VOID AND ILLEGAL CONTRACT

Section 24, Contract Act 1950

GROUP MEMBERS
ALIF AZLAN BENJAMIN BIN IDRIS GM 05293
DOH SIEW FONG GM 05290
DZULPADZLI BIN SHAARIN GM05250
MOHD ZAHILE BIN ISMAIL GM 05234
NUR SYAZANA BINTI ZULKIFLI GM 05285
Introduction

Section 24ofMalaysianContractAct
1950dealswithWhat considerations
and object are lawful, and what not
Void Agreements
Section24,ContractsAct1950
Theconsiderationorobjectofanagreeent
islawf!l,!nless"
#c$ itisfraudulent%
# d $ in&ol&ed or i'lied contract injurious to
person or property ofanother%or
#e$ co!rtregardsitas immoral,oropposed to
public policy(
S24 c! "raudu#ent contract
Anobjectandconsiderationofacontractisfra!d!lent(
Thisisdifferentwithfra!d!lentisre'resentationwhereoneisfra!d!lently
ind!cedbyanother'artytoenterintocontract
Illustration (e Section 24"
A, B and C enter into an agreement for the division among them of gains acquired,
or to be acquired, by them by fraud. The agreement is void, as its object is
unlawful.
!"ample"
Relationship between rincipal ! agent
if A "the agent# without $nowledge of his rincipal agrees to obtain money from
B%s lease of the land that belongs to his rincipal.
The agent is unlawfully receiving a secret profit.
S24 d! in$o#$e% or i&'#ie% in(urie% to
'er%on or 'ro'ert) o" anot*er

Anycontractwhichitsconsiderationorobjectsca!sesinj!ryto
'ersonor'ro'ertyofanotheris)*+,!ndercontract
#AS! Syed Ahamed Alhabsyee $% &uteh bt Sabtu ('(22
ISS)! ,efendantasatr!steeofa'ieceoflandwhichbelongingto
ainor(+nthiscase,defendantagreedtosellthelandto
'laintiff(
#*)+,-S .!#ISI*/ The transaction was V*I., d!e to the defendant action
would affect the interest of minor #inor wo!ld lost a
'ieceofland$
#AS! ,aylor $% 0owers('123
ISS)! The 'laintiff was being 'ressed by his creditors, to 're&ent
certinachineryfrofallingintotheirhands,hetrasferredit
tooneAlcoc-(
.e then called two eetings of creditors in an atte't to
reachasettleentwiththe,b!tnonewasreach(
The 'laintiff s!ccessf!lly claied bac- the achinery fro
defendant,whowasoneofthecreditorsandhadobtained
the achinery fro Alcoc- with notice of the fra!d!lent
scheeandinthehope of benefiting from it%
#*)+,-S .!#ISI*/ Thedecisionbasedon the fact that the illegal'!r'osehad
notbeencarriedo!t(/ocreditorhadbeendefra!d(
S24 e! i&&ora# or a+ain%t 'u,#ic 'o#ic)
Any contract which its consideration or object is regarded as immoral or
opposed to public policyisV*I.!nderthelaw
Section24illl!stration#j$Immoral #ontract
A,whoisB%s ad&ocate,'roisestoe0ercisehisinfl!ence,ass!ch,withB
in fa&o!r of C, and C 'roises to 'ay 1M1,000 to A( The agreeent is
$oid,beca!seitisioral(
Section24ill!stration#-$Immoral #ontract
Aagreestoletherda!ghtertohire B forconc!binage(Theagreeentis
$oid, beca!se it is ioral, tho!gh the letting ay not be '!nishable
!nderthe&enal #ode(
#AS! Aroomogum #hitty $% 4im Ah 5ang ('1(4
ISS)! The'laintiffinitiatedaclaifortheref!ndofoneyhelent
toabrothelb!siness(
#*)+,-S .!#ISI*/ Theoneylentforthe'!r'oseofbrothelb!sinesswasnot
reco&erable for illegality( The object of the agreeent was
clearlyimmoralandagainst the public policy(
#AS! ,he Aspinall #ur6on 4td V% 7hoo ,eng 5oc8
('(('
ISS)! The'laintiffhadta-eno!tanactionagainstthedefendant
in the 2nglish .igh co!rts for !n'aid gabling debts and
obtained a j!dgent(The 'laintiff then a''lied to 'roceed
to registration of the j!dgent in Malaysia3s .igh Co!rt,
when was resisted by the defendant on the gro!nds that
gabling debts are not reco&erable !nder Malaysian
contractlaw(
#*)+,-S
.!#ISI*/
,isissingthedefendant3sa''eal"
#1$ hadthecontractbeenenteredinthisco!ntryithad
beensoe0ec!tedwithlawf!lconsideration,andsection
24oftheContractsAct1950cannota''lytoa-eit
&oid%
#2$ theche4!e!swereiss!edine0changeforcashand
gaingchi'sfor'!r'osesofgaingatalicensed
gaingcasino(Theenforceentofthe56j!dgent
cannotbeconsideredasagainstthe'!blic'olicyof
Malaysia(
Section24ill!stration#f$Against &ublic &olicy
A'roisestoobtainfor B ane'loyentinthe'!blicser&ice,andB'roisesto
'ay1M1,000toA(Theagreeentis$oid,astheconsiderationforitis!nlawf!l(
#AS! 9alaysia Airline System 0hd $% 9alini /athan :
Anor
ISS)! Theres'ondentsboo-edandhadconfiredtic-etstoflyon
thea''ellant7sairlineonasched!leddate(Astheflightwas
f!lly boo-ed, the a''ellant was !nable to accoodate
theres'ondents on the said flight( The res'ondents s!ed
thea''ellant fordaages( The a''ellant relied on
condition ( of the conditions of contract 'rintedon the
airlinetic-et(
#*)+,-S .!#ISI*/ Thea''ellantwasentitledtorelyonthesaidconditionand
was th!s not in breach of contractfor failing to fly the
res'ondents on the a''ellant7s airline( +n arri&ing at the
decision, the co!rt considered that 7the 'laintiffs o!ght to
ha&e -nown condition 9 and they were 'res!ed to ha&e
-nownitasitwas'rintedonthetic-et(
!"emption #lause;
Conc#u%ion
Contracts or agreeents will be considered as
)*+,if"
#c$ itisfraudulent%
# d $ in&ol&ed or i'lied contract injurious to
person or property ofanother%or
8 Syed Ahamed Alhabsyee v. Puteh bt Sabtu (1922)
- Taylor v. Boers(1!"#)
# e $ co!rt regards it as immoral, or opposed to
public policy(
- Aroomogum $hitty v. %im Ah &ang (1!9')
- The As(inall $ur)on %td *. +hoo Teng &o,- (1991)
- .alaysia Airline System Bhd v. .alini /athan 0 Anor
Condition9