Law of Contract (S.2 Contract Act 1950) terbahagi pada beberapa bahagian iaitu :-
Proposal and Acceptance :-
1) Proposal (S.2 (a) CA 1950) and Acceptance (S.2 (b) CA 1950) = Agreement
Setiap perkara mesti ada "proposal" terlebih dahulu. "Proposal" bleh datang dalam berbagai bentuk iaitu barang2 yang dipamerkan di rak supermarket, tawaran yang dikeluarkan atas satu2 barang, label yang diletakkan pada barang tersebut dengan maksud untuk menjualnya dan apa sahaja dgn niat untuk menjual barang tersebut.
Jika kita sebagai pembeli, faham akan maksud tersebut diatas, dan kita mengambil barang tersebut... ini bermaksud kita menerima dan kita bersedia untuk membelinya. Kita dgn ini dianggap telah melengkapkan rantaian ini dgn menerima tawaran yang telah diberi. Setiap penerimaan untuk membeli mestilah tertakluk pada syarat2 yang telah dipersetujui. Penerimaan tawaran juga tertakluk pada masa yang diberikan atau jika tidak ditetapkan masa, anggap la ianya tertakluk pada masa yang wajar (iaitu tidak lah terlalu lama sehingga memudaratkan). Tapi dalam cerita supermarket di atas, walaupun tawaran dibuat (invitation to treat) di rak barang yang dipamerkan, ianya lengkap jika kita membayar barang tersebut di kaunter pembayaran.
Dalam sub topik ini juga terdapat "Counter-Offer" atau keadaan dimana kita tawar menawar, kita cuba untuk berbincang dgn memberi satu harga baru untuk membeli satu barang yang telah ditawarkan kepada kita pada mulanya. Pada keadaan ini, keadaan telah berubah dimana pembeli sudah menjadi penawar harga dan sebaliknya. Tidak kira sama ada dalam perbincangan atau pun pembeli dalam proses untuk mendapatkan info tentang produk yang hendak di beli. Tapi selagi tiada persetujuan dari kedua-dua belah pihak berkenaan dgn harga baru, "There will be no valid contract".
Proposal and Acceptance :-
1) Proposal (S.2 (a) CA 1950) and Acceptance (S.2 (b) CA 1950) = Agreement
Setiap perkara mesti ada "proposal" terlebih dahulu. "Proposal" bleh datang dalam berbagai bentuk iaitu barang2 yang dipamerkan di rak supermarket, tawaran yang dikeluarkan atas satu2 barang, label yang diletakkan pada barang tersebut dengan maksud untuk menjualnya dan apa sahaja dgn niat untuk menjual barang tersebut.
Jika kita sebagai pembeli, faham akan maksud tersebut diatas, dan kita mengambil barang tersebut... ini bermaksud kita menerima dan kita bersedia untuk membelinya. Kita dgn ini dianggap telah melengkapkan rantaian ini dgn menerima tawaran yang telah diberi. Setiap penerimaan untuk membeli mestilah tertakluk pada syarat2 yang telah dipersetujui. Penerimaan tawaran juga tertakluk pada masa yang diberikan atau jika tidak ditetapkan masa, anggap la ianya tertakluk pada masa yang wajar (iaitu tidak lah terlalu lama sehingga memudaratkan). Tapi dalam cerita supermarket di atas, walaupun tawaran dibuat (invitation to treat) di rak barang yang dipamerkan, ianya lengkap jika kita membayar barang tersebut di kaunter pembayaran.
Dalam sub topik ini juga terdapat "Counter-Offer" atau keadaan dimana kita tawar menawar, kita cuba untuk berbincang dgn memberi satu harga baru untuk membeli satu barang yang telah ditawarkan kepada kita pada mulanya. Pada keadaan ini, keadaan telah berubah dimana pembeli sudah menjadi penawar harga dan sebaliknya. Tidak kira sama ada dalam perbincangan atau pun pembeli dalam proses untuk mendapatkan info tentang produk yang hendak di beli. Tapi selagi tiada persetujuan dari kedua-dua belah pihak berkenaan dgn harga baru, "There will be no valid contract".
Acceptance can also be governing using postal. Ini bermaksud jika tawaran dibuat dgn menghantar surat kepada pembeli dgn syarat bahawa jika menerima tawaran yang telah dibuat kita perlu menghantar jawapan sebelum tarikh tutup dan ianya berlaku, walaupun surat itu lambat sampai ianya dianggap penerimaan dan persetujuan untuk membeli telah berlaku. Tarikh pos menjawab surat itu akan dijadikan sebagai bukti persetujuan pembelian.
Consideration (S.26 CA 1950) :-
Agreement made without consideration is void.
Classification of consideration :-
1. Past consideration = Promise to pay some amount after the work done and it must be voluntery.
2. Executed consideration = the work that has already done
3. Executory consideration = Promise to pay
Rules of consideration:-
1. Consideration must be legal.
2. Consideration can move to third party.
3. Consideration must be sufficient but need not to be adequate.
4. Consideration must have some value.
5. Consideration must be clear.
6. Consideration must be possible of performance.
An exception to Consideration :- An agreement of Consideration still valid and not void.
1. An agreement of an account to natural love and affection (like father to son) and must be registered and in writing.
2. An agreement to compensate to past voluntarily act.
3. An agreement to compensate to an act the promisor was legally compellable to do so.
4. An agreement to pay Statute-barred debt.
Intention to Create Legal Relations :-
1. in business agreement - an agreement to be legally enforceable unless proven otherwise.
2. in domestic agreement - in social, domestic and family agreement.
Certainty :-
An agreement, the meaning which is not certain, or capable of being certain made certain, are void. Which means an agreement must put an arguement like time (how long to rent the house? 1 years?) how many kilo to sell the fresh meat. If not the agreement was void.
Formalities :-
All agreements can be made either orally or in writing or by conduct. But there still an exceptions to this law where there must be a writing agreement in (S.10 CA 1950) for Hire and Purchase Agreement (S.5(1) HPA Act), for Natural love and affection (S.26(a) CA 1950) and for statute barred debt (S.26(c) CA 1950).
Capacity :-
Contract must be entered into by person who has full capacity to do so.
S.11 CA 1950 - Any person is competent to contract if he attained the age of majority(AOM Act 1971), sound mind and not disqualified from contracting by any law.
Minor = is age under 18, all contract entered into by minor are void.
Unsound mind :-
S.12 CA 1950 - person is said to be unsound mind due to sickness, alcohol and drugs.
S.12(1) CA 1950 - Contract can be make when a person at the time is capable to understand and forming rational judgement.
S.12(2) CA 1950 - Person who is unsound mind, but occasionally sound mind, can make contract when he is sound mind.
S.12(3) CA 1950 - Person who is sound mind, but occasionall unsound mind, may not make a contract when he is unsound mind. EFFECT OF CONTRACT will be UNCERTAINTY.
Exceptions on Capacity :-
1. Contract for necessity
2. Scholarship
3. Insurance.
4. Apprenticeship
5. matter related to marriage, divorce, dower and adoptions.
6. under false misrepresentation.
Free Consent :-
Agreement are contract if they are made by the free consent or parties.
S.14 CA 1950 - consent is said to be free when it is not caused by :-
1. Coercion. (S.15 CA 1950)
2. Undue Influence. (S.16 CA 1950)
3. Fraud. (S.17 CA 1950)
4. Misrepresentation. (S.18 CA 1950)
5. Mistake. (S.21, 22, 23 CA 1950)
Discharge of Contract :-
Contract is terminated and contracting parties are free from further obligations arising from it.
1. Discharge by Performance.
2. Discharge by Agreement.
3. Discharge by Impossibility / Frustration.
4. Discharge by Breach.
Remedies :-
There are common remedies for breach of contract :-
1. Damages
1.1 Liquidated
1.2 Nominal - A small token award where plaintiff has proved a breach of contractual right but suffer no actual loss.
1.3 Contemptuous
1.4 Exemplary / punitive - A sum awarded which is far greater than the actual pecuniary loss suffered by plaintiff.
1.5 Aggravated
1.6 Compensatory
2. Specific Performance
3. Injuction
4. Quantum Meruit - Paid as much as he earn.
5. Rescission - revoke
Consideration (S.26 CA 1950) :-
Agreement made without consideration is void.
Classification of consideration :-
1. Past consideration = Promise to pay some amount after the work done and it must be voluntery.
2. Executed consideration = the work that has already done
3. Executory consideration = Promise to pay
Rules of consideration:-
1. Consideration must be legal.
2. Consideration can move to third party.
3. Consideration must be sufficient but need not to be adequate.
4. Consideration must have some value.
5. Consideration must be clear.
6. Consideration must be possible of performance.
An exception to Consideration :- An agreement of Consideration still valid and not void.
1. An agreement of an account to natural love and affection (like father to son) and must be registered and in writing.
2. An agreement to compensate to past voluntarily act.
3. An agreement to compensate to an act the promisor was legally compellable to do so.
4. An agreement to pay Statute-barred debt.
Intention to Create Legal Relations :-
1. in business agreement - an agreement to be legally enforceable unless proven otherwise.
2. in domestic agreement - in social, domestic and family agreement.
Certainty :-
An agreement, the meaning which is not certain, or capable of being certain made certain, are void. Which means an agreement must put an arguement like time (how long to rent the house? 1 years?) how many kilo to sell the fresh meat. If not the agreement was void.
Formalities :-
All agreements can be made either orally or in writing or by conduct. But there still an exceptions to this law where there must be a writing agreement in (S.10 CA 1950) for Hire and Purchase Agreement (S.5(1) HPA Act), for Natural love and affection (S.26(a) CA 1950) and for statute barred debt (S.26(c) CA 1950).
Capacity :-
Contract must be entered into by person who has full capacity to do so.
S.11 CA 1950 - Any person is competent to contract if he attained the age of majority(AOM Act 1971), sound mind and not disqualified from contracting by any law.
Minor = is age under 18, all contract entered into by minor are void.
Unsound mind :-
S.12 CA 1950 - person is said to be unsound mind due to sickness, alcohol and drugs.
S.12(1) CA 1950 - Contract can be make when a person at the time is capable to understand and forming rational judgement.
S.12(2) CA 1950 - Person who is unsound mind, but occasionally sound mind, can make contract when he is sound mind.
S.12(3) CA 1950 - Person who is sound mind, but occasionall unsound mind, may not make a contract when he is unsound mind. EFFECT OF CONTRACT will be UNCERTAINTY.
Exceptions on Capacity :-
1. Contract for necessity
2. Scholarship
3. Insurance.
4. Apprenticeship
5. matter related to marriage, divorce, dower and adoptions.
6. under false misrepresentation.
Free Consent :-
Agreement are contract if they are made by the free consent or parties.
S.14 CA 1950 - consent is said to be free when it is not caused by :-
1. Coercion. (S.15 CA 1950)
2. Undue Influence. (S.16 CA 1950)
3. Fraud. (S.17 CA 1950)
4. Misrepresentation. (S.18 CA 1950)
5. Mistake. (S.21, 22, 23 CA 1950)
Discharge of Contract :-
Contract is terminated and contracting parties are free from further obligations arising from it.
1. Discharge by Performance.
2. Discharge by Agreement.
3. Discharge by Impossibility / Frustration.
4. Discharge by Breach.
Remedies :-
There are common remedies for breach of contract :-
1. Damages
1.1 Liquidated
1.2 Nominal - A small token award where plaintiff has proved a breach of contractual right but suffer no actual loss.
1.3 Contemptuous
1.4 Exemplary / punitive - A sum awarded which is far greater than the actual pecuniary loss suffered by plaintiff.
1.5 Aggravated
1.6 Compensatory
2. Specific Performance
3. Injuction
4. Quantum Meruit - Paid as much as he earn.
5. Rescission - revoke
