LAW OF PURCHASE

HIRE

DEFIITION: S 2 OF HPA 1967: HPA includes a letting of goods with an option to purchase and an agreement for the purchase of goods by instalments. But does not include agreement: (a) The prop in goods passed at the time of the agreement (b) prn engaged in the trade of the same nature. CREDIT CORPORATION v MSIAN INDUSTRIAL FINANCE -Held that until the hirer had exercised his option to purchase by paying the total amount and fulfilling all his obligations under HPA, no prop in the car passed to the hirer. TRACTORS MSIA v KUM. PEMBINAAN MSIA -Held: it was a clear intention of the parties that the prop of the tractor was not to pass until full payment. Therefore it was not a sale on instalment term but more in the nature of a hire purchase. The Appellant had right to repossess. GOODS SPECIFIED IN FIRST SCHEDULE 1) 2) Consumer goods, Motor vehicles

NEW SOUTH WALES TRADER v ROURKE Even if the parties are aware that the goods are 2nd hand, the implied conditions as to merchantable quality and fitness for particular purpose could not be excluded UNLESS the agreement contain the statement tt the goods are 2nd hand. S 7 (3) of HPA Where the hirer makes known to the owner the particular purpose for which the goods are required, there shall be implied condition as to fitness for particular purpose but no such condition if the goods are second hand goods and owner proves that the hirer has acknowledge the statement that the goods are second goods. TRI-PARTITE HPA LIABILITY OF OWNER MISREPRESENTATION

S 4D- SEPARATE AGREEMENT S 5(1)- SERVICE OF DOCUMENT IMPLIED TERM IN HPA S S S S S 7(1) (a)- quiet possession 7(1) (b)- owner right to sell 7(1)(c)- free from charges 7 (2)- merchantable quality 7(3)- fitness 4 particular purpose

STATUTORY RIGHT OF HIRER

1) 2) 3) 4) 5) 6) 7)

S9: right to obtain doc and info from owner and copy of statement relating to financial position S10: right to appropriation of payment if he have more than 1 agreement with same owner S11: right to apply for order 4 goods 2 b removed. S12: right to assign right, title and interest to ors w the consent of the owner S13: right to pass right title and interest by operation of law to the personal representative or to liquidator. S14: right to complete the agreement earlier than stated S15 right to terminate agreement either by returning the goods or require the owner to sell the goods to any person introduced by the hirer.

&

DEALER

S8 (1) HPA: Where there is misrep by dealer, owner or its agent in the negotiation the hirer has right to claim against the owner and prn making the representation. PARTIES INVOLVE IN HPA 1) 2) 3) 4) OWNER HIRER DEALER GUARANTOR

S16(1): the ground 4 repossession the hirer has defaulted in two successive payment or last payment. Serve written notice in FOURTH SCHEDULE. 21 DAYS. S16(2) waiver of right if hirer conceal @ removed the goods. S16(4) owner must provide receipt upon taking possession S16(3) owner must serve to the hirer & guarantor form in 5th SCHEDULE owner cannot sell the goods w/out consent from the hirer until expiration of 21 DAYS. S18(1) RIGHT OF THE HIRER- Hirer may asked the owner to redeliver the goods to him upon payment made to the owner, or sell the goods to any person introduced by the hirer. S17(1) owner cannot sell, dispose the property w/out consent b4 expiration of 21 DAYS. S18(4) if the owner wish to sell the goods by auction : he should give notice not less than 14 DAYS B4 AUCTION to the hirer or Required the hirer to purchase the goods at the price less than estimation value made by the owner.

Second hand goods JOHN MAGRATH v APPLEBEE The loader was held as new and not secondhand merely because it had been involved in a minor accident. -The owner must prove that the hirer acknowledges in writing that the goods are second hand goods.

FORMATION AND NATURE OF HPA S 4 (1) (a) OWNER-HIRER -S 4 (1) (b) DEALER-HIRER-OWNER -S4A AGREEMENT IN WRITING -S 4B- AGREEMENT 2 B SIGNED S 4C- CONTENTS OF HPA

RIGHT OF OWNER ON REPOSSESSION

8)

Ratify within reasonable time Must not injure 3 party. AGENCY BY NECESSITY a) Deserted wife b) Commercial agent tt necessary to act in order to preserve the property of the principal
rd

9) LAW OF AGENCY
TYPES OF AGENT 1) BY AUTHORITY: a) Universal agent b) General agent c) Special agent THEIR FUNCTION a) Del credere agent b) Factors c) Brokers d) Auctioneers e) Bankers 3)

2)

-Fulfil 3 conditions: 1) Impossible to get principals instruction 2) Necessary action, in order to prevent greater loss to the principal 3) Agent act in a good faith. SPRINGER v GREAT 4) AGENCY BY ESTOPPEL If a person by his words or conduct allows 3rd party to believe that someone is his agent, later on he will be estopped from denying such fact. AUTHORITY OF THE AGENT 1) ACTUAL AUTHORITY a) Express authority b) Implied authority OSTENSIBLE/APPARENT AUTHORITY

CREATION OF AGENCY 1) AGENCY BY APPOINMENT a) Express appointment S138 b) Implied appointment -Holding out -Presumption btw husband & wife -Partnership Act AGENCY BY RATIFICATION a) Agent exceed authority b) Prn has no authority but has acted as he has the authority. ratify; Act must be unauthorised Act recognised by law Agent act as agent Must have principal Principal must have capacity Principal have knowledge of material fact Ratify the whole contract

2)

2)

DUTIES OF AGENT 1) S 164 Obey principal instruction, in the absence of instruction according to custom. 2) S 165- to exercise care and diligence in carrying out his work. KEPPLE v WHEELER 3) S 166- To render proper accounts on demand.

-How to 1) 2) 3) 4) 5) 6) 7)

4) S 171- To pay all sums received for principal subject to deductions under S 170 5) S 167- To communicate with the principal. In the situation where it is impossible to communicate agency by necessity exist. S 142 6) Not to let his own interest conflict with his duty, ie exercise duty for the benefit of principal. WONG MUN WAI v WONG THAM FATT 7) S 169- Agent cannot act for both parties without consent of both parties. WONG MUN WAI v WONG THAM FATT 8) Not to make any secret profit out of the performance of his duty eg: bribe, secret commission ors. (REMEDIES AVAILABLE TO PRINCIPAL) a) may repudiate the contract if there is disadvantageous S 168 b) may recover e amount of e bribe S 169 c) may refuse to pay remuneration d) dismiss the agent 4 breach of duty e) sue the agent and 3rd party for any loss 9) Not to disclose confidential info or doc entrusted to him by his principal 10) Not to delegate his authority delagatus non potest delegare EXCEPTIONS: i) Principal approves the delegation. ii) Presumption tt agent has power to delegate. iii) Customs of the trade permit delegation. iv) Nature of agency provides delegation in order to complete the biz. v) Necessity vi) Act 2 b done purely ministerial or clerical and does not involve exercise of discretion. DUTIES OF PRINCIPAL 1) To pay agents remuneration unless the agency relationship is gratuitous.

S 172 When remuneration sd b paid. 2) Not wilfully prevent agent from carrying his commission. 3) To indemnify agent for acts done in the exercise of his duties S 175- Indemnify against lawful act. S 176- Injury to third party S 177- agent suffers injury cause by negligence by principal. PRINCIPAL & 3RD PARTY 1) 2) 3) NAMED PRINCIPAL DISCLOSED PRINCIPAL UNDISCLOSED PRINCIPAL

TERMINATION OF AGENCY a) BY ACT OF PARTIES S 154i) Revocation by principal ii) Renunciation by agent b) BY OPERATION OF LAW S154i) By performance of the contract ii) By expiration of period fixed iii) By death of either principal/agent iv) By insanity of principal/agent v) By the insolvency of the principal vi) By happening of event which render the agency unlawful

LAW OF CONTRACT
AGREEMENT: -Essence of contract, to have an agreement there should be an offer by one party and accepted by ors party. INVITATION TO TREAT -Not an offer ie not capable of being turned into contract by acceptance. -Mere invitation by one party to anor to make an offer. -e.g: advertisements in newspaper, shop widow displays, self service supermarket, auction, catalogues, price ticket. OFFER (PROPOSAL) -S2(a) A proposal is made when one person signifies to anor his willingness to do or to abstain from doing anything, in order to obtain the assent of that ors. -May be express/implied. -Can be made to: a) A definite person b) A definite class of person c) To the general public CARLILL v CARBOLIC SMOKE BALL COMMUNICATION OF OFFER -Offer must be communicated. -Offeree cannot accept an offer, which he is ignorant. R v CLARKE -Cannot claim reward as the info given not in reliance on the offer of the reward. TERMINATION OF OFFER a) Revocation of offer S 5(1) at any time b4 acceptance S 6 proposal is revoked: -Notice of revocation revocation must be made b4 acceptance acceptance thru post, complete against proposer upon posting.

BYRNE v TIENHOVEN DICKINSON v DOBBS -Lapse of time prescribed, if no time prescribed within reasonable time -Failure of acceptor to fulfil condition -Death/mental disorder of the proposer b) Rejection of offer c) Counter-offer HYDE v WRENCH -Counter-offer need to be distinguished from request 4 further information. STEVENSON HAGUES v MC LEAN ACCEPTANCE -S2(b) -S7 Acceptance must be absolute and unqualified. LOW KAR YIT v MOHD ISA COMMUNICATION OF ACCEPTANCE -S4(2) ENTORES v MILES FAR EAST CORP -S7(b)- Acceptance should be in usual & reasonable manner unless proposal prescribes manner to be accepted. -S8 reciprocal promise -S2(b) positive act of acceptance -acceptance by silence is not acceptance FRASER v EVERETT FELTHOUSE v BINDLEY -Acceptance thru post IGNATIUS v BELL -Revocation of acceptance S5(2) CONSIDERATION -S2 (d) -S26 agreement made without consideration is void Types of consideration

and in return for an act that has already been performed. Past consideration was not recognised under English Law.

INTENTION RELATIONS

TO

CREATE

LEGAL

2)

Executed consideration- when a promise is made in return for the performance of an act done by the other and when the act constituting the consideration is completely performed the consideration is said to be executed. executory consideration- when the parties exchange promises to perform acts in future.

i) In business agreement there is presumption that the parties intend legal consequence to follow. ii) In Domestic agreement no presumption as against the intention to create legal relation unless proven otherwise. BALFOUR v BALFOUR No intention to create legal relation as the parties did not intend that they should be attended by legal consequences. MERRIT v MERRIT There was intention to create legal relation because the plaintiff managed to prove such intention by putting the agreement into writing and signed. LEGAL CAPACITY (COMPETENCY) S10 All agreement are contract if they are made by parties competent to a contract S11 Any person is competent to contract if he attained the age of majority, sound mind and not disqualified from contracting by any law. MINOR -all contract entered into by minor are void TAN HEE JUAN v TEH BOON KEAT The agreement entered into by the plaintiff & defendant was void since the plaintiff was a minor. -EXCEPTIONS 1) CONTRACT FOR NECESSARIES S 69 GOVT OF MSIA v GURCHARAN SINGH 2) SCHOLARSHIP CONTRACT S4 3) INSURANCE 4) APPRENTICESHIP UNSOUND MIND -S 12 person is said to be unsound mind due to sickness, alcohol and drugs. -S 12(1) person is said to be sound mind if at the time of making the contract he is

3)

Rules governing consideration a) Consideration required for all simple contract b) Consideration must be sufficient but need not be adequate c) Consideration must be legal d) Consideration need not move from the promisee e) Waiver of performance EXCEPTION TO THE GENERAL RULES (Where an agreement without consideration is VALID) S 26

a)

An agreement made on account of natural love and affection between parties standing in near relation to each other. Provided that the agreement must be in writing & registered. S26(a) An agreement to compensate for a past voluntary act. S26(b) An agreement to compensate for an act the promisor was legally compellable to do S26(c) An agreement to pay a Statutebarred Debt S26(d)

b) c) d)

1)

Past consideration- where a promise is made subsequent to

capable of understanding it and forming a rational judgement -S 12(2) Person usually unsound mind, but occasionally sound mind can make contract when he is of sound mind. -S 12(3) Person who is sound mind, but occasionally unsound mind may not make contract when he is of unsound mind. -EFFECT OF CONTRACT UNCETAINTY CERTAINTY S 30 agreement, the meaning which is not certain, or capable of being certain made certain, are void. FREE CONSENT S10 agreement are contracts if they are made by the free consent of parties S14- consent is said to be free when it is NOT caused by: a)COERCION S15 b)UNDUE INFLUENCE S16 -3 circumstances whereby a party id deemed to be in a position to dominate the will of anor 1)where one party hold a real @ apparent authority on the ors eg: parents authority over a child 2)Where one party stands in a fiduciary relation to the ors eg: solicitor & client, doctor & patient ALLCARD v SKINER DATUK JAGINDER SINGH v TARA RAJARATNAM 3)where a party makes a contract with a person whose mental capacity is temporarily/ permanently affected by reason of age, illness, or mental/bodily distress c)FRAUD S17 WEBER v BROWN LETCHEMY v ANNAMALAY d)MISREPRESENTATION S18 e)MISTAKE S21, 22, 23

FORMALITIES -no particular requirement/form -can be made either orally or in writing.

DISCHARGE OF CONTRACT A) DISCHARGE BY PERFORMANCE S38 Exceptions: DIVISIBLE CONTRACTS, SUBTANTIAL PERFORMANCE, ACCEPTANCE OF PARTIAL PERFORMANCE, PREVENTION OF ERFORMANCE. B) DISCHARGE BY AGREEMENT S63 C) DISCHARGE BY FRUSTRATION S57 a) total destruction of the subject matter of the contract b) supervening events defeat the whole purpose or object of the contract c) death/personal incapacity of the parties d) govt intervention/supervening illegality D) DISCHARGE BY BREACH S 40 2 situations 1) refusal by the promisor to perform 2) disability to perform REMEDIES A) DAMAGES I) Liquidated damages ii) Nominal damages iii) Contemptuous damages iv) Exemplary/punitive damages v) Aggravated damages vi) Compensatory damages B) SPECIFIC PERFORMANCE C) INJUCTION D) QUANTUM MERUIT

BUSINESS ORGANISATION
SOLE PROPRIETORSHIP -meaning -formation -advantages -disadvantages PARTNERSHIP S3 OF PARTNERSHIP ACT Relation which subsists btw persons carrying on business in common with a view of profit ELEMENTS OF PARTNERSHIP

4) WITH A VIEW OF PROFIT There must be an intention to get profit in order to constitute a partnership SOH HOOD BENG v KHOO CHYE NEO
RULES IN DETERMINING EXISTENCE OF PARTNERSHIP THE

1) PERSON S 47 (2) of Partnership Act S 14 (3) of Companies Act -two or more person, maximum 20 2) RELATION WONG PENG YUEN v SENANYAKE 3) BUSINESS S2 Biz includes trade, occupation & profession -must be some commercial venture, selling of goods or service for reward SOH HOOD BENG v KHOO CHYE NEO Chinese loan association is not a partnership -joint venture is not a partnership as they intend to a separate business CHOOI SIEW CHEONG v LUCKY HEIGHT -preparing to carry on biz in common KEITH SPICER v MANSELL Not a partnership as not yet commence a biz in common. 4) CARRIED ON IN COMMON MOLLOWO, MARCH v COURT OF WARD To constitute a partnership the parties must have agreed to carry on biz or to share profit in some way common.

1) S4 2) INTENTION OF THE PARTIES CHOOI SOEW CHEONG v LUCKY HEIGHT AW YONG WAI CHOO v ARIEF TRADING 3) THE FACT AND CIRCUMSTANCES THAT EXIST BTW THE PARTIES GULAZAM v NOORZAMAN & SOBATH TYPES OF PARTNERS 1) 2) 3) 4) 5) General partner Active partner Dormant/sleeping partner Quasi partner Salaried partner

RELATION WITH THIRD PARTY Power to bind the firm S7 3 types of authority 1) actual authority 2) implied/usual authority 3) ostensible authority LIABILITIES 1) 2) 3) 4) 5) 6) 7) Contractual liabilities S11 Tortious liability S 12 Misapplication of prop of 3rd party S13 Improper employment of trust prop S15 Liability of persons for holding out S16 Liability of incoming partner S 19(1) Liability of retiring partner S 19 (2)

RIGHTS s 26 DUTIES OF PARTNERS S30, 31, 32 DISSOLUTIONS -by agreement -expiration or automatic dissolution 34(1)(a) -notice 34(1) (c) 34(2) -death, bankruptcy, charge on share s35 -supervening illegality s36 -court order s 37 FORMATION OF THE COMPANY S16(1) lodges MOA and AOA with registrar S18(2) subscribers sign MOA S22 reservation of name of the co S7 & 2nd Sch payment of requisite fees S16(4) Issuance of certificate of incorporation EFFECT OF INCORPORATION 1) Separate legal entity SALOMON v SALOMON 2) Ability to sue & be sued FOSS v HARBOTTLE 3) Perpetual succession RE NOEL TEDMAN 4) Ability to own land and property MAUCARA v NORTHERN ASSURANCE 5) Limited liability of members 4 debts RE APPLICATION BY YEE YUT EE DUTIES OF DIRECTOR 1) 2) 3) Fiduciary duties Duty of care and diligence Statutory duties

DISSOLUTION OR WINDING UP Voluntary winding up 1) members voluntary w/up 2) creditors voluntary w/up Compulsory w/up S 218(1) COMPARISON BTW CO & P/SHIP

1) NATURE CO: separate legal entity P/SHIP: one legal entity 2) MEMBERS CO: 2 unltd except for ltd co 50 members P/SHIP: 2-20 3) FORMATION CO: in writing MOA & AOA P/SHIP: orally /in writing 4) REGISTRATION CO: under CCM P/SHIP: under ROB 5) LIABILITY CO: limited P/SHIP: unlimited 6) DISSOLUTION CO: formal dissolution thru court P/SHIP: Informal procedure 7) TRANSFERABILITY CO: can transfer share to anybody although have restriction P/SHIP: cannot transfer w/out consent of partners