Law of Contract Study Guide

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LAW OF CONTRACT (1)
LAW 436

LAW OF CONTRACT

Definition of a contract :
>Section 2(h) Contract Act 1950
“an agreement enforceable by law is a contract”

ELEMENTS OF A VALID CONTRACT

Elements required for the formation of a contract

1. Proposal
2. Acceptance
3. Consideration
4. Intention
5. Capacity
6. Free Consent

1. PROPOSAL

1. Definition
>Section 2 (a) Contracts Act 1950

“when one person signifies to another his willingness to do or abstain from doing anything with a view to obtaining the assent of that other to the act or abstinence, he is said to make a proposal”

➢ Preston Corp Sdn Bhd v. YEdward Leong & Ors [1982] 2MLJ 22 FC ➢ Gibson v. Manchester City Council [1979] 1 All ER 972 ➢ Affin Credit (M’sia) Sdn Bhd v Yap Yuen Fui [1984] 1 MLJ 169 FC

2. Features of a valid proposal

➢ The form of proposal
➢ Section 9 Contracts Act 1950

“so far as proposal is made in words, the promise is said to be express…,otherwise in words, the promise is said to be implied.

➢ The proposal must be clear and certain
➢ Sou Yong v. Yuzin bte Abdullah @ Ho Yuzin [1999] 5 MLJ 696 LAW OF CONTRACT (1)
LAW 436

TUTOR
PUAN RAHIMAH BEE MOHD YUSOF
FACULTY OF LAW.UiTM SHAH ALAM

➢ The proposal and acceptance must correspond
➢ Meeting of minds- consensus ad idem
➢ Raffles v. Wichelhaus(1864) H & C 906

➢ The proposal must be communicated
➢ Section 3 & 4 Contracts Act 1950
➢ Must be made known to the offeree/ must have knowledge ➢ Carlill v. Carbolic Smoke Ball [1893] 1QB 256
➢ R v. Clarke (1927) 40 CLR 227

>>The proposal must be distinguished from an invitation to treat

Preliminary negotiations
>Harvey v. Facey [1893] AC 552

Goods on display
>Pharmaceutical Society of Great Britain v. Boots Cash Chemists

Advertisement
➢ Partridge v. Crittenden
➢ Coelho v. The Public Services Commission
➢ Eckhardt Marine GMBH v Sheriff, High Court of Malaya, Seremban & Ors [2001] 4 MLJ 49 CA

Auctions
➢ Paynev. Cave
➢ Harris v. Nickerson
➢ M & J Frozen Food Sdn Bhd v. Siland Sdn Bhd [1994] 1 MLJ 303

> Revocation of Proposal

> Section 5 & 6 Contracts Act 1950
> Routledge v. Grant(1828)

➢ Section 6 Contracts Act 1950
➢ 6(a) – By Notice of revocation
➢ 6(b)- By Lapse of time
➢ 6(c)- By failure of condition precedent
➢ 6(d)- By death or mental disorder of offeror

LAW OF CONTRACT (1)
LAW 436

TUTOR
PUAN RAHIMAH BEE MOHD YUSOF
FACULTY OF LAW.UiTM SHAH ALAM

2. ACCEPTANCE

1. Definition

➢ Sec 2(b) Contracts Act 1950

“ when the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted, a proposal when accepted, becomes a promise”.

2. Method of acceptance

There must be proper acceptance of an offer. Before there is acceptance in law, there must be both the fact of acceptance as well as communication of the acceptance

➢ Section 3, Section 7 (b), Section 8
➢ Section 7 (b),
➢ Acceptance must be expressed in some usual and reasonable manner Unless the proposal prescribe the manner in which it is to be accepted.

Eg. Asia Corp Ltd v. ST Ramakrishnan [1949] MLJ 206

➢ Acceptance must be made within a reasonable time ➢ Sec 6 (b)

➢ Acceptance must be a positive act
➢ Felthouse v. Bindley
➢...
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