Malaysian Contract Law

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Chapter 1 , Chapter 2
JoFan Pang
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JoFan Pang
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Resumen del Recurso

Malaysian Contract Law
  1. Introduction
    1. Contracts Act 1950
      1. Illustrations
        1. Should be accepted as being of relevance and value (Mohamed Syedol Ariffin)
        2. Contracting out of the Act
          1. Can. Unless provisions expressly/impliedly prevents so. (Ooi Boon Leong)
        3. Case Law
          1. English Law
            1. Applies if not covered by CA or case law. (s3 & s5 Civil Law Act)
              1. Cautious about invoking English Law. (Tan Mooi Liang)
            2. Proposal
              1. Definite promise by promisor to be bound as soon as expressly or impliedly accepted. (s2(a) CA)
                1. Intimation of willingness by the offeror to enter into a legally binding contract as soon as expressly or impliedly accepted. (Preston Corp Sdn Bhd v Edward Leong)
                2. Can be made to individuals, class of persons, firms, companies, world at large
                  1. Complete when comes to knowledge of person to whom it's made
                    1. Auction. Bids = offer. Striking of hammer = acceptance. (M&J Frozen Food Sdn Bhd v Siland Sdn Bhd)
                    2. Acceptance
                      1. Promisee signifies assent to proposal. Proposal becomes promise. (s2(b) CA)
                        1. Must be absolute and unqualified
                          1. Must be conveyed in usual or reasonable manner, unless prescribed in proposal. (s7(b) CA)
                            1. If not conveyed as prescribed, promisor may object within reasonable time
                              1. If not objected, shall be deemed as accepted
                            2. 'Subject To Contract' (Charles Grenier Sdn Bhd v Lau Wing Hong (FC))
                              1. Not binding. Court has to construe correspondence between parties to see intention
                                1. Law leans in favour of upholding bargains.
                                  1. Phrase 'subject to S&P Agreement' does NOT automatically mean no contract exist until contract signed. Context of correspondence, object or aim of transaction and intention of parties must be read.
                                  2. Communication of Acceptance
                                    1. DEFINITION: Any act or omission of the party accepting by which he intends to communicate the acceptance and has the effect of communicating it
                                      1. Can be made in writing, orally or by conduct or by a combination of the above.
                                        1. Felthouse v Bindley: Silence does not constitute acceptance
                                          1. Offeror can waive communication
                                            1. Waiver implied in unilateral contract. ie Carlil v Carbolic Smokeballs
                                              1. s8 CA: performance of contract conditions is acceptance
                                              2. Acceptance in binding on proposer when acceptor puts acceptance so as to be out of the power of the acceptor; On the acceptor when acceptance come to the knowledge of the proposer. (s4(2) CA)
                                                1. GR: only takes effect upon communication to the proposer. (Entores Ltd v Miles Far East Corp)
                                                  1. Postal Rule: s4(2) (a) and (b) of CA - Ignatius v Bell
                                              3. Revocation and Termination
                                                1. Revocation of Acceptance
                                                  1. Must be communicated at any time before the communication of acceptance is complete against acceptor, not afterwards.
                                                  2. Revocation of Proposal
                                                    1. Rejection
                                                      1. Counter offer with terms not in original offer ends offer. (Hyde v Wrench)
                                                        1. Asking for further information not rejection. (Stevenson v McLean)
                                                        2. Lapse of time
                                                          1. s6(b) CA : Revoked by the lapse of time prescribed in proposal. If not prescribed, lapse of reasonable time.
                                                          2. Failure to fulfill a condition precedent to acceptance
                                                            1. s6(c) CA: rejected by failure of acceptor to fulfill condition precedent to acceptance. (Aberfoyle Plantations Ltd v Khaw Bian Cheng (PC) )
                                                            2. Death of a party
                                                              1. May be revoked by death or mental disorder of the proposer, if come to knowledge of acceptor before acceptance.
                                                              2. Revocation
                                                                1. s5 CA: proposal may be revoked at any time before communication of acceptance is complete against proposer, not afterwards.
                                                              3. Effective Communication
                                                                1. s4(3): Revocation effective as against the person who makes it, when it is given out of the power of the person making it. AND as against the person to whom it is made, when it comes to his knowledge.
                                                              4. Consideration
                                                                1. Definition
                                                                  1. s2(d): promisee has (or promised to) done or abstained from doing something at the promisor's desire.
                                                                    1. s26 CA: agreement without consideration is void
                                                                      1. s4(c) C(A)A 1976: notwithstanding anything in CA, scholarship agreement not void by absence of consideration
                                                                      2. Consideration need not be adequate
                                                                        1. s26 CA: Agreement not void merely because consideration inadequate. Inadequacy may be taken into account by court in determining whether consent of promisor freely given.
                                                                          1. s27(a) SRA : if consideration so grossly inadequate and there is evidence of fraud or undue advantage by plaintiff, then plaintiff cannot enforce contract.
                                                                            1. Phang Swee Kim v Beh I Hock: as long as there were some consideration, inadequacy immaterial. Unless inadequacy too great it amounted to duress or fraud.
                                                                            2. Unilateral declaration insufficient to make contract
                                                                              1. Guthrie Waugh Bhd v Malaippan Muthucumaru : Where no consideration given by promisee, promisor merely owes moral obligation to perform contract
                                                                              2. May move from third party
                                                                                1. s2(d) CA : consideration may be provided by the promisee to any other person.
                                                                                2. Past Consideration
                                                                                  1. s26(d) : a promise by the promisor to compensate the promisee for something which the promisee has already voluntearily done for the promisor ... would not be void for want of consideration.
                                                                                  2. Love and affection
                                                                                    1. Payment of lessor sum
                                                                                      1. Composition Agreement
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