Contrac Law

7/26/2019 Contrac Law

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YOUR FUTUREBEGINSHERE

CONTRAC

T Law


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S 2(h) contract is an agreement

enforceable by law Valid agreement is

legally binding the parties Enforceable in

the court of law

S 2(g) an agreement not enforceable by

law is void

INTERPRETATION

CONTRACTS ACT 1950


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Offer

acceptance the offer

Consideration ntention to create legal relations

Capacity to contract Consent

Certainty

ELEMENTS OF CONTRACT


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!roposal s 2(a)

when a person signifies to another his

willingness to do or to abstain from doing

anything" with a view of abstaining his

assent of that other to the act of abstinence"

he is said to ma#e proposal$

OFFER AND ACCEPTANCE


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!roposal should be distinguished from

%invitation to treat& 'n attempt to induce

another party to ma#e an offer$ t is not an

offer by itself) not be bound by the law


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!roposal s 2(a)

when a person signifies to another his

willingness to do or to abstain from doing

anything" with a view of abstaining his

assent of that other to the act of abstinence"

he is said to ma#e proposal$

OFFER WHEN IT IS EFFECTIVE?


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!roposal should be distinguished from

%invitation to treat& 'n attempt to induce

another party to ma#e an offer$ t is not an

offer by itself) not be bound by the law$


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!roposal*offer+ must be distinguished from

an invitation to treat+$

,hat is an invitation to treat+-

'n invitation to treat is .O/ a

proposal*offer but a sort of preliminary

communication which passes between the

parties at the stage of negotiation$

PROPOSAL vs INVITATION TO TREAT :


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0isplay of goods in a self service

supermar#et 'uctioneer inviting bids for a

particular article 'dvertisement in the

newspaper

/hin#1 Suppose that you put an ad in the

classified section of your local newspaper

offering to sell your guitar for 3 456$

EXAMPLES OF INVITATION TO TREAT :


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!eople called 7 accepted+ your %offer+ before

you can remove your ad from the newspaper$ f

the ad were truly an %offer& you would be bound

by contracts to sell your guitar$

8ut advertisements are treated as invitations to

ma#e offers rather than an offer" thus" you would

have offers to choose from" 7 you could accept

the best one without incurring any liability for the

you re9ected$


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On some occasions" courts have

construed advertisements to be offers

because the ads contained definite terms

that invite acceptance$

E$g: deposited an amount of money

efer case Carlill v$ Carbolic Smo#e 8all

EXCEPTION TO THE GENERAL RULE:


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evocation of the offer the offeror can revo#e the offer as long as the

revocation is communicated to the offeree before the

offeree accepts$ e9ection of the offer by the offeree the offer may be

re9ected by the offeree" in which case the offer is

terminated$

Counteroffer by the offeree a counter offer is a

re9ection of the original offer 7 the simultaneous

ma#ing a new offer$

TERMINATION OF THE OFFER


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;apse of time

an offer terminates automatically by law

when the period of time specified in the offer has

passed$ 0estruction of the sub9ect matter

an offer is automatically terminated if the

specific sub9ect matter of the offer is destroyedbefore the offer is accepted$


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0eath or incompetence of the offeror*

offeree

an offeree+s power of acceptance is

terminated when the offeror*offeree dies or

is deprived of legal capacity to enter into

the proposed contract$


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when a person to whom the promise is

made signifies his assent thereto" the

proposal is said to be accepted$

ACCEPTANCE S 2!"


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'cceptance must be communicated* ma#e

#nown 'cceptance is said to be

communicated if it reaches to the

proposer*offeror

COMMUNICATION OF ACCEPTANCE


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Communication of acceptance by post is

complete as against the proposer when it is put

in the course of transmission to him" so as to be

out of the course of the acceptor as against theacceptor" when it comes to the #nowledge of the

offeror$

ACCEPTANCE #$ POST S %2"


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/he offeror is bound by a contract made

through post even though he does not

#now about the acceptance$

/he acceptor is bound by the contract only

when the acceptance has reached the

#nowledge of the offeror


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' proposal may be revo#ed at any time

before the communication of its

acceptance is complete as against the

proposer" but not afterwards S$ 5 (2)

'n acceptance may be revo#ed at any

time before the communication of theacceptance is complete as against the

acceptor" but not afterwards

REVOCATION OF OFFER AND

ACCEPTANCE S 51"


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E)

' cannot cancel the contract s$?(2)(a)

'cceptance is completed against ' when the

letter is posted receives letter of acceptancefrom 8 S$?(2)(b) acceptance completed

against 8 4 =an @ =an


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S$5(2) 'offerror 8acceptor 4 =an !ost ;O

to 8 5 =an !ost ;' to ' (s$?(2)(a) contract

concluded) @ =an : receive ;' from 8 8

cannot revo#e his acceptance on @ =an"contract completed against 8$ (S 5(2)


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/he price which one party pays to buy the

promise or act of the other$ .o need to be

adeAuate (bungalow B 3566) !ang

Swee im v$ 8eh Doc#

CONSIDERATIONS


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ntention relates to somebody+s state of mind

;aw cannot read the mind use presumption n

business agreement" there is a presumption that

the parties intend to enter into contractualrelationship* to enforce the contract n social*

domestic agreement" it is implied that no legal

relations are contemplated but these

presumptions are rebuttable proven otherwise

INTENTION TO CREATE LEGAL

RELATIONS


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Every person is competent to contract who

is of the age of ma9ority" who is of sound

mind" is not disAualified from contracting

from any law to which he is sub9ect

CAPACIT$ TO CONTRACT S 11


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'ge of 3a9ority 'ct 4F4 4@ years Effect of contract by minor VO0

3ohori 8ibee v$ 0harmodas Ghose (contract

by an infant is void) E>ceptions S ? mattersrelating to marriage" divorce" dower and

adoption eligion and religious rites of

persons within 3alaysia

CONTRACT #$ MINOR


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E


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Scholarships nsurance

nsurance 'ct4HI %' minor over the

age of 46 may enter into a contract of

insurance but if he is under 4H" the written

consent of parent or guardian is needed&


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S 42 Contracts 'ct ' person is said to be

of sound mind for the purpose of ma#ing

the contract" if at the time when he ma#es

it" he is capable of understanding it and offorming a rational 9udgment as to its effect

upon his interest$

' person usually suffering from mentaldisorder may ma#e a contract during

those periods when he is sound

SOUND MIND


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' person who is usually of sound mind"

but occasionally of unsound mind" may

not ma#e a contract when he is of

unsound mind


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YOUR FUTUREBEGINS

HERE

/erms in the contract must be certain if the

terms are uncertain" not capable of being

made certain the agreement is void

unenforceable 'li offers to sell to 8 hishouse for 356"666 or 3F6"666 466 #g

of flour (what #ind of flour)

CERTAINT$


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YOUR FUTUREBEGINS

HERE

Valid contract Contractual obligations"

legal remedies in the case of breach

voidable contracts can affirm or

repudiate the contract void contracts cannot be enforced in the court of law

LEGAL EFFECTS OF CONTRACTUAL

RELATIONSHIP


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YOUR FUTUREBEGINS

HERE

f fulfil all the elements of contracts offer

and acceptance considerations legal

capacity of parties intention to create legal

obligations certainty

VALID CONTRACTS


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YOUR FUTUREBEGINS

HERE

coercion (threat)

undue influence

fraud (any act to induce another party toenter a contract)

misrepresentation (true* false statement)

mista#e

VOIDA#LE CONTRACTS


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YOUR FUTUREBEGINS

HERE

.ot enforceable by law s 2? the

consideration or ob9ect of an agreement is

lawful unless: forbidden by law if

permitted" would defeat any law fraudulentimplies in9ury to a person or property of

another court regard it immoral or

opposed to public policy

VOID AND ILLEGAL CONTRACTS


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YOUR FUTUREBEGINS

HERE

Valid contract breach of contract actions in

court order of court rescission damages

specific performance in9unction

LEGAL REMEDIES


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YOUR FUTUREBEGINS

HERE

S F5 a party who has the right to rescind

the contract can see# legal redress

damages* compensation for any damage

sustained /ype of damages pecuniarylosses non pecuniary losses

DAMAGES


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YOUR FUTUREBEGINS

HERE

,asted e>penditure ;oss of profits (if the

contract had been performed)

PECUNIAR$ LOSSES


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YOUR FUTUREBEGINS

HERE

/he damages granted for disappointment"

distress

NON PECUNIAR$ LOSSES


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YOUR FUTUREBEGINS

HERE

' decree of the court directing that a

contract* certain act should be performed

specifically" according to its terms (original

terms)

Specific elief 'ct 456 s 44 ,hen the

contract agreed to be done is in theperformance" wholly or partly of a trust

SPECIFIC PERFORMANCE


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YOUR FUTUREBEGINS

HERE

llustration ' holds certain stoc# in trust for

8$

' wrongfully disposes of the stoc#$

/he law creates an obligation on ' torestore the same Auantity of stoc# to 8

and 8 may enforce specific performance

of this obligation


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YOUR FUTUREBEGINS

HERE

estrain from doing unlawful act

/emporary in9unction for specified time or

until the order of the court to preserve

status Auo of the parties can be granted atany time by order of court$


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YOUR FUTUREBEGINS

HERE

!erpetual in9unction permanent order granted by

the degree made at hearing upon merits of the

suits" defendant perpetually en9oined from the

assertion of the right" from commission of an act

E>amples 3areva n9uction prevent the

defendant from removing assets from within the

9urisdiction 8838 v$ ;orrain Osman


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YOUR FUTUREBEGINS

HERE

DISCUSSION 1:

0iscuss your e>perience relating to

contract entered by your

company*institution$

Dow do you solve the problems relating to

the said contract -


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YOUR FUTUREBEGINS

HERE

DISCUSSION 2: (EJE !'!E) C'SE S/K0L Case 4 C';;; V$

C'8O;C S3OE 8';; CO M4@IN 4 8 25H J'C/S: /he defendants"

who were the proprietors and vendors of a medical preparation called /he

carbolic Smo#e 8all+ inserted in the !all 3all GaPette of .ovember 4I"

4@4" and in other newspapers" the following advertisement: 466 reward will

be paid by the Carbolic Smo#e 8all Company to any person who contracts

the increasing epidemic influenPa" colds" or any disease caused by ta#ing

cold" after having used the ball three times daily for two wee#s according to

the printed directions supplied with each ball$ 4666 is deposited with the

'lliance 8an#" egent Street" showing our sincerely in the matter$& /he

plaintiff" a lady" on faith of this advertisement" bought one of the balls at a

chemist+s" and used it as directed" three times a day" from .ovember 26"4@4" to =anuary 4F" 4@2" when she was attac#ed by influenPa$ /he

plaintiff" upon refusal of the defendants to honour their promise" proceeded

to sue them$ Consider the above case in relation to offer" acceptance and

invitation to treat$


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YOUR FUTUREBEGINS

HERE

D&s'(ss&)*+: E/DC'; SSKE ' too# his

son to 8" a doctor" and as#ed 8 to operate

on the son+s hand$ 8 said that the boy

would be in the hospital I or ? days 7 thatthe hand would probably heal a few days

later$ /he son+s hand did not heal for a

month$ :,ould ' succeed in the legalsuit against 8- s this legal suit ethically

brought up-


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YOUR FUTUREBEGINS

HERE

': 8 did not ma#e an offer to heal the

son+s hand in I or ? days$ De merely

e>pressed an opinion as to when the hand

would heal$ 'n opinion is not an offer 7not a contract term$ Goods or services can

be perfect+ in one party+s opinion 7 poor+

in another+s$


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YOUR FUTUREBEGINS

HERE

case ?: '0'3S V$ ;.0SE;; (4@4@) 4 8E ';0

H@4 J'C/S: /he plaintiffs were woolen

manufacturers in ,orcestershire$ /he

defendants were wool dealers in Duntingdon$ On2nd Sept 4@4F" defs wrote to ptfs offering to

supply wool to ptfs and reAuiring an answer in

course of post$ /his letter was misdirected with

the result that it did not reach the ptfs until 5thSept$ /he same evening ptfs posted a letter of

acceptance$ /his letter was delivered to the 0efs

on th Sept$ on @th SeptQ the defendants had

sold their wool to third parties$


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YOUR FUTUREBEGINS

HERE

/he vital Auestion was whether a contract for the

sale of wool had come into e>istence before

Sept$ @th" the date that the defs had sold the

wool to the Ird party$

/hree possible options were open to the court$

/hey could say that the defs offer was accepted

by the ptfs when: /he ptfs posted it on the 5th,hen the ptfs letter was delivered to the defs

address on th" or ,hen that letter was brought

to the actual notice of the def$


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YOUR FUTUREBEGINS

HERE

case 5: 8L.E V V'. /E.DOVE. (4@@6) 5

C$!$0$ I?? 4 October" def posted letter of offer in

Cardiff to the ptf in .ew Lor#$ @ October" def

posted a letter revo#ing the offer of October 4$44 Oct" ptf received the letter of offer posted on

October 4 and sent acceptance by telegram the

same day$ t also followed up with letter of

acceptance on 45 October$ 26 October:defendant+s letter of revocation received by

plaintiff$


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YOUR FUTUREBEGINS

HERE

uestion: Das a revocation any effect until

communicated- 0oes the posting of a

letter of revocation amount to a

communication to the person to whom theletter is sent-


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YOUR FUTUREBEGINS

HERE

Case H /DE O0' C'SE J'C/S: Early in 2662" oda# refused

to honour orders for digital camera advertised on their retail website

at 466 pounds" denying that an automated response to customers

confirming confirmation of their orders constituted an acceptance of

their 466 pounds offer$ oda# claimed the price was a mista#e and

should have been I2 pounds$ Several hundred consumers werebelieved to be affected and had been threatening legal actions

against oda# unless their contract were honoured$ oda#+s

defense: /heir standard terms on the site" which were the terms of

sale which state oda# had a right to change the content of the

website at any time including prices$ /he defence of mista#e inEnglish ;aw which ma#es a contract void /he display of price

mar#ed goods wherever the display is" is not an offer to sell goods

but" is an invitation to a customer to ma#e an offer to buy an

invitation to treat)$ Dow would you decide the above case-


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YOUR FUTUREBEGINS

HERE

DISCUSSION , Contracts via internet:

uncertainties- when- whether there is

an offer R acceptance- what rules to be

applied instantaneous * postal rule-


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YOUR FUTURE BEGINS

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