ELEMENTSSECTION # Contract Section 2 (h) CA DEFINITION Agreement enforceable by law. Can be in written, oral or implied by action. RULES 1. Contract by deed:Speciality contract. 2. Wirtten 3. Evidenced in writing 1. Can be made to anyone and everyone Proposal or offer 2(a) Readiness of the person who makes the offer to create a legal relation and to be bound by the law, whenever the terms of the proposal are agreed upon the acceptance. (proposal= able to convert into agreement upon acceptance) 2. Express or implied (S9) - Can be orally, in written, by conduct or combination 3. Obligation by inference 4. Legally capable of acceptance certain and commnunicated . contract exist. Must be clear. Communication of acceptance may be waived. An agreement by the acceptor to the term -Acceptance must be made on the same term contained in the proposal made by the as provided in the proposal and there must proposer. in definite or uncertain(impossible to hold there was an agreement btw parties) 6. Silence is not an acceptance.the acceptance may be expressed in some usual and resonable manner unless the proposal prescribes a manner in which it is to be accepted.S7(a) 1. Must be different from invitation to treat eg: display of goods in shop window -auctioners invitation for bids -circulars and advertisements -tenders -supply of information -statement of intention Acceptance 1.Can be written orally/by conduct/combine method.S8 -Performance of the condition of the proposal is an acceptance. S2(b) 1.S3.5. 3. 2. therefore promisee need not to communicate to the proposer that he had accept the proposal (unilateral contract) .Propsal must not be vague. Acceptance must be absolute and unqualified . with that acceptance. Must be communicated . binding not be any variation and modification. -S7(b). must have vakue in the eye of law there is an acceptance.4. Postal rule: -the acceptance is complete/effective as soon as the acceptor post his letter of acceptance though is not yet reach the proposer. When communication of acceptance is completed. Consideration S26 As a general rule. there must be a consideration to accept which call promise(promisee/acceptor must give something in return for the promise by promisor/offeror . an agreement witout consideration is void.S4(2)(a). 1. The word consideration is defined in S2(d)-when there is an offer. executed and past consideration 3.As long as the consideration has some economic value then the consideration is sufficient and valid. Consideration need not be adequate but sufficient S26(f). Executory. . Adequacy of consideration S26(2)-adequacy of consideration is immaterial(cannot merely void because of it) 4.2. Earl of Dunraven 1895 terms the competitors entered into a -2 yatchs entered club race. SLP won Agreement is void ab initio (no effectfrom the beginning) since lack of offer and acceptance because the agreement signed did follow HP act 1967. S4 (1). Thornton v. The offer is made when the proprietor of the machine holds it out as being ready to receive money. advetised they would offer $100 to any1 who consume time & usage. Clarke damaged Earl's yatch by contract with each other on those terms fouling. he sued SLP. Oral contract: Syed Jaafar bin Syed Ibrahim v. Shoe Lane Park Ltd 1971 Thornton parked his car at at Shoe Lane Parking but did not notice the warning at the entrance "Park at your risk" sign. Contract by conduct: Clarke v. Contract by conduct is valid becasue by entering the race on the club 2. the ball for fixed period of time but still attacked by influenza Lady won (dpt duit beb) 1. . not invitation to treat because the Carlil v Carbolic Smoke Ball Co Ltd (1893) offer is specific in term of the amount. Yap Yuen Fui 1984 -Affin made hire purchase agreement with Yap and sued Yap for pending payments. Maju Mehar agreement created a binding contract. Eventually his car damaged. Singh Travel & Tours Sdn Bhd 1999 Syed Jaafar won -Plaintiff entered into an oral agreement with the defendant's Managing Director that he will provide the passengers and thed efendant will provide tickets and visas to Syed Jaafar 2. Both agreed to undertook payment of damage – consequently Earl Dunraven had to caused by fouling.CASES - RESULTS - Contract is valid because offer is made. The acceptance takes place when the customer puts his money into the slot. Oral contract is valid because the 1. Affin Credit (M) Sdn Bhd v. pay. -Co. Boots Cash shelves and there is no sale affected Chemist (Southern) Ltd 1953. Paya break the agrement in 6th year. advetised they would offer $100 to any1 who consume purchased the product which no need an the ball for fixed period of time but still attacked by influenza acceptance letter. The contract is made for 12 years but by 6th year. Yuzin bte Abdullah @ Ho Yuzin or certaain. Paya Trubong Estate Sdn Bhd 1987 -There was a written agreement to purchase a part of defendant’s land in Penang to the maximum extent of about 15 acres or less. Paya has to pay for the damages since the aagreement fall within 12 years. but Hyde counter-proposed with $950 but Wrench disagree. Wrench 1840 Wrench offers to sell his estate to Hyde for $1000. The defendant was merely inviting the customer to choose items from the Pharmaceutical Society of Great Britain v. until the customer's offer to buy is D. money. . Ho Ah Kim v. 1. Hyde v. There is no contract but only invitation to treat.an owner of a self service shop selling drugs. Sou Yong v. Agreement is valid. No acceptance had occurred since the counter proposal made by Hyde constitutes the rejection tp the original proposal. Carlil v Carbolic Smoke Ball Co Ltd (1893) An acceptance is made when Carlil -Co. 2. Hyde agrees for $1000 later but Wrench refuse to sell. Bindley 1826 Silence is no acceptance.1. Contract is invalid due to the fact that the terms of the proposal were not clear 2. Felthouse v. P charged D accepted by the registered pharmacist at for selling listed poison without supervision of the counter by accepting the price registered pharmacist. Paya unable continue to pay to Ho. the acceptor post his letter of acceptance. Ignstius replied on 16 Aug. Lee Ming Chong 1986 on the part of the University. Acceptor post his letter of acceptance. agreement stated that Lee scholarship was the consideration on its have to serve the University five years min if fail to fulfill. A is bound with the obligation even without receiving the letter. The offer open until 20 Aug 1912. A propose to sell his car to B by letter. S42aa -Ignitius v. B accept the proposal by letter. Communication of offer was completed when acceptance was post on 16 Aug 1912 even though Bell did not know about it. but B is bound ONLY when the A received the letter.1. University of Malaya appointed the Lee to a that the University appointed him to the scholarship to pursue studies. Bell 1913: Bell made a proposal to sell his land to Ignatius. he is not bound to perform his obligation until his letter of acceptance reach the proposer. Eg. which contended that the scholarship agreement was void as it was he would not be able to take without the made without consideration appointment of the University . S4(2)(a)(b). Lee part fo rLee’s promise to serve it for five has to pay fine RM5000. 2. it was clear that there was consideration University of Malaya v. the proposal is bound to perform his obligation even though he did not know about the acceptance. but only received by Bell on 25 Aug. Lee breached the term and years after completing the course. The fact -alkisahnya. consulting engineer. Whether chocolate wrappers formed a part of consideration? Nestlé’s contention that acquiring and delivering the wrappers was merely a condition which gave the qualification to purchase and wasn’t part of the consideration. 3. ofter incorporation and for future service.doing an act -an offer of reward for an act. Nadarajah 1986. they offer a record for 1 shiling and 60 pence plus 3 wrapper from 6 penny choc bar.act to be remunerated either by payment of confirmant of some benefit. . Is it a valid consideration even though the were past??? 3. Beh Ihock 1964 Agreement is valid due to adequacy of -Beh agreed to transfer land to Phang on payment of $500 bt consideration because the consent was the worth more than that.transaction remains in the future (promise in return for a promise in future -K Murugesu v. 2.Nadarajah pestered Murugesu to sell the house to him. Chappel & Co Ltd v. Nestle Co Ltd 1960 To Nestle choc bar. Executed consideration. agree to pay 1% of the value of all the iron sold which considered as consideration of the service rendered by Schmidt on behalf of Kepong before its formation. Therefore. Murugesu contended there was no consideration for the offer to sell and the agreement was void for want of the consideration. -A offers RM500 to whom return his car. 1. 3 conditions: act must done on promisor request. in agreement co. and must be legally enformed and promised in advanced. Murugesu wrote piece of agreement to sell the house to Nadarajah for $26000 within the 3 month from the date of agreement. Phang Swee Kim v. B will receive the money if he -Kepong Prospecting Ltd v. Although the promise and claimt promise was unenfoceable. So. 2. he help formation of the Kepong and was appointed as MD. Beh refuse to honour the freely given by Beh. B return A's car in accordance with the offer. consideration was inadequate. B act as executed consideration. Agreement was a case of executory consideration. It was a valued consideration and Schmidt was entitled to claim the amt. Past consideration-Something wholly performed before making of the promise. Schmidt 1969-Schmidt was successfully returned A's car. Death of the party -It is important that the acceptor knows about the fact of the death or mental disorder of the proposer. by lapse of reasonable time. Failure of acceptor to fullfill condition precedence Ramsgate Victoria Hotel Co v. but Montefiore refused to take the share. Co only replied on 23 Nov 1864. If there is no time prescribe. 3. Saw Eng Chee 1997 2. Aberfoyle Plantation Ltd v. the agreement shall become null and void. Unable to fulfill the condition.CASES REVOCATION 1. Rejection Malayan Flour Mills Bhd v. the purchase is conditional on the vendor obtaining the renewal of the 7 leases. If the acceptance is made without the knowledge of the death or the mental disorder of the proposer then it is a good acceptance. MonteFiore 1866 Montefiore offered to buy Ramsgate's co chare by letter dated 8 June 1864. Lapse of time S6(b) -Propsal can be revoked by the lapse of the time prescribe in the proposal for its acceptance. - . 4. Khaw Bian Cheng 1960 -Parties agrees to sell and buy plantation. the revocation is only effective when it comes to the knowledge of the acceptor. Dickinsons v.5. Alexander 1830 but not afterwards. . . Merger - 6.Byrne v Tienoven 1880 -Revocation of proposal is made by post. and not at the time when the letter of revocation is posted 2.Must be communicated by notice to other party S6(a). received simultaneously. S5 (2)-Acceptance may be revoked at any time before comm of acceptance is complete against the acceptor Dunmore (Countess Of) v.Mustbe brought to the mind of the promisee/offerer Postal Rule: 1. Dodds(1876) -Revocation of proposal need to be communicated by third party who is acting on behalf of the proposer as the agent. . Revocate -Must be made before acceptance. -The letter of acceptance and revocation letter (sent by express). on account of natural love and affection -S26(a) contract valid if it expressed in writing.EXCEPTIONS-S26 agreement without consideration=void but there are exceptions on agreement made 1. the parties stand in a -In this case. Re Tan Soh Sim Case 1991. . her intention to leave all her properties to her four adopted children. registered under existing law. a woman on her deathbed expressed near relation to each other. Lee Ming Chong 1986 -alkisahnya. University of Malaya v. Lee has to pay fine RM5000. Lee breached the term and contended that the scholarship agreement was void as it was made without consideration . agreement stated that Lee have to serve the University five years min if fail to fulfill. he help formation of the Kepong and was appointed as MD. -promise is made in writting and signed by the person to be charged/his authorised agent. in agreement co. University of Malaya appointed the Lee to a scholarship to pursue studies. -Kepong Prospecting Ltd v. then the promise is enforceable.2. agree to pay 1% of the value of all the iron sold which considered as consideration of the service rendered 3. Agreement to compensate past voluntary act S26(b)-consideration is valid if promisee has done some voluntary act on his own for the promisor and subsequently the promisor promise to compensate the promisee for the act. Agreement to pay debt barred by limitation of law S26(c)-the promisor is liable to pay previous debt which the creditor cant recover through legal action due to the time limited by statute if the following condition arised: -debtor make a fresh promise to pay the debt. Schmidt 1969-Schmidt was consulting engineer. Accecptance by the Malayan did not constitute a valid cotract. So. June to Novemebr is not considered reasonable time. Saw has every right to treat there was no valid contract between parties.RESULTS The telex offer was nothing but an invitation ot treat in view of the condition imposed. The contract become null and void because Khaw did not renew the leases. In addition to accept the offer before the deadline. Malayan must fulfill all the terms and condition in the telex offer but they failed. Montefiore's refusal was justified because co's delay in acceptance the offer within resonable time. - . to keep the offer open. Defendant was free to revoke his offer at any time because there was no consideration given by the claimant of the promise.- 2. Revocation completed. . and there was no natural love and affection between parties standing in near relation to each other. .that it was not in writing. since the four children were adopted and did not have natural relations (blood ties) to that woman.The court held that the claims of the adopted children were not effective as it was contrary to Section 26(a) . it was clear that there was consideration on the part of the University. which he would not be able to take without the appointment of the University . The fact that the University appointed him to the scholarship was the consideration on its part fo rLee’s promise to serve it for five years after completing the course.It was a valued consideration and Schmidt was entitled to claim the amt.