A Problem Question on Contract Law

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Introduction A contract refers to an agreement between two or more parties which is legally binding in the eyes of the law. Based on Contract Act 1950, section 2 (h), an agreement that is enforceable by law is a contract. Any other agreements that is not enforceable by law is said to be void, section 2 (g). Therefore, section 2 (j) a contract which is ceases to be enforceable by the law becomes void when it ceases to be enforceable. A contract consists of 6 elements which is proposal (section 2) and acceptance (section 7). The agreement made must be certain and lawful to fulfill the requirement of entering a contract. The consideration (section 26) of a contract have to be in price theory or the benefit and detriment theory. Next, certainty (section 30) said that the terms and agreements of a contract need to be certain and clear. Besides that, all party in the contract have to be free consent, section 10. Lastly, section 11 capacity said that minors, person that disqualified from contracting by any law and unsound mind are not competent to enter a contract. Ah Beng Ah Beng wished to sell his 3-year old motorcycle. He have the intention to create legal relations, commercial contract. In a business contract the presumption is that there is an intention to create legal relations. Unlike domestic contract where agreement made between parties are stated as no intention to create such a legal relations. For example, agreement between spouses, between parent and child and agreements between friends. Case law Balfour v. Balfour. The husband promised to pay a monthly allowance as maintenance to his wife. The court held that it was not a legally enforceable agreement, the parties should be attended by legal consequences. According to section 2 (a), when one signifies to another his willingness to do said to make a proposal, Ah Beng is the offeror before he advertised the sale in a local newspaper. After the advertisement,he becomes an acceptor. Advertisement consist of two types of offer, Bilateral and Unilateral offer. Unilateral offer is a party (X) undertakes to do something is another party (Y) decides to accept by performing some lawful act specified by X. For instance, Carlill v. Carbolic Smoke Ball Co. Carbolic Smoke Ball company made an offer to the pubic by issuing an advertisement saying that whoever still suffered from influenza after taking their product (a drug) will get £ 100 in a specified manner and for a specified period of time. Mrs Carlill sued the company for the promise reward. The court held that the advertisement is an offer to the world. Referring to the Bilateral case law Majumder v. Attorney General of Sarawak 1967, a newspaper advertisement stated a medical officer war required and set out the salary scale. The Federal Court held that the advertisement in the newspaper for the post of a medical officer was an invitation to treat. Therefore the advertisement by Ah Beng is a Bilateral Contracts,

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