law of contract-010216_094655.pptx

7/24/2019 law of contract-010216_094655.pptx

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LAW OF CONTRACT


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LECTURER: LIM ENG HOE

email. [email protected]


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FORMATION OF CONTRACT


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Contract

agreement- notenforceable by lawsocial/domesticcontract-enforceable bylawbusiness/commercial

oral

writingconduct

oer Oeree-s2(c)

oeror-s2(c)

Oer 2(a)

acceptan

ceconsideration-s2(d)

intention to treat

Capacity-

s11


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ContractContract! Act "#$%

Consent-s10

egality-s10

Certaint&!'%


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!"#$%$&$O%

' contract is an agreement

between two or more persons to door abstain from doing an act and itis intended to create a legally

binding relation 2(b) Contracts 'ct 1*+0

,wen te person to wom teproposal (oer) is made signi.esis assent tereto te proposal issaid to be accepted a proposalwen accepted becomes a


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(i!tinction: contract an) a*reement+ ,-* Contract! Act "#$%

/an a*reement not en0orcea1le 1& law i!

!ai) to 1e 2oi)3.

+ ,-h CA "#$%

/an a*reement en0orcea1le 1& law i! a

contract3.


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A contract ma& 1e ma)e:

in writin*orall&

1& con)4ct


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What con!tit4te a 2ali) contract5

A 2ali) contract m4!t ha2e 0ollowin* element!". o00er,. acce6tance

'. con!i)eration7. intention to create le*al relation$. ca6acit& o0 6er!on!8. le*al9. certain. con!ent


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What i0 )oe! not ha2e an& a1o2e

element!5

Contract i! either:

;oi)

;oi)a1le

4nen0orcea1le


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What i! an o00er< o00eror or o00eree5

+ ,-a CA "#$%

/when one 6er!on !i*ni0ie! to another hi!

willin*ne!! to )o or a1!tain 0rom )oin*

an&thin*< with a 2iew to o1tainin* the a!!ent o0

that other to the act or a1!tinence< he i! !ai) to

ma=e a 6ro6o!al -o00er3.

+ , -c CA "#$%

/the 6er!on ma=in* the 6ro6o!al i! calle) the

6romi!or -o00eror an) the 6er!on acce6tin* the

6ro6o!al i! calle) the 6romi!ee -o00eree


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O00er

M4!t 1e a1!ol4te

M4!t 1e 4n>4ali0ie)

M4!t 1e comm4nicate) to o00eree


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O00er

M4!t 1e a1!ol4te< cannot 1e 2a*4e

(e0inite 6romi!e to 1e 1o4n) 1& !6eci0ic term!

A00in Cre)it -Mala&!ia +)n ?h) 2 a6 4en F4i "#7B"ML "8#

Hel): term! o0 o00er m4!t 1e )i!clo!e) 1e0ore acce6tance can

1e *i2en to concl4)e a contract< 0ailin* which !4ch a*reement

i! 2oi).


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O00er m4!t 1e clear< )e0inite an) certainWhite 2 ?l4ett -"$' L ED '8

+on claime) 0ather a*ree) to )i!char*e him 0rom lia1ilit& in

con!i)eration o0 hi! 6romi!e to cea!e com6lainin*.

Hel): +on3! 6romi!e wa! no more than a 6romi!e not to 1orehi! 0ather an) wa! to 2a*4e to 0orm a con!i)eration

?4t in War) 2 ?&ham #$8B " WLR 7#8

Hel): 6romi!e to ma=e chil) ha66& wa! 6art o0 con!i)eration


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+ '% term! o0 a*reement m4!t 1e certain otherwi!e 2oi)

ar466an Chett& 2 +4ah Thian "#"8B

eld 'greement to grant a lease at 345+ per

mont for as long as e li6ed was 7oid foruncertainty


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M4!t 1e comm4nicate) to o00eree

Ta&lor 2 Lair) -"$8 "$8 ER ",%'

T wa! en*a*e) to wor= on L3! !hi6. He threw 46 hi! o1

14t contin4e) to hel6 on !hi6 witho4t L3! =nowle)*e.

+hi6 reache) 6ort an) he claime) rem4neration.

Hel): T co4l) not claim 1eca4!e he )i) not comm4nicatehi! o00er an) L ha) no o66ort4nit& to acce6t hi! o00er.

+ 7 -" /comm4nication o0 6ro6o!al i! com6lete when it

come! to =nowle)*e o0 6er!on to whom it i!

ma)e3.


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O00er: )i!tin*4i!h

In2itation to treat attem6t to in)4ce o00er!(i!6la& o0 *oo)!

Fi!her 2 ?ell "#8%B

harmace4tical+ociet& o0 Great ?ritain 2 ?oot! Ca!h

Chemi!t! "#$,B

A)2erti!ement

Attem6t to in)4ce o00er!

artri)*e 2 Critten)en "#8BA)2erti!ement can !ometime! 1e o00er

Carlill 2 Car1olic +mo=e ?all Co "#'B


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(i!6la& o0 *oo)!

Fi!her 2 ?ell "#8"B

( eDhi1ite) 0lic= =ni0e in hi! !ho6 win)ow. ro!ec4te)

4n)er Re!triction o0 O00en!i2e Wea6on! Act "#$#

Hel): (i!6la& o0 *oo)! in !ho6 win)ow e2en with 6rice

ta* not an o00er 0or !ale 14t an in2itation to treat.

harmace4tical +ociet& o0 G? 2 ?oot! "#$'B

La)& 6ic=e) 46 controlle) me)icine 0rom ?oot!< a !ell

!er2ice !tore. ?oot! wa! 6ro!ec4te) 4n)er harmac& an)

oi!on! Act "#''. Hel): Me)icine! on )i!6la& merel& in2itation to treat onl&

when la)& too= *oo)! to chec= o4t ca!hier !he ma)e

an o00er< which 6harmaci!t at chec= o4t co4l) re04!e.


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A)2erti!ement in2itation to treat

artri)*e 2 Critten)en "#8B

a)2erti!e) 1ram1le0iinch coc=! an) hen! 0or !ale an) wa!

char*e) 0or o00erin* 0or !ale 4n)er rotection o0 ?ir)! Act "#$7.

Hel): when a)2erti!e) he wa! ma=in* in2itation to treat an)

when C re!6on)e) he wa! ma=in* an o00er. I0 3! a)2erti!ementwa! treate) a! o00er then he wo4l) him!el0 contract4all& 1o4n)

to !466l& to all who re!6on)e).

A)2erti!ement o00er

Carlill 2 Car1olic +mo=e ?all Co "#'B


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ometimes in7itation to treat can be oer

ar7ela $n7estment td 7 3oyal &rust Co ofCanada 1*89: 'C 20;

Owner in7ited two bidders for teir sares

and stated tey would accept igest oer#irst bidder submitted .


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Oer distinguised from supply of information

ar7ey 7 #acey =18*5: 'c ++2

telegraped # , >ill you sell us ?umper all@&elegrap lowest cas price # telegraped ,owest price for ?A B*00 telegraped # ,>e

agree to buy ?A for B*00 as6ed by you

eld %o contract # merely supplying informationon lowest price acceptable $t was wo made teoer wic was ne7er accepted by #

te7enson 7 4cean (1880) + ?! 5D9eld oeree could still accept oer e7en toug e

ad telegraped to oeror reEuesting informationon credit terms because it did not destroy oer


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Ten)er

In2itation to ten)er i! *enerall& an in2itation to treatan) 1i))er3! ten)er i! an o00er

In2itation to treat attem6t to in)4ce o00er!

Harri! 2 Nic=er!on -"9'

A4ction

In2itation to treat attem6t to in)4ce o00er!

a&ne 2 Ca2e -"9#

?riti!h Car A4ction! 2 Wri*ht "#9,B


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Harri! 2 Nic=er!on -"9'

A4ctioneer a)2erti!e) to hol) a4ction. Harri! tra2elle) toa4ction !ite to 0in) item ha) 1een with)rawn. He !4e) 0or

lo!! o0 eD6en!e! 1eca4!e Nic=er!on wa! in 1reach o0

contract 0or not hol)in* !ale.

Hel): a)2erti!ement o0 a4ction an in2itation to treat toin2ite o00er!.

?riti!h Car A4ction! 2 Wri*ht "#9,B

Hel): 1i) i! an o00er an) 1ecome! a contract when

a4ctioneer acce6t! it.Now in ! 7, +ale o0 Goo)! Act "#$9


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Termination o0 o00er

+ $ -" o00er ma& 1e re2o=e) at an& time 1e0orecomm4nication o0 it! acce6tance i!

com6lete

+ 8-a 1& comm4nication o0 notice o0 re2ocation

+ 8-1 1& la6!e o0 time + 8-c 1& 0ail4re o0 o00eree to 04l0ill con)ition

6rece)ent

+ 8-) 1& )eath or mental )i!or)er o0 o00eror i0

0act o0 )eath or mental )i!or)er come! to o00eree3! =nowle)*e 1e0ore acce6tance


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Cross-oer

- two identical oers wic crossed eacoter will not

conclude a contract because eac oer ismade in

ignorant of te oter&inn 7 oman F Co (18;5) 2* & 2;1

On 28 %o7 18;1 wrote to & to sell im800 tons of

iron at 9*s per ton On same day & wrote to to buy

800 tons of iron at same price etters

crossed in


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Counter-oer

- is a purported acceptance wic does not accept all te terms and conditions of te oerG it introduces

new terms and is treated as a new oer

yde >renc (18D0) 5 ?ea7 55D

! oered to sell is land to A for B1000 but A replied to buy for B*+0 ! refused to accept A later oered

to buy for B1000 ! refused

Court eld no contract made because As counter-

oer is a reHection of ! oer wic could not later beaccepted


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'cceptance

; $n order to con7ert an oer into a contract teacceptance

; (a) must be absolute and unEuali.ed

; (b) be e


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owe7er oeror cannot prescribe silence asa manner in wic it is to be accepted

#eltouse 7 ?indley =1892: 1D2 "3 105;

# wrote to is nepew oering to buy isorse adding ,if $ ear no more about im $

sall assume orse mine at BD0 ?indleyauctioneer sold orse by mista6e tougnepew told auctioneer to e


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Con!i)eration

+ ,8 a*reement ma)e witho4t con!i)eration i! 2oi)+ ,-) /when< at )e!ire o0 o00eror< o00eree or an&

other 6er!on ha! )one or )oe! !omethin* J3

A !ort o0 1ar*ain < >4i) 6ro >4o< !omethin* )one in

ret4rn or in eDchan*e 0or !omethin*

+ ,-) a!t con!i)eration i! 2ali) con!i)eration

A)e>4ac& o0 con!i)eration

ED6lanation , o0 + ,8

Con!ent o0 o00eror i! 0reel& *i2en i! not 2oi) merel&

1eca4!e con!i)eration i! ina)e>4ate


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EDec4tor& con!i)eration

Where a contract i! ma)e in ret4rn 0or an o00er< i.e.

m4t4al eDchan*e o0 a m4t4al 6romi!e!

Ill4!tration -a ! ,7 A3! 6romi!e to !ell the ho4!e i! the

con!i)eration 0or ?3! 6romi!e to 6a& K"%


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Con!i)eration m4!t 1e law04l

+ ,7 an a*reement o0 which the o1ect or con!i)eration i! 4nlaw04l i! 2oi)

+ ,7-a it i! 0or1i))en 1& law

+ ,7-1 it wo4l) )e0eat an& law

+ ,7-c it i! 0ra4)4lent

+ ,7-) it in2ol2e! or im6lie) in4r& to the 6er!on

or 6ro6ert& o0 another

+ ,7-e co4rt re*ar)! it a! immoral or o66o!e) to

641lic 6olic&


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?ilateral contract

M4t4al eDchan*e o0 6romi!e! 1etween 6artie!

Unilateral contract

There i! onl& a 6romi!e 1& the o00eror. The o00eree

ma=e! no 6romi!e. He 6er0orm! the act to concl4)e

the contract. U!4all& an o00er 0or 6er0ormance o0 act

e.*. Carlill 2 Car1olic +mo=e ?all Co "#'B


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a!t con!i)eration

A 6romi!e i! ma)e !41!e>4ent to an) in ret4rn 0or anact that ha! alrea)& 1een 6er0orme)

+ ,8 Ill4!tration -c A 0in)! ?3! 64r!e an) *i2e! it to

her. ? 6romi!e! to 6a& A K"%%. It i! a contract

e.*.e6on* ro!6ectin* Lt) + a*athe!an Or! 2 A

E +chmi)t Maorie +chmi)t "#8$B

A*reement 1& com6an& to 6a& +chmi)t a0ter it!incor6oration i! le*all& 1in)in*


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A)e>4ac& o0 con!i)eration+ ,8 ED6lanation ,

A*reement to which con!ent o0 o00eror i! 0reel& *i2en

i! not 2oi) merel& 1eca4!e con!i)eration i! ina)e>4ate

Tho4*h ina)e>4ac& o0 con!i)eration ma& 1e ta=en

into 1& co4rt in )eterminin* whether con!ent i! 0reel&

*i2en

e.*. han* +wee im 2 ?eh I Hoc= "#87B ML ''


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EDce6tion to *eneral r4le o0 con!i)eration+ ,8 a*reement witho4t con!i)eration i! 2oi)

EDce6tion

+ ,8-a a*reement ma)e 0or nat4ral lo2e an)

a00ection with con)ition! m4!t 1e ma)e in writin*4ali0& 1& law


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Tho4*h minor< can< 6ro2i)e)0or !cholar!hi6 or !=ill trainin* -Contract!

-Amen)ment Act "#98 0ollowin* Go2t o0

Mala&!ia 2 G4rcharan +in*h Or! "#9"B0or nece!!arie! Na!h 2 Inman "#%B wai!t

coat

In!4rance In!4rance Act "#8' -Re2. "#9, can

enter into contract 0or in!4rance 1elow "8 &r! 14t

with con!ent o0 6arent!*4ar)ian


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CERTAINT

Term! o0 contract m4!t 1e certain+ '% a*reement< meanin* o0 which i! not

certain< or ca6a1le o0 1ein* certain i! 2oi)

e.*. ar466an Chett& 2 +4ah Thian "#"8B


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RI;IT OF CONTRACT

Onl& 6artie! to contract can !4e or 1e !4e)Onl& 6artie! to contract ha2e ri*ht! an)

o1li*ation! 4n)er contract.

(4nlo6 ne4matic T&re 2 +el0ri)*e "#"$BAC79

( !ol) t&re! to + with 6rice re!triction< i0 !ol)

1elow 6rice wo4l) 6a& ( $ each t&re. + !ol) to

c4!tomer 1elow re!tricte) 6rice. ( !4e) +.

Hel): ( )i) not 6ro2i)e con!i)eration to + an) (

not 6art& to contract 1etween + an) c4!tomer.


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ac=!on 2 Horion Holi)a&! Lt) B"#9$B ' All ER #,

1o4*ht holi)a& 0or 0amil&. Holi)a& 0ell !hort o0 what ha)

1een 6romi!e). claime) )ama*e! 0or all.

Hel): entitle) to claim 0or him!el0 an) 0amil&. Famil& a!

1ene0iciarie! were entitle) to the claim.

Woo)ar In2e!tment 2 Wim6e& Con!tr4ction "#%B " All ER

$9"

Woo)ar contracte) to !ell lan) to Wim6e& 0or "$%


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TERM+ OF CONTRACT

Contract contain! term! an) con)ition! a*ree) 1&

6artie! to contract

Can 1e eD6re!! or im6lie)

ED6re!! Term!The!e are term! an) con)ition! a*ree) to in

writin* or orall& 1& 6artie!

Im6lie) Term!

artie! ma& not ha2e eD6re!!l& a*ree) to the

term! an) con)ition! 14t !tat4te 6ro2i)e! 0or each

term! an) con)ition! to 1e im6lie) into contract


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e.*. +ale o0 Goo)! Act "#$9

!eller ha! ri*ht to !ell -con)ition Hire 4rcha!e Act "#89

*oo)! !hall 1e o0 merchanta1le >4alit&

C4!tom< U!a*e an) Co4rtTerm!< tho4*h not eD6re!! !ometime! im6lie)

into contract

a!t (ealin*o64lar In)4!trie! 2 Ea!tern Garment

Man40act4rin* +)n ?h) "##B


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Co4rt

Co4rt im6lie! term! into 6artie!3 contract to *i2e

04ll e00ect to 6artie!3 intention an) 14!ine!!

e00icac&

on* Un* ai 2 Entin* "#8$B

Co4rt im6lie! into contract that !ale o0 tim1er

re>4ire licence. E entitle) to re04n)


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Con)ition

maor term or e!!ence o0 contracti0 1reache)< innocent 6art& can re64)iate an)

terminate contract an) claim )ama*e!

Warrant&minor term which i! collateral to main 64r6o!e o0

contract.

i0 1reache)< innocent 6art& cannot re64)iate or

terminate contract 14t onl& !ee= )ama*e!

e.*. A!!ociate) Metal +melter! Lt) 2 Tham Cheow

Toh "#9"B


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EPEMTIONEPCLU+ION CLAU+E+

Contract ma& contain eDcl4!ion cla4!e eDem6tin*or limitin* one 6art& 0rom lia1ilit& 0or 0a4lt )one

to another 6art&

+IGNE( AGREEMENT

I0 6artie! !i*ne) contract containin* eDcl4!ion

cla4!e! then the& are 1o4n)

e.*. L3E!tran*ee 2 F3Gra4co1 Lt) "#'7B

UN+IGNE(

(e6en) whether contract4al or noncontract4al


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Contract4al

M4!t *i2e rea!ona1le notice< e.*. !i*n1oar) whichi! clear an) 4nam1i*4o4!

e.*. Thom6!on 2 Lon)on< Mi)lan) an) +cotti!h

Railwa& Co

I0 4nam1i*4o4! contra 6ro0eren)4m r4le a66lie!

Timin* o0 notice

M4!t 1e *i2en 1e0ore contract ma)e

e.*. Thornton 2 +hoe Lane ar=in* Lt) "#9"B

Olle& 2 Marl1oro4*h Co4rt Lt) "#7#B


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rior )ealin*e.*.?almain New Ferr& Co 2 Ro1ert!on "#%8B

M4!t not 1e&on) 7 corner!

e.*.Co4ncil o0 Cit& o0 +&)ne& 2 We!t "#8$BNoncontract4al

M4!t 1rin* act4al notice to other 6art&

e.*. Ca4!er 2 ?rowne "#$,B


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Le*al< 2oi) an) 2oi)a1le contract

Le*al: ! ,-h CA

;oi): ! ,-* CA

! "% 4nlaw04l o1ect or con!i)eration

! "" a*reement 1& minor< 6er!on o0 4n!o4n) min)

! ," a*reement entere) into 4n)er mi!ta=e

!,8 witho4t con!i)eration

! '% a*reement meanin* o0 which i! 4ncertain

;oi)a1le: ! ,-i

! "$ coercion ! "8 4n)4e in0l4ence

! "9 0ra4)

! " mi!re6re!entation


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;OI(A?LE CONTRACT

+ ,-i an a*reement which i! en0orcea1le 1& law

at o6tion o0 one 14t not at o6tion o0 the other i! a

2oi)a1le contract

+ "% all a*reement! are contract! i0 the& are ma)e

1& 0ree con!ent o0 6artie! com6etent to contract 0or alaw04l con!i)eration an) with a law04l 64r6o!e are

not 2oi)

+ "#-" when con!ent to a*reement i! ca4!e) 1&coercion< 0ra4)< or mi!re6re!entation< a*reement i! a

contract 2oi)a1le at o6tion o0 6art& who!e con!ent

wa! !o ca4!e)


56/66

+ "#-, a 6art& to a contract who!e con!ent wa!ca4!e) 1& 0ra4) or mi!re6re!entation ma&< i0 he

thin=! 0it< in!i!t that contract !hall 1e 6er0orme)

an) he !hall 1e 64t in 6o!ition in which he wo4l)

ha2e 1een a! i0 re6re!entation wa! tr4ee.*. A inten)in* to )ecei2e ?< 0al!el& re6re!ent!

hi! com6an& wa! ma=in* RM$ M a &ear an)

here1& in)4ce! ? to 14& com6an&. Contract i!2oi)a1le at o6tion o0 ?


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EDce6tion

I0 con!ent i! ca4!e) 1& mi!re6re!entation or 1&!ilence or 1& 0ra4)4lent act within ! "9 contract i!

not 2oi)a1le i0 6art& who!e con!ent i! !o ca4!e)

ha! meanin* o0 )i!co2erin* tr4th with or)inar&

)ili*ence

e.*. A< 1& mi!re6re!entation o0 ?< lea)! ?

erroneo4!l& to 1elie2e hi! com6an& i! ma=in*

RM$ M a &ear. ? eDamine! acco4nt an) )i!co2er!com6an& i! onl& ma=in* RM7 M a &ear. ? 1o4*ht

com6an&. Contract i! not 2oi)a1le


58/66

Where contract i! 2oi)a1le a**rie2e) 6art& ha!

ri*ht to either contin4e with contract or re64)iate it

+ "7 con!ent i! !ai) to 1e 0ree when not ca4!e)

1&:

+ "$ coercion commit or threaten to commit

an& act 0or1i))en 1& law or 4nlaw04l )etainin* orthreaten to )etain an& 6ro6ert& to 6re4)ice o0 an&

6er!on

+ "8 4n)4e in0l4ence 6er!on in 6o!ition to)ominate will o0 the other 4!e that 6o!ition to

o1tain 4n0air a)2anta*e


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+ "9 0ra4) inten) to )ecei2e another 6er!on or

to in)4ce another to enter into contract

+ " mi!re6re!entation

-a 6o!iti2e a!!ertion which i! not tr4e 1&

6er!on tho4*h he 1elie2e! to 1e tr4e

-1 an& 1reach o0 )4t&< witho4t intention to

)ecei2e *i2e! an a)2anta*e to 6er!on committin*

it

-c ca4!in* howe2er innocentl& 6art& toa*reement to ma=e mi!ta=e a! to !41!tance o0

thin*


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(I+CHARGE OF CONTRACT

". 1& 6er0ormance

artie! ha2e 6er0orme) their o1li*ation! 4n)er the

contract

+ 7% i0 a 6art& re04!e! to 6er0orm or )i!a1le)

him!el0 0rom 6er0ormin* the other 6art& can 64t en)to contract

,. 1& a*reement

artie! ma& con!ent to m4t4all& a*ree to en)contract

+ 8' ! 87 6ro2i)e 0or to en) contract 1& con!ent


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'. 1& 0r4!tration

+ $9 -, contract 1ecome! im6o!!i1le or ille*al to

6er0orm !41!e>4ent to the ma=in* 1ecome! 2oi)4ita1le reme)&

In4nction i! an or)er 1& co4rt to )e0a4ltin* 6art&to !to6 )oin* an act

+6eci0ic 6er0ormance i! an or)er 1& co4rt to

)e0a4ltin* 6art& to 6er0orm contract a! a*ree)

+ "-" +6eci0ic Relie0 Act "#$% !tate! when

co4rt ma& *rant !6eci0ic 6er0ormance

Miti*ation

art& not in 1reach m4!t miti*ate hi! lo!!

law of contract-010216_094655.pptx

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