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An offer can be oral or written as long as it is not required to be written by law. It is the
definite expression or an overt action which begins the contract.
is simply
what is
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offered to another for the return of that person's promise to act. It cannot be ambiguous
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or unclear. It must be spelled out in terms that are specific and certain, such as the
identity and nature of the object which is being offered and under what conditions and/
or terms it is offered.
Acceptance
As a general proposition of law, the acceptance of the offer made by one party by the
other party is what creates the contract. This acceptance, as a general rule, cannot be
withdrawn, nor can it vary the terms of the offer, or alter it, or modify it. To do so makes
the acceptance a counter-offer. Though this proposition may vary from state to state, the
general rule is that there are no conditional acceptances by law. In fact, by making a
conditional acceptance, the offeree is rejecting the offer. However the offerer, at his
choosing, by act or word which shows acceptance of the counter-offer, can be bound by
the conditions tendered by the offeree. From the newspaper, Wang claimed that Ngan
was interested in co-operating with her on a development project in Xian Quijiang,
China, which she initiated and planned. Ngan made an offer to Wang to cooperate with
her on the project. They signed an agreement on 26 February 2007. As a result of the
signing agreement, Wang is presumed to accept the offer.
Consideration
Consideration for a contract may be money or may be another right, interest, or benefit,
or it may be a detriment, loss or responsibility given up to someone else. Consideration
is an absolutely necessary element of a contract. As a word of caution, it should be noted
that consideration has to be expressly agreed upon by both parties to the contract or it
must be expressly implied by the terms of the contract. A potential or accidental benefit
or detriment alone would not be construed as valid consideration. The consideration
must be explicit and sufficient to support the promise to do or not to do, whatever is
applicable. However, it need not be of any particular monetary value. Mutual promises
are adequate and valid consideration as to each party as long as they are binding. This
rule applies to conditional promises as well. As additional clarification, the general rule
is that a promise to act which you are already legally bound to do is not a sufficient
consideration for a contract. The courts determine the application. Under the signed
agreement, Ngan agreed to pay Wang RM13 million as remuneration and 25% shares in
a company called CM Xian Qujiang Properties (M) Sdn Bhd. Wang will be appointed as
deputy manager or director to manage the company. The action by Wang is a good
consideration for the promise by Ngan.
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dissertations
It is a basic requirement to the formation of any contract, be it oral or written, that there
has to be a mutual assent or a "meeting of the minds" of the
parties on all proposed
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terms and essential elements of the contract. It has been held by the courts that there
can be no contract unless all the parties involved intended to enter into one. This intent
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is determined by the outward actions or actual words of the parties and not just their
secret intentions or desires. Therefore, mere negotiations to arrive at a mutual
agreement or assent to a contract would not be considered an offer and acceptance even
thought the parties agree on some of the terms which are being negotiated. Both parties
must have intended to enter into the contract and one can not have been misled by the
other. That is why fraud or certain mistakes can make a contract voidable. The
agreement between Wang and Ngan is a business agreement. Therefore, the rebuttable
presumption according to case laws as discussed above would suggest that Wang and
Ngan are intended to be legally bound. Furthermore, no exclusion clause was mention
on the agreement. The signed agreement confirms that both parties intention to be
legally bound.
Capacity to contract
The general presumption of the law is that all people have a capacity to contract. A
person who is trying to avoid a contract would have to plead his or her lack of capacity
to contract against the party who is trying to enforce the contract. Section 11 of the
Contracts Act 1950 provides that Every person is competent to contract, who is of the
age of majority according to the law to which he is subject, and who is of sound mind,
and is not disqualified from contracting by any law to which he is subject". It means that
the person who enters into the contract must have the full capacity in terms of age and
mind. The age of majority in Malaysia is 18 years old.
Both Wang and Ngan were older than 18 years old when they enter into the contract.
Section 12 (1) of the Contract Act 1950 provides that A person is said to be of sound
mind for the purpose of making a contract if, at the time when he makes it, he is capable
of understanding it and of forming a rational judgment as to its effect upon his
interests." As a result, the agreement is valid.
Free consent
A contract is not enforceable if its object is considered to be illegal or against public
policy. In many jurisdictions contracts predicated upon lotteries, dog races, horse races,
or other forms of gambling would be considered illegal contracts. When entering into
agreement, the parties must be free consent to contract. The free consent as provided in
Section 10(1) All agreements are contracts if they are made by the free consent of
parties competent to contract..." Under Section 14, consent must be free and not caused
by
a. coercion, as defined in section 15;
b. undue influence, as defined in section 16;
c. fraud, as defined in section 17;
d. misrepresentation, as defined in section 18; or
e. mistake, subject to sections 21, 22 and 23.
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Coercion is described in Section 15 of the Contracts Act 1950 as the the committing, or
threatening to commit any act forbidden by the Penal Code, or the unlawful detaining or
threatening to detain, any property, to the prejudice of any person whatever, with the
intention of causing any person to enter into an agreement". Undue influence in Section
16 of Contract Act 1950 is said to exist when the relations subsisting between the
parties are such that one of the parties is in a position to dominate the will of the other
and uses that position to obtain an unfair advantage over the other". Section 17 of the
Contracts Act 1950 explains that fraud refers to acts committed by a party to a contract
with the intent to deceive the other contracting party. Misrepresentation would refer to
untrue made by a representor and that induce the other to enter into a contract. Mistake
under the Contract Act 1950 includes a mistake as to a matter of fact (by one or both
parties) and mistake as to any law in force or not in force in Malaysia.The agreement
made between Wang and Ngan did not consist of coercion, under influence, fraud,
misrepresentation and mistake. So, both parties entered into the contract on their own
free will and free of consent.The terms and conditions on the agreement must be clear
and certain because an uncertain agreement is voidable. Also, the business that Wang
and Ngan are doing does not involve illegal activity. Since all the elements above are
present in the dealing
between Wang and Ngan, the formation of the signed contract on Feb 26, 2007 is valid.In
this case, Tan Sri Ngan did not perform his promises as stated in the agreement signed
by both Ngan and Wang. Therefore, Wang appointed a lawyer to sue Ngan for the
breach of contracts and seek for the compensation as promised in the agreement of
RM13mil and other losses. This case is similar with the case of:
Section 38(1) of the Act provides that the parties to a contract must either perform, or
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offer to perform, their respective promises, unless the performance
is dispensed
with or
excused under the Act, or of any other law. Section 56 of the Act regulates the position
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Under section 40 of contract law, rescission is said when
a party to a contract has
refused to perform, or disabled himself from performing, his promise in its entirety, the
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promisee may put an end to the contract unless he has signified,
words
or conduct,
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his acquiescence in its continuance". Any non performance contract of either party will
entitle the other party to rescind the contract. For example in the case of :
Travelsight (M) Sdn Bhd & Anor v Atlas Corp Sdn Bhd [2003] 6
MLJ 658
Pursuant to a sale and purchase agreement dated 15 March 1996, the first plaintiff
agreed to purchase from the defendant a piece of property known as suite no: 1202,
Tower No: B, Wisma Pantai, Kuala Lumpur (hereinafter referred to as the said
"property") for the purchase price of RM816,696 subject to the terms and conditions as
contained in the sale and purchase agreement (hereinafter referred to as the said
"agreement"). Credit facilities were extended by the second plaintiff - RHB Bank Berhad,
to the first defendant and so, pursuant to a loan agreement cum deed of assignment
dated 6 December 1996 the first plaintiff had assigned all its rights to the said agreement
to the second plaintiff absolutely.
Damages
Section 74 of Contract Act 1950 ,an innocent party may claim damages from the party in
breach in respect of all breaches of contract. The damages may be nominal or
substantial. Nominal damages are awarded where the innocent party has suffered no
loss as a result of the other's breach and substantial damages are awarded as monetary
compensation for loss suffered as a result of the other party's breach.For an innocent
party to obtain substantial damages he must show that he has suffered loss as a result of
the breach (remoteness) and the amount of his loss (measure). It is up to the party in
breach to argue that the innocent party has failed to mitigate his loss. This is an
equitable remedy granted at the court's discretion.
Specific performance
Specific performance is a discretionary remedy granted by the court, and it is under the
Specific Relief Act 1950. It is a decree by the court to compel a party to perform his
contractual obligations. It is usually only ordered where damages are not an adequate
remedy It is a general rule that specific performance will not be ordered if the contract
requires performance or constant supervision over a period of time and the obligations
in the contract are not clearly defined. Specific performance is often ordered in relation
to building contracts because the contract deals with results rather than the carrying on
of an activity over a period of time and it usually defines the work to be completed with
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Injunction
dissertations
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Injunction is classified under Part III of the Specific Relief Act 1950 as Preventive
Relief. It is an equitable remedy and therefore only granted at the discretion of the
court. It is awarded in circumstances where damages would not be an adequate remedy
to compensate the claimant because the claimant needs to restrain the defendant from
starting or continuing a breach of a negative contractual undertaking (prohibitory
injunction) or needs to compel performance of a positive contractual obligation
(mandatory injunction). In exercising its discretion the court will consider the same
factors as above for specific performance and will use the balance of convenience test
(weighing the benefit to the injured party and the detriment to the other party). An
injunction will not be granted if its effect would be to compel a party to do something
which he could not have been ordered to do by a decree of specific performance.
Quasi-Meruit
It creates obligations at common law, distinct from obligations under a contract. It is an
area of law in its own right.Quasi-contractual remedies are sometimes available either
as an alternative to a remedy for breach of contract or where there is no remedy for
breach of contract. For example in the case of :
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Based on the above information, the claimant may recover damages for other expenses
incurred as the result of the breach of contract. They might claim for loss of profit as in
the case of :
Under the Contract Act 1950 section 24(e) Any contract which its consideration or object
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For this case, for instance producing materials that will compete with the Malaysian
products, the contract will be held as legal and is enforceable by law provided that the
producing material does not involve in any of the above criteria. The contract is
enforceable by law as long as the producing materials are legal, does not hurt others,
and not against the public policy. For Example in the case of :
The Aspinall Curzon Ltd v Khoo Teng Hock [1991] 2 MLJ 484
In each of the above cases, the consideration or object of an agreement is said to be
unlawful. Every agreement of which the object or consideration is unlawful is void.
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accounts and full information of all things affecting the partnership to any partner or
his legal representatives". In the case of :
I will consider Wang as an agent to Ngan in China. Ngan, a Malaysian, will need a local
people to help and assistance to act on his behalf or become his proxy to perform
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certain act in China. In this case, Ngan may appoint WangFIND
as an
agent to deal with the
local government or as a real estate agent to purchase a land in China. As a result, their
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agreement is governed by the Contract Act 1950 section 135. It said that an agent" is a
person employed to do any act for another or to represent another in dealings with
third persons. The person for whom such act is done, or who is so represented, is called
the principal". Ngan as the principal could employ Wang as an agent to deal with the
Chinese local government. Wang, as an agent, must obey the principals instruction. If
there is no instruction from the principal, Wang shall act according to the customs
prevail. In return, Ngan as a principal shall pay Wang commission or other
remuneration unless the agency relationship is gratuitous.For example in the case of:
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