DEFINITION

LAW APPLICABLE
ELEMENTS OF CONTRACT

PARTIES TO CONTRACT
VALID, VOID, VOIDABLE CONTRACT
DISCHARGE AND REMEDIES

An agreement between 2 or more parties

that is legally binding between them
S.2(h): an agreement enforceable by law
Nucleus of contract is agreement
But, not all agreements = contract
Because a contract must have some elements
Example: agreement to have dinner
-X contract
-Because X intention to create legal
relation

 Elements:
1. Offer and Acceptance
2. Consideration
3. Intention to create legal relation
4. Legal capacity etc

S.10(1) What agreements are contracts

All agreements are contract if they are made by
the free consent of parties competent to
contract, for lawful consideration and with
lawful object, and are not hereby expressly
declared void

Contracts Act 1950

-applicable throughout Malaysia
-origin from England but closer to Indian C.A.
-lacking- X deal every aspect

Common law
-cases to interpret Contracts Act

English law
-fill the gaps in C.A if conflict C.A prevails

Islamic law
-X binding but Msian courts give due weight & respect
because C.A. 1950 = Indian C.A.

Offer
Acceptance
Intention to create legal relations
Consideration
Certainty
Legal capacity

Definition
Types
To whom
Communication of offer
Revocation
Issues: Counter-offer & Invitation to treat

S.2(a):
when one person signifies to another his
willingness to do or abstain from doing
anything, with a view to obtaining the assent
of that other to the act/abstinence, he is said to
make a proposal

S.2(c): proposer = promisor

e.g. A offers to buy Bs car from RM10,000 with
a hope that B will accept

S.9 :2 types1. Express offer

Oral
Writing

2. Implied offer
conduct

To a particular person
-only addressee can accept it.
-if A offers to B to buy Bs car, only B can accept As offer
To general / public
-anyone who meets all the terms of offer can accept it

Carlill v. Carbolic Smoke Ball

-Def advertised their products & offered money to anyone
who still suffer from influenza after using the products
according to instructions for a fixed period (guarantee that
the user will be OK after using the products).
Def refused
Held: Plaintiff has accepted the offer made to the world
(public), thus entitled to the money

S.4(1):
-complete when offeree knows about the offer

Issue: Offer made by other means of

communication email, telephone, SMS, fax,
etc

S.5(1) : anytime before communication of acceptance is complete

a)

S.6 : How to revoke?

Communication before acceptance is made
Byrne v. Van Tiehoven:
revocation of offer sent by telegram is communicated only when
offeree receives it

b)

Lapse of time

c)

Failure to fulfill conditions

Financings Ltd. V. Stimpson
Held: offer to buy a car revoked when it was badly damaged

d)

Death/ mental disorder of proposer

Definition
Types
Communication
conditions

S2(b):
Final & unqualified assent to all the terms of
the offer

S9:
1. Express oral, writing
2. Implied conduct, sign

S.3: must be communicated

S.4: complete when it comes to the offerors
attention
Entores v. Miles Far East Corp.
-Oral acceptance is drawn out by an overflying
aircraft tt the offeror can X hear the
acceptance
-X contract
-unless the acceptor receives his acceptance
once the aircraft passed over

 S.7(b):
1. Usual/reasonable way
2. Prescribed by offeror

Issue: Silence
GR acceptance by silent x acceptable
-acceptance & impose obligation
Why? unfair
To avoid unwanted contractual arrangement
Felthouse v. Bindley

While offer still in force x terminated

Made by offeree
Exactly match the term of offer (if not =
c/offer)
Must be communicated
Absolute and unqualified (s.7a)

Means another offer

Effects rejects the original offer
-not acceptable becoz there is modification in
the statement

Hyde v. Wrench
-Def offers to sell estate to Pt for 1000
-Pt counter-offer to purchase for 950
-Df refused to accept it
Then Pt again accepted the original offer (1000)
-Held : no acceptance becoz counter-offer rejects
the original offer

Means : invitation to enter into negotiation

-invitation to make an offer
ITT = preliminary communication at stage of
negotiation
ITT is not an offer
Contracts Act 1950 not provides ITT
Need to refer to common law and English law
E.g. displaying of goods, advertisement,
statement of price, request for information,
auctioneer inviting bids

Display of goods
Pharmaceutical Society v. Boots

Statement of price
Gibson v. Manchester City Council

Advertisement
Partridge v. Crittenden

Auctioneer inviting bids

Payne v. Cave