Contrac Law
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Transcript of Contrac Law
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YOUR FUTUREBEGINSHERE
CONTRAC
T Law
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YOUR FUTUREBEGINSHERE
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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YOUR FUTUREBEGINSHERE
Offer
acceptance the offer
Consideration ntention to create legal relations
Capacity to contract Consent
Certainty
ELEMENTS OF CONTRACT
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YOUR FUTUREBEGINSHERE
!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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YOUR FUTUREBEGINSHERE
!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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YOUR FUTUREBEGINSHERE
!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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YOUR FUTUREBEGINSHERE
!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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YOUR FUTUREBEGINSHERE
!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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YOUR FUTUREBEGINSHERE
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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YOUR FUTUREBEGINSHERE
!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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YOUR FUTUREBEGINSHERE
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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YOUR FUTUREBEGINSHERE
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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YOUR FUTUREBEGINSHERE
;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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YOUR FUTUREBEGINSHERE
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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YOUR FUTUREBEGINSHERE
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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YOUR FUTUREBEGINSHERE
'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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YOUR FUTUREBEGINSHERE
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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YOUR FUTUREBEGINSHERE
/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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YOUR FUTUREBEGINSHERE
' 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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YOUR FUTUREBEGINSHERE
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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YOUR FUTUREBEGINSHERE
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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YOUR FUTUREBEGINSHERE
/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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YOUR FUTUREBEGINSHERE
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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YOUR FUTUREBEGINSHERE
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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YOUR FUTUREBEGINSHERE
'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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YOUR FUTUREBEGINSHERE
E
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YOUR FUTUREBEGINSHERE
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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YOUR FUTUREBEGINSHERE
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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YOUR FUTUREBEGINSHERE
' 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
END OF THE TOPIC