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QUESTION 1

In business it is important of contract or agreement between two business. In order to have a valid and appropriate agreement in any business enterprise or organisation, there should clear understanding of terms of contract between both parties before entering into a suitable, legal and binding contract. A business agreement is defined as a written document signed by two or more people that contain the details of the business venture. A business agreement is also known as contract, a contract is defined as a binding agreement between two or more parties (individual, businesses, organisation or government agencies who have come together to exchange something of value. A contract may be inform of written or verbal.) A Contract is a binding agreement between two or more parties to do, not to do or promise to do something. There are different types of business agreement which include with Unilateral Contract, Bilateral Contract, Specialty Contract, Simple Contract and Standard Contract. For Unilateral contract is defined as one sided contract where by one party known as offeror, makes a promise in exchange for an act by another party known as offeree. In unilateral contract only one party assumes an obligation or responsibility under the contract. For example, if Samad promises to give $120 to anybody who finds his wallet or if a Rahim promise to give his son $400 if he passes his examinations. It shows that it is only one party has assumed an obligation to pay another party if they carry out an act. In Balfour V Balfour (1919) cases, the agreement was made between husband and wife, the husband was due to return to Ceylon where he was employed but his wife was asked to remained in England for medical reasons and the husband promised to pay his wife 30pounds until she joined the husband at Ceylon, the couple divorced and the wife brought as action against the husband because the husband failed to pay the wife. Different with Bilateral Contract that was exist in business transaction between one or two people. Sale of good is an example of bilateral contract. In bilateral both parties made the promises and they are both bound to comply with terms of the agreement. The party making the promise is the promisor and other party is the promisee. Example of a bilateral contract is when Mr Muthu promised to sell his house to Mr Amar a bilateral contract is binding both parties because they have both provided considerations for accepting the terms. Other contract is Specialty Contract which defined a formal contract in law. Speciality contract is used by

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various business transactions. It can be used in lease of property, and in deed of partnership. In speciality contract both parties that are involved must signed a written document to show that they have entered into a contract. Also the parties that are involved must have a copy of the written document as evidence that they are into contract. Another contract is Simple contract that explain every contract it very important to keep any contract in form of written form so that the contract will be clear to both parties that are entering into a contract. If there is breach of contract between the parties they can sue for damages. A simple contract might be in verbal or written form depends on parties to the contract. And other different types of business agreement is Standard Contract which is a form of contract that is entered into by various big companies in the world. The agreement is seal and documented by the representatives of each company who are expert in their fields. For example in insurance company can enter into an agreement with another re-insurance company. Both parties are legally bound, they can sue for breach of contract in case one company fails to comply with the terms and conditions of the agreement. In agreement it is importance to have key elements that must required for the formation of a valid contract. In this task, I was find a simple agreement on internet and the agreement is about offer to purchase (Refer Appendix 1). In this agreement, first key element that is importance is an offer. As the agreement also is about offer to purchase, so an offer is defined as the statement of the willingness to enter into a bargain so made as to justify another person in understanding that his assent to the bargain is invited and will conclude it. In offer it can be distinguished from three types which is a mere statement of intention, a mere supply of information and an invitation to treat. In this agreement, it was state this offer is subject to the approval of the necessary bond of not less than at the current rate of interest and the PURCHASER hereby undertakes to make every effort to raise a bond and to apply for such bond within 5 days of acceptance here of. Next elements is acceptance, that defined of an offer can occur in several ways: Acceptance of an offer is a manifestation of assent to the terms there of made by the offeree in a manner invited or required by the offer. An acceptance must not change the terms of an offer. If it does, the offer is rejected. A material change in a proposed contract constitutes a counter offer, which must be accepted by the other parties. On the agreement, an acceptance was related when the agreement state All benefits and risk of ownership shall pass to the PURCHASER on date of occupation and possession and occupation of the property will be given to and accepted by the PURCHASER on (date). If the date of

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registration of transfer does not coincide with the date of occupation, the party enjoying the benefit of occupation will pay compensation for the duration of such occupation. In the agreement also conclude with the statement PURCHASER may within 5 days after signature revoke the offer, by written notice delivered to the SELLER or his or her agent within that period. The period of 5 days shall be calculated with the exclusion of the day upon which the offer was made and of any Saturday, Sunday or public holiday. The written notice shall be effective only if it is signed by the PURCHASER, identifies the offer that has been revoked or terminated and is unconditional. Where an offer is revoked every person who received any amount from the PURCHASER or prospective PURCHASER in respect of the offer, shall refund the full amount of such payment to the PURCHASER within 10 days of the date on which the notice was delivered to the SELLER or his/her agent, this is was related to offer. Other elements is consideration. Consideration can be understood as the price paid for a promise. Consideration is an essential element of any valid contract. Consideration consists of either a benefit to the promisor or a detriment to the promisee. It is a present exchange bargained for in return for a promise. It may consist of some right, interest, profit, or benefit that accrues to one party, or alternatively, of some forbearance, loss or responsibility that is undertaken or incurred by the other party. It is not necessary for a contract to be supported by a monetary consideration. Consideration can be divided into the following categories, Executory Consideration, Executed Consideration, Past Consideration. Next is capacity, capacity refers to a persons ability to enter into a contract. In general, all adults of sound mind have full capacity. Capacity are categorized into Minor, mental incapacity and intoxication. A minor is a person, under the age of 18 (the age majority was reduced from 21 to 18). The law tries to protect such person by restricting their contractual capacity and thus preventing them from entering into disadvantageous agreement. For mental incapacity and intoxication, it means a contract make by a party who is unsound mind or under the influence of drink or drugs is prima facie valid. The person claiming such incapacity, nonetheless must pay a reasonable price for necessaries sold and delivered to them. And last key elements is legal purpose, mean the objective of the contract must be for a legal purpose. For example, a contract for illegal distribution of drugs is not a binding contract because the purpose for which it exists is not legal. So these all the elements are necessary to form a binding contract.

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QUESTION 2

Contractual agreement has traditionally been analysed in terms of offer and acceptance. One party, the offeror, makes an offer which once accepted by another party, the offeree, creates a binding contract. Before a contract is made, one person must make an offer and another person must accept it. An offer must be distinguished from mere willingness to deal or negotiate (Field, 2007). In this situation Maher has wrote to Zain, on 21st July 2012 asking whether Zain has be interested in purchasing Peruvian 5 cent blue stamp. Then Zain wrote his reply that he willing to pay 500 for the blue stamp and he will consider to buy it on that price unless if he hear the contrary from Maher before 28th July 2012 and will collect the stamp from Maher shop on 8th August 2012. This situation mean Zain has make offer to Maher, he want to buy Peruvian 5 cent blue stamp which he deal a price to Maher and willing to pay 500. This means Zain has negotiate the price with Maher before acceptance takes place. So Zain can make a deal price as a counter offer to buy Peruvian 5 cent blue stamp. Because Maher only asking Zain either he interested to purchase his Peruvian 5 cent blue stamp without make any price deal. So there are no counter-offer has been made. As a legal definition of counter offer, it means a type of offer made in response to another offer, which was seen as unacceptable. A counter offer revises the initial offer, making it more appealing for the person making new offer. Responding with a counter offer allows a person to decline on a previous offer, while allowing negotiations to continue. For example if Maher state a price, offer to sell Peruvian 5 cent blue stamp for 700 to Zain and Zain ask to pay it 500 so Zain has made a counter-offer so Maher also can either make another counter-offer or just accept the offer by Zain. So as Zain has willing to pay 500 for Peruvian 5 cent Blue and only consider for that price if he hear contrary from Maher before 28th July 2012 then he collect it on 8th August 2012, Maher has posted a letter of acceptance on 26th July 2012. Mean that he was accept Zains offer. But the letter was wrongly addressed and reached to Zain on 14 August 2012. And Maher has changed his revokes his acceptance by email to Zain 3 days after 26th July 2012. For this case, it was related to acceptance through the post. As the case of Adams vs Lindsell (1818) 1 B & Ald 681, Lindsell, who were wool dealers, wrote to Adams and offer him sending by post. Then this letter

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was misdirected by Lindsell and as a result it was not received by Adams in Worcestershire till 7 pm on Friday 5 September. On that evening Adams posted a letter accepting Lindsell's offer. The letter of acceptance was not received by Lindsell till Tuesday 9 September. On Monday 8 September, Lindsell not having received an answer on Sunday 7 September, as they expected, sold the wool to another person. In the case of acceptance by post acceptance takes effect when the letter, correctly addressed, is posted or handed to a post office employee authorised to receive letters for posting. So here the defendants who have proposed by letter to sell this wool, are not to be held liable, even though it be now admitted that the answer did not come back in due course of post. Till the plaintiffs' answer was actually received, there could be no binding contract between the parties and before then, the defendants had retracted their offer, by selling the wool to other persons. But the Court said, that if that were so, no contract could ever be completed by the post. For if the defendants were not bound by their offer when accepted by the plaintiffs till the answer was received, then the plaintiffs ought not to be bound till after they had received the notification that the defendants had received their answer and assented to it. And so it might go on ad infinitum. The defendants must be considered in law as making, during every instant of the time their letter was travelling, the same identical offer to the plaintiffs; and then the contract is completed by the acceptance of it by the latter. Then as to the delay in notifying the acceptance, that arises entirely from the mistake of the defendants, and it therefore must be taken as against them, that the plaintiffs' answer was received in course of post. (Magazine Inside Law) From Maher and Zain case, this offer are mere supply of information. Based on the case of Harvey v Facey (1893) demonstrates this point. The plaintiff telegraphed the defendants as follows, will you sell us Bumper Hall Pen? Telegraph lowest cash price. The defendant answered, Lowest price for Bumper Hall Pen 900. The plaintiff the telegraphed, We agree to buy Bumper Hall Pen for 900, and sued for specific performance when the defendants declined to transfer the property. It was held that the defendants telegram was not an offer capable of being accepted by the plaintiff, it was simply a statement of information. This clearly has similarities with asking the price of goods in a retail outlet. As explanation from the case above, we can see that there was no contract complete between Maher and Zain. This is because Maher as a stamp dealer are not to be held liable even he was accept the offer. Even

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in Zain offer, that he want to hear contrary from Maher before 28th July 2012, but because Maher has retracted his offer after three days from the date that he posted acceptance letter. So supposedly the date that Maher revoke his offer in on 28th July 2012 and sending by email to Zain. But the acceptance letter only reached to Zain on 14th August 2012, and even the answer was actually received, there could be no binding contract between them. This is because Maher where not bound between him and Zain offer till the answer of acceptance was received. In this situation also related to mere silence or inactivity on the part of an offeree will not amount to acceptance. As the case of Felthouse vs Bindley (1862) 11 CB 869, a nephew discussed buying a horse from his uncle. He offered to purchase horse the letter for which offer stated If I hear no more about him, I shall consider the horse mine. The horse was then sold by mistake at auction. The auctioneer had been asked not to sell the horse but had forgotten. The uncle commenced proceedings against the auctioneer for conversion. The action depended upon whether a valid contract existed between the nephew and the uncle. So this case was held there was no contract. The uncle had not communicated acceptance because silent will not amount to acceptance. For Maher and Zain case, when Maher has asking to Zain that whether he was interested in purchasing Peruvian 5 cent blue stamp, Zain has replied to buy the which his offer stated I am willing to pay 500 for blue; I will consider it mine at that price unless I hear the contrary from you before 28th July 2012 and will collect it from your shop on 08th August 2012. Maher has accept his offer but there was clearly no complete bargain at that time and when he replied to Zain, there was a mistake happen when a letter of acceptance was wrongly addressed. So as the answer received late from the date that Zain was offer, it can be consider as silent of acceptance. Which because when Zain read the email on next day after Maher revoke his acceptance and replied that the contract was already occurred on 28th July 2012. So before the contract was occurred on that date, there is no answer of acceptance until the letter of acceptance was reached to Zain on 14th August 2012. As the case held there was no contract happen as it cannot have silence as acceptance. For Maher and Zain case, the contract is not valid because of mere silence between them and because letter of acceptance was wrongly addressed, so there was no contract available as explanation on cases of Adams vs Lindsell (1818) 1 B & Ald 681 as above. As Contract Act 1950, Sec 5 (2) an acceptance may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards. So Maher can revoke his acceptance before the contract

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occurred. But for this case, if there was no contract happen Maher also can revoke the acceptance according to the delay in notifying the acceptance. In this case, it also applied an e-mail as new technology communication between Maher and Zain. when Maher sent an e-mail to Zain to revoke his acceptance and on the next day and Zain read the email. In light of the above discussions, the inevitable question remains: Will the courts apply the postal acceptance rule to e-mail communications? The answer to this question seems dependant upon whether the courts classify e-mail as a virtually instantaneous method of communication. E-mails are transmitted via the telephone network at the same speed as facsimiles and the time delays which are experienced when sending an e-mail are generally shorter than the delays which occur when sending a letter via the conventional postal system. The transmission time of an e-mail message may vary, however the delays which may be experienced are often brief and unlike the postal system, are unrelated to the physical distance between the offeror and the offeree.It is therefore probable that the courts will expand the notion of virtually instantaneous communications to encompass communications transmitted by e-mail. If it is concluded that e-mail is a virtually instantaneous method of communication, the consequence which generally flows from this conclusion is that the postal acceptance rule will not apply to acceptances transmitted by e-mail. However, for case of Maher and Zain, an argument which may be raised in support of the application of the postal acceptance rule is that Maher should not be held responsible for any faults especially when he wrongly addresses a letter to Zain which occur after he has transmitted the message of acceptance. This argument is that the Maher has effectively lost control over the acceptance and has done everything possible to communicate acceptance to Zain. Implicit in this argument is the assumption that Zain should bear the risk of problems which may occur after the e-mail is transmitted by the Maher. In light of the functionality provided by available e-mail systems, this argument is unconvincing. An offeree may be able to monitor the progress of an e-mailed acceptance and may also be able to retract it up until the time when it is opened by the offeror. Effectively, the offeree retains a degree of control over the acceptance until it is read by the offeror. This shift in the balance of power undermines the majority of policy considerations which have been used to justify the existence of the postal acceptance rule. It should also be borne in mind that an offeree can easily make a telephone call to confirm that the e-mail acceptance message has in fact been received by the offeror. He can therefore ascertain when a binding contract is formed and can structure his or her affairs accordingly. The argument in favour of acceptance upon

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actual communication is supported by the functionality provided by e-mail systems. As some email systems allow a sender to retract a message up until the point when it is opened by the recipient, it would seem appropriate that acceptance should not occur until the message is read. To decide otherwise could lead to the absurd consequence that an offeree may be legally bound by an acceptance which has been retracted by the offeree prior to the offeror gaining knowledge of the acceptance.

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QUESTION 3
For this situation, when Jack works into the night to complete an important report for his boss, Lisa there was no agreement or offer has been made between any parties. This is because Jack only do his work as been asked by his boss, and Jack was volunteer himself stay works at night to complete the report. When his boss, Lisa is very pleased with the report and says I know youve worked very hard on this. Ill make sure there is an extra 200 in your pay at the end of the month, Lisa has make a promise to Jack. So as explanation whether or not there is consideration to enforce this promise. The answer for this situation is yes , there was consideration on this promise. This consideration is Past Consideration. Past consideration mean is when something is done before the date of the agreement, at the desire of the promisor, it is called past consideration. It must be noted that past consideration is good consideration only if it is given by the promisee, at the desire of the promisor. It also like something that has already been given or some act that has already been performed that cannot therefore be induced by the other party's thing, act, or promise in exchange and is not truly a consideration. As a Contract Act 1950 Sec 2 (d) state, when, at the desire of the promisor, the promisee or any other person has done or abstained from doing or does or abstain 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. Another example same like Jack and Lisa case, is when a window cleaner cleans Johan's windows without being asked to do so. Johan agrees to pay the window cleaner tomorrow for cleaning the windows. On returning to be paid Johan refuses to pay the window cleaner. This also was a past consideration, and there was no contract between Johan and the window cleaner. The window cleaner has furnished no new consideration in return for Johan's promise to pay. The window cleaner's consideration is past consideration and therefore no consideration. So between Jack and Lisa if one party which is Jack voluntarily performs an act, and the other party which Lisa then makes a promise, the consideration for the promise is said to be in the past. The rule is that past consideration is no consideration, so it is not valid and Jack cannot to sue on a contract because of his responsibilities as a worker to Lisa. Even under the modern view, a promise based on a moral obligation will not be enforceable where the promisor himself did not receive a material benefit, even if the promisee incurred

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expenses. For example case Mills v. Wyman, 20 Mass. 207 (Mass. 1825), when Levi Wyman returned from a voyage at sea and fell sick among strangers. Mills (P) gave Levi Wyman shelter and comfort until he died. After Levis death his father Wyman (D) wrote to Mills and told him he would pay all of the expenses for the care of his son. Wyman later refused to pay and Mills sued. At trial the court directed a non-suit in favor of D because there was no consideration. The court stated that moral obligation is sufficient consideration in some cases but not under these facts. In such cases, enforcing promises based on preexisting equitable obligations may be enforced because they merely remove an impediment created by the law to enforce debts that are due, but which public policy protects debtors from being compelled to pay. In this case, however, the services provided to Ds son were not bestowed at his request. The son had left his fathers family and was not under Ds care when he died. The court held that the general position that moral obligation is a sufficient consideration for an express promise is to be limited in its application to cases where at some time or other a good or valuable consideration has existed. For Jack and Lisa case, are seen as existing contractual duty which if Lisa promises to do something Jack already bound to do under a contract or other explanation that Jack is under responsible to do his work, that is not valid consideration. So we can related the situation on this case of Stilk v Myrick [1809] EWHC KB J58 King's Bench Division, when the claimant was a seaman on a voyage from London to the Baltic and back. He was to be paid 5 per month. During the voyage two of the 12 crew deserted. The captain promised the remaining crew members that if they worked the ship undermanned as it was back to London he would divide the wages due to the deserters between them. The claimant agreed with the promise. But then the captain never made the extra payment promised. As the case held, the claimant was under an existing duty to work the ship back to London and undertook to submit to all the emergencies that entailed. Therefore he had not provided any consideration for the promise for extra money. Consequently he was entitled to nothing. So as Jack works into nights to complete his duty or responsibilities as a workers, at the same time he did not provided any consideration for promise to take an extra money 200 from his boss Lisa. If Lisa was never made the extra payment, the promise is not valid if Jack want to sue her because of the past consideration is no consideration.

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Past consideration also can related with few relevant principles and leading cases regarding past consideration. For example, Roscorla v Thomas cases state, consideration must be given in return for the specific promise of the other party (i.e., it can not be past, an unrelated promise not in connection with the specific bargain, or a promise given only when the alleged consideration had been completed is generally unenforceable). Others is Pao On v Lau You Long cases state that a promise to perform an existing obligation can constitute good consideration in certain cases. The circumstances in which a promise made after the acts can constitute consideration are derived from Lampleight V Braithwait and Re Casey's Patents. For Lampleigh v Braithwait, past consideration is sufficient when it is provided at the request of the promisor and Re Casey's Patents state, the parties must have understood that the work was to be paid for in some way either by money or some other benefit. So the conclusion in this case is, the past consideration is no consideration. Mean there was no contract has been made in this case if the promise has been made after something that has already been given or some act that has already been performed. b) Types of Intention and Its consequences Based on the case studies, Lisa has intention without create legal relations when she decided to pay Jack an extra 200 at the end of month as a promise, after she satisfied with Jack works and Jack has working hard to complete his report. On Jack and Lisa cases, there are few concept of intention without create legal intentions, which if there is no intention to create legal relations the contract would not be enforceable, legal and binding. Intention to create a legal relation is one of the essential elements of contract. So, if there is no intention to create a legal relation, the contract can be assumed as a not legal. Due to that, the contract may not being enforceable because there is no intention to create legal relations at the beginning which not making contracting parties to be legally binding. Other concept is without intention to create legal relations, the parties cannot sue each other and it may cause the contracting parties are not being legally binding and this circumstances may cause the contract is enforceable. Therefore, when the contract is enforceable, the contracting parties cannot sue each other and this will spoil their business crisis. This will make the contracting parties hard to enquire their justice. Next concept is without intention to create legal relations the contract may become a mere promise. In addition, with no intention to create legal relations, it will make any contract to become a mere promise. Mere promises simply like a simple promise arise when there is no

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intention to create legal relations. Base on Jack and Lisa case, the situation of mere promise is when Lisa promise to pay an extra 200 to Jack as he work very hard to complete his report. So theres no intention to create legal relations. The case of Jack and Lisa are types of Commercial or business relations, but intention not to create legal relations. As the case example, Kleinwort Benson Ltd V Malaysia Mining Corporation Bhd in year 1989, the case shows when the plaintiff (bank) agreed to loan on MMC metals, subsidiary of MMC. The bank asked MMC to guarantee loan and MMC said not policy to guarantee loans to subsides offered letter of comfort stating : it is our policy to ensure that the business of MMC (Metals) is at all times in a position to meet its liabilities under the arrangements. The bank accepted but charged higher rate of interest and the market collapsed and MMC went into liquidation. The bank tried to claim balance from MMC. So in this case, court found in favour of plaintiff, relying heavily on Skyways (1964) ruling overturned on appeal and the judge said Skyways case not was about promise supported by consideration so not applicable here. Hence, ruled no intention to create legally binding agreement statement was not meant to act as guarantee, stating on current position, not future intention. And based on Jack and Lisa case, as Lisa only promise intention without create any legal relations. Besides that, when there is no intention to create legal relations, it will make the contract or agreement become less powerful due to whether one or both of the parties does not have a consent mind. So, if the contract lack of binding effect, it will cause the difficulty to the party involved in future. and between Jack and Lisa, it cannot take an action as sue if other parties was never made any extra payment as promised.

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QUESTION 4

When it comes to legally binding agreements, certain people are always considered to lack the legal ability (or capacity) to contract. As a legal matter, basically they are presumed not to know what they're doing. These people, legal minors and the mentally ill. For example are placed into a special category. If they enter into a contract, the agreement is considered "voidable" by them (as the person who lacked capacity to enter the agreement in the first place). Voidable means that the person who lacked capacity to enter the contact can either end the contract or permit it to go ahead as agreed on. This protects the party who lacks capacity from being forced to go through with a deal that takes advantage of his or her lack of savvy. In the case above it was categorized to capacity because when Pia 17 years old student is a Minor when he applied loan RM2,000 from KasiWang. As explanation of a minor, it explain that a Page 13

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minor is a person under the age of 18 (the age of majority was reduced from 21 and 18 by the Family Reform Act 1969). The law tries to protect such persons by restricting their contractual capacity and thus preventing them from entering into disadvantageous agreements. The rules which apply are a mixture of common law and statute and depend on when the contract was made. Agreements entered into by minors may be classified within three possible categories: valid, voidable and void. In Malaysia, the age of majority is recognized as above eighteen years of age as stated in the Age of Majority Act 1971: The minority of all males and females at the age of eighteen years and every such male and female attaining that age shall be of the age of majority. When Pia came study to KPMSI, he meet Rozita, fall in love with her and after 2 weeks later he promise her to marry. But after graduating, Rozita has dragged him to the Syariah Court claiming breach of promise to marry her. In this case as a Minor when Pia made a promise, he can void a contract for lack of capacity only while still under the age of majority. As exception for a minor can void contract is when he still study and education is important for his age at that time. It also consists a reasonable that a minor should necessary for substance, health and comfort. So Rozita cannot claiming any action for this exception as a minor. One of the elements constituting a valid contract is that the parties entering the contract are those who have the competency to contract. This is based on section 10 (1) of the Contract Act 1950 which states: All agreements are contracted if they are made by the free consent of parties competent to contact, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void. Competency refers to the capacity of being an adult, having a sound mind and not forbidden by law to enter any contract (e.g, bankruptcy). This principle is based on section 11 of the Contract Act 1950 which provides that every person is competent to contract who is of the age of majority according to the law to which he is subject, and who is of sound mind, and is not disqualified from contracting by any law to which he is subject. As a case Tan Hee Juan v The Boon Keat in 1934. In this case, the plaintiff had transferred ownership of a piece of land to defendant. He then applied to the court for an order to set aside the transfer. The court refer to Mohori Bibee and held that the contract was void and ownership of the land had to be returned to the plaintiff. In Malaysia, Mohari Bibee case in 1903 was followed in the case of Tan Hee Juan v Tan Boon Keat. Plaintiff who is a minor said that contract that involved a minor is said to be void. So there is no contract at all. So it was held that the plaintiff succeeds in his claimed and therefore Tan Hee Juan should not have to payback to the defendant. Later, in 1950 Contract Act had been made and in the section 69 of Page 14

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the Act provides that if a person, incapable of entering contract or anyone whom he is legally bound to support, is supplied by another person with necessaries suited to his condition in life, the person who has furnished such supplies is entitle to be reimbursed from property of such incapable person. Besides of that, there is another cases can be refer. That case is Government of Malaysia v. Gurcharan Singh. Gurcharan Singh was given a scholarship after finishing his high school or something to go study law in UK. And like most government scholarships, there's this bond thingy rite? Where when after you finish your studies, you're tied to work for the government for a period of time/But after this Gurcharan Singh came back from UK, he didn't wanna work for the government. He said when he entered into a contract, he was Minor. Age of Majority Act 1971 says minors are persons who haven't reached the age of majority which is 18 years. So technically, Gurcharan at the age of 17, was a minor when he entered into a contract. The effect of a contract entered into by a minor is considered void. But different when Pia applied loan to KasiWang Sdn Bhd as much RM2,000. And he promise to repay back after one year. And Pia has spent RM1500 to buy his personal needs, a watch and a smart phone. Then other balance was deposited into his account for his saving. After graduating, Pia did not repay the loan and KasiWang Sdn Bhd threatened to take legal action. As Pia applied a loan an used it for his personal needs so there is no exception as a minor. This is because personal needs is not under exception. Yet, some contracts cannot be voided. Specifically, a minor remains liable for certain contractual obligations such as Taxes, Penalties, Bank regulations, Military and Necessaries. So for this case KasiWang can take a legal action to, unless if they get permission from court because when Pia make a loan, he was still a minor. But he breach a contractual agreement as a minor. However, there are some exceptions towards a minor binding a valid contract. Under section 69 of Contract Act 1950, it is said that if a person, incapable of entering into a contract, or anyone whom he is legally bound to support, is supplied by another person with necessaries suited to his condition in life, the person who has furnished such supplies is entitled to be reimbursed from the property of such incapable person. Under necessaries a minor can enter valid contract if only it is the basic need of the minor and suitable of his station in life or lifestyle.

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APPENDICES

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ESSENTIAL ELEMENT OF A VALID CONTRACT

REFERENCES
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S. Rich & Attorney (2003). Business Formation : LLCs & Corporation, Who Lacks the capacity to contract. Retrieved September 6, 2013, from http://www.nolo.com/legalencyclopedia/lack-capacity-to-contract-32647.html

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