Negligent Misstatement
Introduction
It is imperative to determine whether or not the relationship between Investment Bhd (the Company) and A Bank Bhd (the Bank) is bound as a contract. Forming a legally binding agreement, or a contract, requires four elements; an offer, the acceptance of that offer, the intention to be legally bound, as well as consideration. Referring to the case of Affin Credit (Malaysia) Sdn Bhd v Yap Yuen Fui, the lack of an offer and acceptance will cause an agreement to be declared void from the beginning. In this particular case, although there was a valid offer and the intention of both parties to be legally bound, neither an absolute acceptance nor consideration had passed between the Bank and the Company. A contract is made up of all four of these basic elements; the omission of even one element would render it incomplete and invalid. Therefore, it can be first hypothesised that there existed no contract between the Company and the Bank.
So, is the Bank liable for breaching a contract? To advise the Company on its possible course of action, the following elements must be satisfied in order to succeed in suing the Bank. Firstly, it must show that the Bank has made it an offer. Then the Company must prove that it has accepted this offer. Subsequently, it must prove that there was an intention by both parties to be legally bound. Finally it must prove that good consideration was given in this agreement.
Offer
On the 11th of August, 2011 the Bank (defendant) offered the Company (plaintiff) two banking facilities. According to Section 2(a) of the Contracts Act 1950, when one person signifies to another his willingness to do or to abstrain from doing anything, with a view to abtaining the assent of that other to the act or abstinence, he said to make a proposal. Based on this offer, the defendant was willing to make a contract with the plaintiff with the intention that it shall become binding to the offeror as soon as it is accepted by the offeree.
Based on the
It is imperative to determine whether or not the relationship between Investment Bhd (the Company) and A Bank Bhd (the Bank) is bound as a contract. Forming a legally binding agreement, or a contract, requires four elements; an offer, the acceptance of that offer, the intention to be legally bound, as well as consideration. Referring to the case of Affin Credit (Malaysia) Sdn Bhd v Yap Yuen Fui, the lack of an offer and acceptance will cause an agreement to be declared void from the beginning. In this particular case, although there was a valid offer and the intention of both parties to be legally bound, neither an absolute acceptance nor consideration had passed between the Bank and the Company. A contract is made up of all four of these basic elements; the omission of even one element would render it incomplete and invalid. Therefore, it can be first hypothesised that there existed no contract between the Company and the Bank.
So, is the Bank liable for breaching a contract? To advise the Company on its possible course of action, the following elements must be satisfied in order to succeed in suing the Bank. Firstly, it must show that the Bank has made it an offer. Then the Company must prove that it has accepted this offer. Subsequently, it must prove that there was an intention by both parties to be legally bound. Finally it must prove that good consideration was given in this agreement.
Offer
On the 11th of August, 2011 the Bank (defendant) offered the Company (plaintiff) two banking facilities. According to Section 2(a) of the Contracts Act 1950, when one person signifies to another his willingness to do or to abstrain from doing anything, with a view to abtaining the assent of that other to the act or abstinence, he said to make a proposal. Based on this offer, the defendant was willing to make a contract with the plaintiff with the intention that it shall become binding to the offeror as soon as it is accepted by the offeree.
Based on the
Bibliography: Affin Credit (Malaysia) Sdn Bhd v Yap Yuen Fui (1984) 1 MLJ 169 Aspen Insurance UK Limited and Others v Pectel Limited (2008) EWHC 2804 (Comm) Carlill v Carbolic Smoke Ball Co. Ltd. (1893) 1 QB 256 Edwards v Skyways (1964) 1 WLR 349 Hyde v Wrench (1840) 3 Bea 334; 49 ER 132 Lau Brothers & Co v China Pacific Navigation Co Ltd (1965) 1 MLJ 1 Ramsgate Victoria Hotel v Montefiore (1866) LR 1 Ex 109 Wong Hon Leong David v Noorazman bin Adnan (1995) 4 CLJ 155 [ 2 ]. (1893) 1 QB 256 [ 3 ] [ 4 ]. (1965) 1 MLJ 1 [ 5 ] [ 6 ]. (1964) 1 WLR 349 [ 7 ] [ 8 ]. (2008) EWHC 2804 (Comm)