1. BUSINESS LAW
PRESENTATION
(LAW 3034)

2. Types of Contract
Void
Voidable
Unenforceable

3. Elements of contract
Offer
Acceptance
Intention to create legal relations
Consideration
Certainty
Capacity
Consent
Legality

4. Offer
 Section 2(a) of the Contract Act 1950
 Preston Corpn Sdn Bhd v Edward Leong& Ors. [1982] 2 MLJ
22
 Its terms and its addressee
 Carlil v Carbolic Smoke Ball & Co.Ltd[1893] 1 QB 256
 Medical firm advertised that its new wonder drug, a smoke
ball.
 Mrs Carlil used the product and still caught influenza, she
sued.
 Held: an offer can be made to the world. In this case, there
was an acceptance of the offer by the plaintiff‟s conduct,
 Affin Credit (Malaysia) Sdn. Bhd v Yap Yuen Fui [1984] 1 CLJ
62
 Raffles v Wichelhaus [1864] 2 H & C 906
 Ahmed Meah & Anor v Nacodah Merican(1890) 4 KY 583.
 There was an offer in this scenario because of Always Hot
Sellers Bhd and Inferno Sdn. Bhd had given an offer to
Inferno Sdn.Bhd.

5. Acceptance
 Under Section 2 (c) of the Contract Act 1950 state that calls
the person accepting the proposal the “promisor”.
 Acceptance must be communicated; the offeror cannot impose
terms on the offeror or stipulate that silence will amount to
acceptance.
 Felthouse v Bindley (1862) 11 CBNS 689
 Lau Brothers & Co v China Pacific Navigation Co. Ltd (1965) 1
M.L.J.1
 Hyde v Wrench (1840) 49 ER 132
 Malayan Flour Mills Bhd v Saw Eng Chee & Anor [1997] 1 MLJ
763 HC
 Based on the scenario, there was an acceptance apply in the
process. If there wasn't acceptance exist in the process. Inferno
Sdn. Bhd would hadn't purchased oven and figured out the oven
couldn't achieve the temperature as the party has claimed.

6. Consideration
 Section 2(d)of the Contract Act 1950
 Valuable consideration
 „something for something‟
 Three types of consideration
 (i) executory consideration
 (ii)executed consideration
 (iii)past consideration
 Chappell & Co Ltd v Nestle Co Ltd [1960] AC 87
 Nestle purchaed single record of song, which is copyright owned by
Chappell & Company
 Nestle offered a record to customers who sent a certain hunber of
chocolate bar wrapper
 Chappell sued and he offered for not only 1sh 6d but 1sh 6d and
three chocolate wrappers
 Nestle argued that the three wrappers were not part of the
consideration
 Held: The court held that the wrappers were part of the
consideration for the chocolates although they were immediately
discarded when received.

7.  Phang Swee Kim v Beh I Hock [1964]MLJ 383
 Thomas v Thomas [1842] 114 ER 330
 Stilk v Myrick [1809] EWHC KB J58
 In this scenario, there was a consideration. Both parties
are willing to receive a benefit and suffers a detriment.

8. Intention to create legal relation
 An agreement supported by consideration
 Intention of a party to become legally bound
 Participants to an agreement intended the agreement
to be legally enforceable
 Domestic and social life agreement
 Do not intend to create legal relation
 Balfour v Balfour [1919]2 KB 571
 Mr. Balfour had promised to pay her wife £30 a month
for maintenance during the time they were live apart.
 After they separated, Mrs. Balfour sued him breach of
agreement
 Held: The court held that no legal relations had been
contemplated and that the wife‟s action must failed.
 Pettitt v Pettitt [1970] AC 777
 Jones v Padavatton [1968] EWCA Civ 4

9.  Commercial and Business agreement
 Intended to created legal relations
 Rose and Frank Co v Crompton Bros[1925] AC 445
 Snelling v John G Snelling Ltd[1973] QB 87
 In this scenario, there was an intention to create
relations. Both parties had provide the consideration
and had made an agreement.

10. Capacity
 Section 11 of the Contract Act 1950
 Prima facie the law assumes that all parties to a contract have the
power to enter into that contract
 Under the Age of Majority Act 1971
stated that every person is competent to contract who is of the age
majority according to the law to which he is subject
 Mohori Bibee v Dhurmodas Ghose (1903) 30 IA 114
 And been adopted and applied in Malaysia in the case Tan Hee Juan v
The Boon Keat [1934] FSMLR 36
 The court held that plaintiff who is a minor transfers of land by minor
is said to be void.
 contract for necessaries under Section 69 of the Contract Act 1950
 Imperial Loan v Stone [1892] 1 QB 599
 Government of Malaysia v Gurcharan Singh @ Ors [1971] 1 MLJ
211HC
 In the scenario, there was no capacity. Both companies are mature
enough to do business on their own risks.

11. Certainty
 Section 30 of the Contract Act 1950
 Every term of an agreement must be certain or
capable of being ascertained. If not, the contract
may be void.
 Hillas & Co. Ltd v Arcos Ltd [1932] 38 Com Cas 23
 the fact is there was an agreement in writing for the
wood during 1930, together with an option
 There was a certainty apply in this case, because
Always Hot Sellers Bhd agreed to sell and given a
guarantee that the oven would have a temperature
of not lower than 1500º c.

12. Legality
Section 24 of the Contract Act 1950 state
that the consideration or object of an
agreement is unlawful if falls within any of
the subsections of the section.
Based on the scenario, there was legality.
During the whole process, they were
dealing in proper way and doing legal
business which selling cooking oven.

13. Consent
 Section 10 of the Contract Act 1950 states that
consent must be freely given
 Section 13 of the Contract Act 1950 defines
consent to mean two or more persons are said to
consent when they agree upon the same thing in
the same sense
 Section 14 of the Contract Act 1950 states that
consent is free when it is not caused by one or
more of the following:
 Coercion
 Undue influence
 Fraud
 Misrepresentation
 Mistake

14. Misrepresentation
 Section 18 of the Contract Act 1950 states that
misrepresentation is an untrue statement of fact
 A statement made without the intention to perform
 A statement of fact if the maker of the statement did not hold
it
 Derry & Ors v Peek (1889) LR 14 App Cas 337
 Nocton v Lord Ashburton [1914] AC 932
 Hedley Byrne & Co Ltd v Heller & Partners Ltd[1964] AC 465
 In this scenario, there was a misrepresentation because of
Always Hot Sellers Bhd is a public limited company for doing
business which they were authorized to transact and it is
professed to sell its products. On the other hand, which a
reasonable man would know that it was being trusted or
judgment was being relied on. However, it transaction object is
corporation company. Which is not good for it if it is the
intention to be cheat.

15. Mistake
 Section 21 of the Contract Act 1950
 Where both parties to an agreement are under a
mistake as to a matter of fact essential to the
agreement, the agreement is void.
 Mistake as to identify of the subject-matter
 Falck v Williams [1990] AC 176
 In this scenario, there was a mistake as to the
identify of the subject-matter when Always Hot
Sellers Bhd had given a guarantee that the oven
would have a temperature of not lower than
1500ºc. However, Inferno Sdn.Bhd received the
oven, it could not be reach a temperature of
1000ºc, so the mistake occurred on Always Hot
Sellers Bhd.

16. Remedies
 Damages under Section 74 of the Contract Act 1950
Defines as compensation for damages, loss or injury he has suffered
through a breach of contract.
 Can divided into 2 parts:
(i) Remoteness
 Hadley v Baxendale [1854] EWHC J70
The court held that the jury awarded of £25.
 Victoria Laundry ( Wisdsor ) Ltd v Newman Industries Ltd [1949] ALL
ER 997
(ii) Measure of damages
 Payzu v Saunders [1919] 2 KB 581
The court held that the plaintiff had permitted himself to sustain a large
measure of the lost which, as prudent and reasonable people, they ought
to have avoided.
 East Asiatic Co Ltd v Othman [1966] 2 MLJ38
 Based on the scenario, there was remedies for damages. Since Always
Hot Seller Bhd has given a guarantee that the oven would have a
temperature as they claim but it wasn't able to achieve the temperature.
So inferno Sdn Bhd has a very reasonable to sue for damages and claim
what they desire to get from that incident.