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A STUDENT MAT{UAL
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ERNIE MELINI MOHD JA,VIARUDI JUSNIZA JAMAL
sYAFrNr MUDA @ YUSCF NOORIMAH MISNAN
(r
NTERNAL
Cr
RCULATION ONLY)
HNTRODT]CTIOl\ K'A MALAYSIAhI H,EGAL SYSTEM
D-EFINITION OF LAW n Rule ofconduct oxford Dictionary " Body community as binding,';L6o,,'
of
cnacted
or
customary mlcs rccognized
Salmond "Body of pri.nciples recognized and applied by the state adrninistration of justice,'
*'.H;*
by
in
a
the
command set by a superior being to an inferior being ancr enforcecl by
on thc whole, raw is a systcm of
rules designed to ensurc that pcoplc peace and hannony. It inclucles rights, duties and obligations.
CLASSIFICATION OF LAW
*
livc in
Foctrs
Law can be classified as follows:
)ffi
*/
utnolrrvl
(.olc
r"*,-ro.iri
criminal kinds of conduct that are.unluwrrr or charged and convicted
erivite ru'u'
;;;
$T:.rl*:,;;
fr"rriti
will be sentencej;;;; "o
i;;
uv trr" rtut"'rra
t;;;;;';"#,,J":'i:r?'#:,"-"r",:''xrilv clr*xcrzasrr,^c{''ti,:Tr}1ry}i,tt,:r?T"",11;}i?iifi .?:fi For example' if there is a breach'ot .ont.*t. the plaintiff
"
person
obrigatio,
;=',tiit_:l*nfl
damages, or restriction of the
H#*:' '/
*,ur,",^
*,r(
F
sv
co,rt of Justice
;lTffi#ii;:.,
givil 1rtn.rt
could clairn fbr
contrr.,
".."rilgf
i,
i**.***,"..,irffi"i,;r
"Internationai law" is defined."16r**-u"i.'."-r, ortion, or States) Among the
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il:: ;T.,f;:':::,r,::*l*l;:n;:r:t
i*rs'
J,li d';; hear cases of disputes berween ori p.,iuu Sipadan, u"*"., urlaysia
at Ha-eu! has treen."; exampie dispute
,*
and Criminal Law
lawlii'lFia=* rerating ro (transactions and underlakings among individuals)tci,il raw covers turJor.J'rrt act, to.{, family iu*, tuna, company i, Ji.rute courd resorve their matters out of courl l:;";:f::.:?,-y:::?3_,1i1i by way of negoriation, ,ruit atio"" or concliarion. By ;:,TJ:[J]::iri,l proceed to take the disp,te to the couJs and seek r",
d 61 civil
'/
itt*ur h ,
court orders such as injunction, ""*ir""ration or obtain prohibitron or declaration. criminat raw involve;di;;. rhe stare u,ilrr" individuals) aims of criminal raw it to p"oirr, [he trr.'orr"nders or them.)Among tlre statutes on criminar law are irr" p"ror code, the cri-irul Dangero,s Drugs Act 1952, criminar procedure code 1935 a-"rg the sentence provided are fine, imprisonmert, *t ippirg and "..
i;;;i;i;g
..*;ii;";"
death penalty.
lnJ.*.].ct
E*d &rrL SOURCES OF
LAW
+ Focus
*s*&Vlg Wri
en la'w
=
- enacl-ed bJ Frriqre'\ f /
O'O' ffiuu4
I
hdunrnritten taw -
x e.(rocj'-t*
Heid: Acivertisement lbr rervard was an offer to the *,,hole rvorlcl. Mrs Carlill haci accepte cl by her condr:ct rvhen she used the medicine according to the instructions. Thereiore, there rvas a valid contract and she entitled to the money.
.
Price List/Quotation PRESTON CORPORATION SDN BHD V EDWARD LEONG & OTHERS The Appellant (publishers) asked for quotations from the Respondent (printers). The Respondent gave the quotations to the Appellant. The Appellant then made some printing orders based on the quotation. Held: The quotations r.r,ere only a supply of information which was an invitation to treat. The printin-g orders made by the Appellant rvere offers rvhich was subject to the acceptance by the Respondent.
o
Auction/Auctioneer InvitingBids S.10 Ar.rction Sales Act: I sale by publi.c ctttction shall be contplete when the auctioneer onnounces its completion by thefall o-f the hornnter..
Tvpes of Proposal/OlI'er a) Specific Offer . The offer is addressed to a specific/parlicular person (addressee). " Only addressee may accept the offer.
b)
Ceneral Offer . The offer is aclciressed generally to flnyone rvho may satisfy all the terms ancl couditions o[ the o[[er. . Anyone who mccts all the terms of the offer is considered as making the acccptance.
CARLILL v CARBOLIC SMOKE BALL COMPANY Defendant adverlised that they would reward 100 pounds sterling to an,vone rvho rvould stil1 suffer influenza after using their product, on condition that the buyer would use it according to the instructions The plaintiff bought and used the product accordrng to the instructions but nevertheless, still suffering influenza. Plaintiff claimed the monel- but the defendant refused to pay on the ground that the offer u-as not addressed to the plainti[t'. Held: The plaintiff is entitled to the money. The offer rvas unilateral ofter addressed to the general public at large. Anyone rr'ho read and iiilt-r1s the conditions is regarded as making an acceptance.
eommunication of
, .
fr
Proposal tnust be communicated
S.4(1) CA The corumunication ot''a proposoL is conrplete v'hett it conres tct the Iqp.l_q'lg" oJ" tlte person to whom it is nrocle. R v CLARKE Australian Govemrlent offered a rervard for information leading to the anest and conviction of persons responsible for the murder of trvo police officet's. Mr. X ancl Ciarke were arrested and Clark gave information leading to the arrest of 1.7
Mr.y. X
ancl
Y rvere convicteci. Later, Clark knerv about the relvitrd and claiined
for it. Held: Clarke was not aware of the reward at the time he gave the information' He was mereiy acting to clear and reiease himself' Therefore. Clark's claim failed' Revocation of Proposal/Offer
Revocation means cancellation
or
termination. Contracts Act provides four
situations where a proposal is revoked:
i. By communication of notice of revocation b-v the proposer to the other party/offeree: S.6(a) CA.
.
The offeror/proposer may revoke his offer by giving notice of his intention to revoke.
. ii.
S.5(1) CA: A proposal may be revoked at any time before acceptance"
By lapqe of time: S:6(b) CA: . The acceptance must be macle within the given time. If no time given, withrn reasonable
time.
*d
RAMSGATE VICTORIA HOTEL v NIONTEFIORE In June, M made an offer to the company to buy-its shares. The company only accepted the offer on November. M refused to buy the shares for lapse of time. Held: The offer could be teminated bir the ofJ-eror' The period between June and November was llnreasonable.
iii.
By failure of the acceptor to fulfil a condition precedent to
acceptance:
5.6(c) CA. . The offeree must accept the offer according to the terms in the offer.
FINANCING LTD V STINISON The defendant offered to buy a cgr .on hire-purchase terms from the plaintiffs company. There was a condition that the contract was to become tindirrg only upon acceptance by the plaintiff provided that the car remains in the iame good condition. However before the plaintiff accepted the offer, the car was stolen and was subscquently recovcred in a damagcd condition. Held: The defendant's offer was only able to be accepted if the car remained in the same conditionas it was when the offer rvas made. Since this condition was not fuIfilled, the offer had terminated.
iv.
By death or mental disorder of the proposer: S'6(d) CA' . Death or mental disorder of the offeror may revoke the otTer' . However, ihe offer is only revoked if the offeree aware of the fact that the offeror is deacl or mentally disordered before he makes any acceptance. BRADBURY V MORGAN Held: The death of the off'eror will not temrinate the off-er if the acceptance has been made in ignorance of his death.
1B
{,ft'4d
.\CCEPTANCE Definition S.2(b) CA. I4/hen the person to whorn tlte proposal is ruacle sigtti/ies his ttssent thereto, the proposal is said to be qgggplgSL S.2(c) CA: The person accepting the proposal is called the promisee. The person r.vho receives the offer is also called the offeree, acceptor or promisee. Conditions of an Acceptance 1. Acceptance must be made absolute and/rnqualifiedl S.7(a) CA. . Acceptance must be made exactly on tifrSEid1iln of the offer, without any modification. Any modification or attempt to accept a proposal on a new tetm not containcd in proposal is ca11ed corlnter proposal/counter oft'er. Counter proposal/countel ofler is trealed as a rejection of the original offer, thercfole no valid acccptance exists. HYDE T WRENCH The defendant offered to sell his estate to the plaintiff for 1000 porrnds. The plaintiff made a counter proposal to purchase ut€_!oqn9.L Defendant refused. After that, the plaintiff rvrote again that he was prepared to pay 1000 pounds.
Held: The plaintiff had rejected the original proposal of 1000 pounds by the counter proposal of950 pounds. Therefbrc no conttact. must be made within specilied time or reasottable time If the ofl-eror stipulate time ior an acceptance, it must bc made rvithin t1-re time
2. Acceptance
.
given.
lf
not, within reasonable time
must be communicated or eipressed in some usttal manlter: s.7(b) cA. n The communication of acceptance macle by the offeree mltst come to the knou'leclge of the offeror. o Communication of acceptance tnust be usual and rcasonable. unlcss the ploposal prescribes the manner in which it is to be accepted. However, proposer cannot prescribe silence as a manner of acceptance.
3. Acceptance
FRASER v AVERETT Held: There was no rule of law saying that siience gives consent applicable to mercantile contract.
FELTHOUSE v BINDLEY The uncle made an offer to buy his nepherv's horse. He u'rote to his nepheu'. "if Ihear no more about him, I shall consider the horse is mine". The nepherv made no reply. When the horse lvas sold to the other persor.l, the uncle brought a legal action to enforce his rights against the horse,
Held: Acceptance could not be imposed on the olferee on the basis of his silence.
Other than direct communication, the acceptance would oniy be valid if there is some positive act to shor.v acceptance. Positive acts include perfbrming the coqditions of the proposal. 1,9
jfrr2fr,'"rf,tnance
of the canclitions of proposal is cut ac.c.eptance of
rrte
CARLILT v CARBOLIC SMOKE BALL COMPANY Who would qtill c,,ffo- i-n,,^--^
;i;il'fi;;s
-r, er using th eir aft
;13"H:1^1llTlY l"nuenia buyer would use it according to the
proiu ct,
;
srerring ro anyone
;-"# Jl ;?iil:
i"ri.,.?ionr. uied^the p.oJ.,., according to the instmctions but pl;iliri;jffi
*fl,"fq ; il: ;"j;U';il il: ;:t*Y:::;,::ll,:*l'lg refused to pay on ;"'*;,' the ground that the offer was ,", j;i":rif, 3,:":11*:t
,O'O"r'llL;.]: lX: plaintiff. Fleld: The plaintiff is entitled to the money. The offer was addressed to the general public at large. Anyone who performs the conditions of the proposal is regarded as makirig an acceptance. Acceptance must be communicated by the promisee or an authorizecl person. POWELL
v LEE Powell had apptied for the post of headmastcr in onc particular school. Thc Board accepted his application but the lud a""i.ionr,uo not been communicated to him officiarly. one of the managers, acting in his individual capacity informed praintiff about the seiectio, urt"prriniiii oia not receive any appointment letter. The decision r,vas laterrescinded by the Board. Held: [n rhe absence of an autho.ir.J.o__r;,;;;;; ,ffi,rr.e flrom rhe Board, there was no valid contract "i U.t*="n tt .,r.
Therearenumberol.exceptionstotherule,n,.ffi".u',be ["f".--' .ry
commnnicated. One of the exceptions is postuf s'a(2)(a) cA: The commurticaii2n of ,"r;;;;r';;'ir'
i@.:en
it
is
pttt in the c'orirsl ol rir.rn:,ri.rri"
,orpr"r".
as aguirtsr the
ir il;,"iytt
:
rn"
rcy,
r'e' when the communication is comprete against the proposer. the proposer. AD-,\ilI v LINDSELL Adam wrote to Lind.sell offering to sell wool, However he misdirected the letter and it reached Lindsel r"r,., irr"" usuar. upon receiving the retter, Lindsell immediately posted his acceptance. In the meantime, Adam had alreadv sord it to too rut". Held: once the letter of acceptan"" i. pi."a, a contract comes into existence immediately.
u.ro*".ffih;;r*d"J'*'i,
IGNATIUS v BELL The defendant made an offer to the praintiff and the offer is opened untir 20,h August- The plaintiffpost the letter of acceptance on l6,h August but reached defendant on 25th August. The defendant refused," ..il acceptance arrived later than "r'rff|oura that the specified date. Held: The acceptance was comprete against the offeror on 16,h August when the letter is posted. The contract concluded at that time. S.4(2Xb) CA The communicatio, of acceptance is complete, as against the acceptor, wlten it cotnes to the knowledge-of the propor[r-,'1irh'", the letter is 20
i.e. when the cornrnunication is complete against the acceptor, the acceptor cannot Tgvoke his acceptance anymore.
Revocation of Acceptance S.5(2) CA: An acceptance may be revoked ct any time before the communication oJ' its acceptance is complete as against the acceptor. (when the letter is received by the offeror). i.e. the acceptor can always revoke his acceptance before his letter of acceptance received by the offeror.
21
CGNSIDERATION Definition s.2(d) cA: wen at the desire
o.f the promisor, the promisee or any other person has done-or abstainedfrom doing, or does or absrains from doing, or promises to do or to abstain from doing, something, such act or abstinenr" "o, pro*ise is called ct considelglllpLJfor the promise.
arcrioo
In other words, it is a plice for which one party pays to buy the promise or act of
lTuforna
another.
Types of Consideration
I.
Executory Consideration A promise made in return of a promise / mutual promises. (e.x.^o") ' K. MURUGESU v NADARAJAH egYal The appellant agreed to sell, and the respondent agreed to buy, a house from LA91 the appellant. The agreement was written o, u pi"". of paper. Later, the appellant refused to perform the contract and argueo that-there was no consideration in the agreement and lherelore the contiact is void. Held: The agreement must be seen to be a case of executory consideration. A promise is made by one party in return by a promise made by the other@
lr
2. Executed Consideration
.
A promise made in ret.urn for the performance of an act. CARLILL v CARBOLIC SMOKE B.{LL COMAPANY Defendant advertised that they would reward 100 pounds sterling to anyone who would still suffer influenza after using their protuct, on condition that the buyer would use it according to the instructions. The plaintiff bought and used the product according to the instructions but nevertheless, still suffering influenza. Plaintiff claiied the money but the defendant refused to pay'on'the ground that the offer was not addressed to the plaintiff. Held: Held: The plaintiff is entitled to the money. Anyone who performs the conditions of the proposar is regarded as making;" ;;;";;""ce. The use of the product was deemed sufficient consideration.
o A promise made subsequen! to and in return per[ormed.
of an act that has already
been
KEPONG PROSPECTING LTD v A.E SCHMIDT Schmidt, a consulting engineer, had assisted Mr X in obtainins a nrosnecrino iron ore and also Prospecting Ltffiffit **r up@director. Af,ter the company was formed, the company promised to pay s"tmat r%o ofthe value from the mining land' The promise was in consideration of the services given by Schmidt for the company before its formation. However, the company-later failed to pay. Held: The services given by Schmidt before the promise was made is a.valid consideration even though those services were clearly past.
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fuitefgtlonsldelation -i . Consideration must be sufficient or must have some value in term of rnone-v.
r
Performance of an exlsling-lluty is nct a valid consideration.
STILK
V
MYRICK
of a ship promised his crer.v tirat if they shared between thern the seamert rvho had deserted, the r.vages of the deserters rvould be shared out betrveen them. Held : the promise was not binding because the scamen gave no consideration.
T'he captain
r,vork
of 2
They were already contracfually bound to do any extra rvott to complcte the voyage.
FIARTI,EY v POSSONBY laf* A ship's crer,v had been serior.rsly depleted by a number of desertions. The captain promised to the lemaining crervs to pay 40 pounds extra if they rvor"rld complete the voyage. Held : The promise rvas binding because there was a totally nerv duty (they did more than is obliged to do in dangerous situation)
2. Consicleration need not be adequate o 5.26 Explanation 2 CA An ogreement to whiclt tlte consent of tlrc promisor
_lreely given is ttot PHANG SWEE
v-oid
is
merelv bectuLse lhe c:onsitleration is inuelecluute.
KIII v qEH I HOCK
The respondent agreed to tlansf'er a piece olland ibr RM500 although the land was wofth more than that. He later changed hrs mind and refirsed to transf'er,
Held: There was a binding contract even though the consideration
r,vas
inadequate.
-t. Consideration need not come from the promisee o Anybody can provide considiration. VENKATA CHINNAYA V VERIKZ\TARA MAYA The sister agreed to pay annxlty to hcr brothers. In consideration of tlrc payment, the motirer agreed to transfer her land to her. T.ater, the sister relused to give the annuity arguing that there was no consideration from the brother. Held: The promise to pay lvas binding because the consideration may come from anybody. Legal Effect: An Agreement Without Consideration is Voicl S.26 CA: An agreement without consideration is void. However, in certain situations, the contract is still valid even rvithout consiCeration. These exceptions are found in S.26(a), (b), (c) CA.
, i. \at&r
An agreement on account of natural love and affection: S.26(a) CA. Conditions:
i.
The agreement must be in rvriting. ii. It must be registered, if required - (ond iii. The agreement must be betrveen parties in near relation. S.26 Iliustration (b) CA: A, .for natu'ol love uncl alJbction, promises to give his son, B, $1000. A ptLts his promise to B into writing and registers it under o lct,r*. This is u contrect. aa ZJ
ti
'
frr/oh
/rw'Y RE TAN SOH SIM The deceased (Tan Soh Sim) in her last illness had expressed a wish that her estate should be divided amongst the 2 adopted sons und z uaop,"a a"rgru".r. The legal next-of-kin, respecting this wish and drer,v ,p u, ugr.*ment renouncing all rights in favour of the 4 adopted children who were their nephews and nieces. The question was whether the agreement valid or void because no consideration. Held : According to Chinese custom the adopted children are only related to their adopted parents and adopted brothers and sisters. They are not in near relation to the relatives or family to their adopted mother. Hence, uncles and unties do not stand in near relation to their nephews and nieces. Fufthermore, the wilr made by Tan Soh Sim was not in writing.
KRISTT\AN v LASHMI AMAL Held: Parents and childrcn arc near reiation to cach other.
2' An agreement tl
:ompensate for something done h' the promisee for the promisor: S.26(b) CA. The promise to compensate can be divided into two limbs: ' Promise to compensate the promisee, wholly or partly, a past volun tary act. 5'26 Illustration (c) CA: Afinds B's purse aucr giv"e-A' $50. This is a contract.
6r.
giv-es
it to rtint. B promises
to
JM WOTHBRSPOONT v HENRy AGENCY HOUSE Held: This case did not fall under exception us-rn-"-frfy had done rhe acr on suggestion of defendant. Thus, it cannot be said to have been done ,or.,rrir1y.'
tc
F
'
Lrl
Promise.to.compensate the promisee, whoily or partry. for an act whicrr the
5'26 Illustration (d) 3.
91, A support B's
ittfatttr son.
B prontises to pay A's
ln agreement to pay a statute barred debts: S.26(c) CA. under Limitation ordinance 1953, there is a limiiof 6 y.ur. to enforce legal rights. After 6 years, the action is statute barred. Unless these conditions are fulfilled:
i.
There is a fresh promise The promise is to pay the statute baned debt iii.The agreement is made in writing iv. The agreement must be signed Uy ttre promisor or his agent.
ii.
5.26 Illushation (e) CA: A owes B $r000. bur the debr is barred by rimirarion. A signs a written promise to pay B 8500 on account oTtlre ,te:bt. This is a cantract.
24
, u
Though the Contracts Act is silent on the question of intention, case larv clearly dictates the necessity of this effient. Without intention, there is no contract. Since intention is something in son-rebody's mind, the couft had made a presumption on the existing of intention based on the nafure of the agreement:
1.
Commercial Agreement or business agreement Presumption: Parties do intend to create legal relations; thclc is a binding . agreement; except the parties can rebut the presumption. (-"5g^p-^ ) ROSE c& FRANK v CROMPTON BROS A business agreement was entered into between an American finn and a British finn. Their agreement contained the clause "...This agreement is not entered into as.a formal or legal agreement and shall not subject to legal jurisdiction in the law courts...". When there r,vas a dispute, the r\mericatr firm brought an action for breach ofcoutract. Held: The presumption was rebutted by the clear rvording ur the clause. Therefore the agreement was not 1egally binding.
2,
,
Domestic and Social Agreement - such as asrccmcnt belrveen spor.rscsi family members and friends. Presumption: Parties do not intend to create legal relations; there is nobinding agreenrent; ercept the parties can rebut the presumption. (&15r BALFOI- R v BALFOUR The husband rvho rvas working abrorrtl pronrisetl to ply rnaintenarrce to his r.vife in T.ondon. Hor,vever he failed to perlorrn his promise. Helci: There r,vas notindlng-col:rtraqLHe rvas not obliged to pay.
r\IERRIT v MERRIT The husbanA fro*ir.O to transler the matrimonial house ro the rvife iI she lvould pay the outstanding rnorlgage paynent, The agreement rvas made in rvriting and signed by the husband. Held: There was a binding contract between the parlies.
SIMPI(NS v PAYS A grandmother, grandchild and a tenant entered a rveekly competition. They' shared all the efforts and expenses together but they only used the tenant's name as candidate. They agreed to share competition prize had the1" u-or-r rt. When their entry r'von the prize, the tenant refused to share. Held: There lvas a binding contract betrveen the parties.
25
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All
agreements are contracts tf thelt are ntade b1t the fr.ee consent ,f c{acrt1 , ,) ':*:": pqrrres contpetent to coiltr^ct. conpwactrd:,.:'r:o' Every person is contpetent to contrctct trlu,t is of the trge of ntajoriry. sountl mind attcr not disquarified b.v urry r,w to wrticrt he is sttbiecr.
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Section
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