice Commiion "char%t arine ; . Sheriff/ igh Co$rt of alaya/ Seremban 4 r 620018 * 3 *9 CA A$ction 'ayne.& Ca.e arri .& Iiceron 4 -roBen -oo% S%n h% .& Silan% S%n h% 6199*8 1 3 0
=e.ocation of 'rooal
> Section 5 4 , Contract Act 1950 > =o$tle%ge .& ;rant(1727)
Section , Contract Act 1950 ,(a) J y Iotice of re.ocation ,(b)E y 3ae of time ,(c)E y fail$re of con%ition rece%ent
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,(%)E y %eath or mental %ior%er of offeror
LAW OF CONTRACT (1) LAW 436 TUTOR PUAN RAHIMAH BEE MOHD YUSOF FACULTY OF LAW.UiTM SHAH ALAM
2.
ACCEPTANCE
2&1
Definition
Sec 2(b) Contract Act 1950 “ when the eron to whom the rooal i ma%e ignifie hi aent thereto/ the rooal i ai% to be accete%/ a rooal when accete%/ become a romie!&
2&2
etho% of accetance ?here m$t be roer accetance of an offer& efore there i accetance in law/ there m$t be both the fact of accetance a well a comm$nication of the accetance
Section / Section < (b)/ Section 7 Section < (b)/ Accetance m$t be e@ree% in ome $$al an% reaonable manner Knle the rooal recribe the manner in which it i to be accete%& "g& Aia Cor 3t% .& S? =amarihnan 619*98 3 20,
2&
Accetance m$t be ma%e within a reaonable time Sec , (b) Accetance m$t be a oiti.e act -eltho$e .& in%ley -raer .& ".erett ther re#$irement
Accetance m$t be abol$te an% $n#$alifie% Section < (a) y%e .& French a counter-offer m$t be ditin!ui" from an in#$iry or re#$et by the offeree for f$rther information&
Ste.enon ac#$e 4 Co .& c 3ean
LAW 436 TUTOR PUAN RAHIMAH BEE MOHD YUSOF FACULTY OF LAW.UiTM SHAH ALAM
A contract cannot come into e@itence by mere acci%ent or coinci%ence& A contract i the .ol$ntary conent of artie/ conen$/ a meeting of min%& ence accetance m$t relate to the offer/ m$t correon%& +f the offeree ha no rior nowle%ge of the offer there i no way he can accet&
= .& Clare
CroE offer i not an accetance ?inn . offman
2&*
Accetance m$t be comm$nicate%
>
Section / Section * (1)/
* (2)(a)(b) Contract Act 1950
Comm$nication of accetance/ when comleteL
+ntantaneo$ mo%e of comm$nication "ntore 3t% . ile -ar "at Cor rinibon 3t% . Stahag Stahl
Sec * (2) (a) (b)
A%am .& 3in%ell +gnati$ .& ell
2&5
=e.ocation of Accetance > Sec 5 (2) Contract Act 1950 > Fhen can it be ma%e L“Any time before accetance i comlete&&!
Sec =e.ocation m$t be comm$nicate%&
Sec * () (a) (b)
*
Comm$nication of re.ocation m$t be comlete&
LAW 436 TUTOR PUAN RAHIMAH BEE MOHD YUSOF FACULTY OF LAW.UiTM SHAH ALAM
#.
CONSIDERATION Definition
$%1& '()*ur+, L( of En!)(nd Me(nin! of conider(tion
“Mal$able coni%eration ha been %efine% a ome right/ interet/ rofit or benefit accr$ing to the one arty/ or ome forbearance/ %etriment/ lo or reonibility gi.en/ $ffere% or $n%ertaen by the other at hi re#$et& +t i not neceary that the romior ho$l% benefit by the coni%eration& +t i $fficient if the romiee %oe ome act from which a thir% eron benefit an% which he wo$l% not ha.e %one b$t for the romie& ?h$ coni%eration for a romie may conit in either ome benefit conferre% on the romior or %etriment $ffere% by the romie or both& n the other han%/ that benefit or %etriment can only amo$nt to a coni%eration $fficient to $ort a bin%ing romie where it i ca$ally line% to that romie& -$rthermore/ coni%eration m$t be %iting$ihe% from both a moti.e an% a con%ition& Coni%eration may be e@ec$te% or e@ec$tory/ b$t it may not be at/ it nee% not be a%e#$ate b$t it m$t be of ome .al$e/ an% it m$t mo.e from the romie!&
Section 2 %d& Contr(ct Act 1$/0
“when/ at the %eire of the romior/ the romie or any other eron ha %one or abtaine% from %oing/ or %oe or abtain from %oing/ or romie to %o or to abtain from %oing/ omething/ $ch act or abtinence or romie i calle% a coni%eration for the romie!
Currie . Mi( 1345-306 A)) ER 737 3$h %efine coni%eration a
“ome right/ interet/ rofit or benefit accr$ing to the one arty or ome forbearance/ %etriment/ lo or reonibility gi.en/ $ffere% or $n%ertaen by the other!
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LAW 436 TUTOR PUAN RAHIMAH BEE MOHD YUSOF FACULTY OF LAW.UiTM SHAH ALAM
=$le ;o.erning Coni%eration • • • •
"@ec$te% coni%eration "@ec$tory coni%eration 'at coni%eration Coni%eration may mo.e from the romie or a thir% arty
Fhat i e@ec$te% coni%erationL Coni%eration which ha been co89)eted by a arty at the time of the contract& Fhat i e@ec$tory coni%erationL Coni%eration which i +et to *e !ien or erforme%& =ea% : Fong on 3eong Da.i% .& IooraBman bin A%nan619958 3 27/ CA +n Carlill .& Carbolic Smoe all Co 3imite% ?he offer ma%e by the comany in the a%.ertiement remaine% oen $ntil r Carlill bo$ght the moe ball/ $e% it an% contracte% infl$enBa& ?hi act of erformance wa the coni%eration an% it remaine% e@ec$tory $ntil the erformance i comlete%& 'at Coni%eration Kn%er "nglih law/ generally at coni%eration i no coni%eration & owe.er in limite% cae/ at coni%eration ha been recogniBe% a goo% coni%eration/ the e@cetion being that / “ the act %one at the re#$et of the romior!& =ea% cae : 3amleigh .& raithwait $nt .& ate =e c Ar%le
,
LAW 436 TUTOR PUAN RAHIMAH BEE MOHD YUSOF FACULTY OF LAW.UiTM SHAH ALAM
+n alayia/ at coni%eration i goo% coni%eration& Coni%eration that conit of omething wholly erforme% before the romie wa ma%e& ?he erformance of the act wa not ma%e in reone to the romie& See Section 2 (%) Contract Act 1950 =ea% cae : E;$thrie Fa$gh h% .& alaian $th$c$mar$ 619<28 2 3 ,2 -C E Neong 'roecting 3t% 4 r .& Schmi%t 619,78 13 1<0/ (19,<) 2'CC *,5/'C E =aOa of Menatagiri .& Sri Nrihnayya A+= 619*78 E Fotheroon an% Co 3t% . enry Agency o$e
Section 2, Contract Act 1950 “ Agreement witho$t coni%eration/ .oi%/ $nle J (a) it i in writing an% regitere% $n%er the law an% i ma%e on acco$nt of nat$ral lo.e an% affection between artie tan%ing in a near relation to each other& =ea% cae: =e ?an Soh Sim 619518 3 21 (b) a romie to comenate for omething %one =ea% cae: Eon at coni%erationE
(c ) a romie to ay a %ebt barre% by limitation law =ea% cae : Naaleewarar ?emle .& ? ?ir$na.$ara$ (ill$tration (e) Sec 2,
A%e#$acy of coni%eration Coni%eration nee% not be a%e#$ate& +ll$tration (f) Sec 2,
<
owe.er& ?he a%e#$acy of the coni%eration may be an i$e in cae where the oition i taen that there wa no free conent gi.en to the agreement& =ea% cae : ;$thrie Fa$gh h% . alaian $th$ch$mar$ 619<28 2 3 ,2 'hang Swee Nim .& eh + oc 619,*8 3 7 -C
LAW 436 TUTOR PUAN RAHIMAH BEE MOHD YUSOF FACULTY OF LAW.UiTM SHAH ALAM
'erformance of e@iting %$ty&
• • •
'erformance of an e@iting $blic %$ty 'erformance of an e@iting contract$al %$ty owe% to the romior 'erformance of an e@iting %$ty imoe% by contract with a thir% arty&
'ayment of a leer $mG wai.er of erformance
Section ,* Contract Act 1950 =ea% Cae : Nera Singh . ariam Singh 619,,8 'oition in "nglan% =ea% Cae : 'innel cae -oae .& eer
Doctrine of 'romiory "toel “ a arty who ha rereente% that he will not init $on hi trict right $n%er the contract will not be allowe% to reile from that oition/ $nle he ha gi.en reaonable notice of hi intention to re.ert to the original oition& =ea% cae : Central 3on%on 'roerty ?r$t 3t%& .& igh ?ree o$e 3t%& 619*
See alo : 9 (1) alb$ry 3aw of "nglan%/ *th "% =ei$e 1997&
LAW 436 LECTURER PUAN RAHIMAH BEE MOHD YUSOF FACULTY OF LAW.UiTM SHAH ALAM
3ect$re K?3+I"/ IDA 11 AK;KS? 2007
5.
INTENTION TO CREATE LE:AL RELATIONS Definition
?here i no tat$tory %efinition for intention to create legal relation in the Contract Act 1950& “An agreement i not a contract in the trict ene of the wor% $nle it i the common intention of the artie that it ho$l% be legally enforce%& S$ch an intention i normally inferre% from the nat$re of the agreement& -or intance/ in the cae of agreement reg$lating commerce or b$ine/ it i ob.io$ that the artie inten% legal cone#$ence to followQ ,! &'n-!a in the cae of agreement relating to ocial agreement/ it i inferre% a a matter of co$re that there i no common intention to create legal obligation&! Fhyatt C in Choo ?iong in 4 r .& Choo oc Swee 6195983,< ;enerally/ cae in thi area are %i.i%e% into two clae : i)
Social/ family an% %ometic agreement where the reence or abence of intention to create legal relation %een% $on the inference to be %rawn by the co$rt from the lang$age $e% by the artie an% the circ$mtance in which they $e it&
ii)
Commercial agreement where the intention to create legal relation i re$me% an% m$t be reb$tte% by the arty eeing to %eny it&
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ence/ it can be ai% that in commercial agreement/ the general r$le i that artie inten% the agreement to ha.e legal cone#$ence& owe.er/ there are e@cetion to thi general r$le/ i&e the agreement i ma%e R$bOect to contract! or there wo$l% be an Rhono$r cla$e&
Cae on +ntention to create legal relation : 1& 2& & *& 5& ,& <& 7&
alfo$r . alfo$r erritt . erritt one . 'a%a.atton 'hiong Nhon .& Chonh Chai -ah Choo ?iong in 4 r .& Choo oc Swee Faeling . =iley (1951) 51 S= (ISF) 17 =oe 4 -ran .& = Cromton 4 ro Nleinwort enon 3t% . alayian ining Cor h% 619798 All "= <75
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TUTOR PUAN RAHIMAH BEE MOHD YUSOF FACULTY OF LAW.UiTM SHAH ALAM
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