Multimedia University FOB 2014

Tutorial 3

1. Section 10 of the Contracts Act 1950 provides that all agreements are contracts of they are
made by the free consent of parties. By virtue of Section 14, consent is said to be free when it is
not caused by one or more of the following except :-

(a) coercion

(b) undue influence

(c) fraud

(d) stress

2. A intending to deceive B, falsely represents that 500 gantangs of indigo are made annually at
A’s factory and thereby induces B to buy the factory. The contract is valid at the option of B.

True/ False

3. B, having discovered a vein of ore on the estate of A, adopts means to conceal, and does
conceal, the existence of the ore from A. Through A’s ignorance B is enable to buy the estate at
an undervalue. The contract is voidable at the option of A.

True/ False

4. A, a man enfeebled by disease of age, is induced, by B’s influence over him as his medical
attendant, to agree to pay B an unreasonable sum for his professional services. B employhs
undue influence.

True/False

5. A having advanced money to his son, B, during his minority, upon B’s coming age, obtains,
by misuse of parental influence, a bond from B for a greater amount than the sum due in
respect of the advance. A employs undue influence.

True/ False

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6. A sells, by auction , to B a horse which A knows to be unsound. A says nothing to B about the
horse’s unsoundness. This is not fraud in A.

True/ False

7. A and B, being traders, enter upon a contract. A has private information of a change in prices
which would affect B’s willingness to proceed with the contract. A is not bound to inform B.

True/False

8. B says to A. “If you do not deny it, I shall assume that the horse is sound.” A says nothing.
Here A’s silence does not amount to speech.

True/False

9. A agrees to sell B a specific cargo of goods supposed to be on its way from England to Klang.
It turns out that, before the day of bargain, the ship conveying the cargo had been cast away
and the goods lost. Neither party was aware of the facts. The agreement is valid.

True/False

10. A agrees to buy from B a certain horse. It turns out that the horse was dead at the time of
the bargain, though neither party was aware of the fact. The agreement is void.

True/ False

11. A, being entitled to an estate for the life of B, agrees to sell it to C. B was dead at the time of
the agreement, but both parties were ignorant of the fact. The agreement is valid.

True/False

12. A promises, for no consideration, to give B RM100. This is a valid agreement.

True/False

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13. The following agreements are declared to be void except:-

(a) An agreement made without consideration;

(b) An agreement in restraint of trade;

(c) An agreement in restraint of marriage;

(d) An agreement with consideration.

14. A promises to superintend, on behalf of B, a legal manufacture of indigo, and an illegal

traffic in other articles. B promises to pay to A a salary of RM1,000.00 a year. The agreement is
void, the object of A’s promise and the consideration for B’s promise, being in part unlawful.

True/false

15. What is the basic difference between misrepresentation and fraud?

16. Does silence in the case of fraud amount to misrepresentation?

17. What is the basis for rendering a contract to be void?

18. What is stated under Section 66 of the Contracts Act 1950?

19. A pays to B RM100 in consideration of B’s promising to marry C, A’s daughter. C is dead at
the time of the promise. The agreement is void, does B repay A the sum of RM100?

20. A contracts to sing for B at a concert for RM100 which is paid in advance to A. A is too ill to
sing. A is not bound to make compensation to B for the loss of profits which B would have made
if A had been able to sing, but must A refund to B the RM100 paid in advance?

21. In relation to the law of contract, write short notes on the following:-

(a) coercion

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(b) mistake

22. Pak Mat wants to give his land to his daughter, Minah, for her 21st birthday. As Minah will
not be paying any money to her father, her father is worried that since there is no consideration
for the transfer of his land to Minah, the transfer may be void by virtue of section 26 of the
Contracts Act 1950. Advise Pak Mat.

23. State three exceptions to the general rule that contracts made by minors are void.

24. Ms. Adeline, as sixteen – year old girl, wants to know whether she can enter into
commercial contracts. Advise her as to what type of contracts she may enter into legally.

25. What is the main difference between a void contract and a voidable contract?