Consideration (Malaysia Law)
In English law if other than the promisee provide consideration, then the promise could not be enforce by the law. This problem usually may arise when third party involve. For example in the case of Price v Easton (1833), In this case X are doing work for Easton and Easton make a contract with X. In return for X services Easton would pay a price of $19 to Price. The work was done by X but Easton didn’t make any payment to Price and Price sue Easton. Court held that Price claim failed as he didn’t make any consideration.
However under the Malaysia law third party of promise are allowed to provide consideration. Section 2(d) of contract Act 1950 define consideration as “when at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something such act or abstinence or promise is called a consideration for the promise”.
For example in the case of Kerpa Singh v Bariam Singh [1966], The defendant own RM8,869.94. In order to settle the debt the defendant son offer a cheque to plaintiff RM4,000 in full settlement for his father debt. The plaintiffs cash the cheque and demand for the balance of the debt. The federal court ruled that as the plaintiff cash the cheque. It is consider that the plaintiff has acceptance the defendant son offer in full satisfaction preclude the plaintiff to claim the balance of the debt.
This means that, for an agreement to be binding the both party, consideration must be take place before the construction of the agreement. In the case of Guthrie Waugh Bhd v Malaippan Muthucumaru the court held that as far as the defendant was concerned, the deed was executed by him neither for any past consideration, nor in respect of forbearance to sue him for the supplies made to the estates, nor in consideration of any promise to supply him goods on credit in future. Therefore, there was no cause of action as the claim based on deed
However under the Malaysia law third party of promise are allowed to provide consideration. Section 2(d) of contract Act 1950 define consideration as “when at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something such act or abstinence or promise is called a consideration for the promise”.
For example in the case of Kerpa Singh v Bariam Singh [1966], The defendant own RM8,869.94. In order to settle the debt the defendant son offer a cheque to plaintiff RM4,000 in full settlement for his father debt. The plaintiffs cash the cheque and demand for the balance of the debt. The federal court ruled that as the plaintiff cash the cheque. It is consider that the plaintiff has acceptance the defendant son offer in full satisfaction preclude the plaintiff to claim the balance of the debt.
This means that, for an agreement to be binding the both party, consideration must be take place before the construction of the agreement. In the case of Guthrie Waugh Bhd v Malaippan Muthucumaru the court held that as far as the defendant was concerned, the deed was executed by him neither for any past consideration, nor in respect of forbearance to sue him for the supplies made to the estates, nor in consideration of any promise to supply him goods on credit in future. Therefore, there was no cause of action as the claim based on deed