Law of Contract

Question 1

To form an agreement enforceable by law, the following elements must exist:

Answer 1

I. Proposal / Offer
II. Acceptance
III. Consideration
IV. Intention to create legal binding relation
V. Capacity to contract

Question 2

What is a bilateral contract?

Answer 2

A bilateral contract is an agreement between at least two people or groups.

Question 3

_____________ defines an offer as the readiness of the person who makes the offer to create a legal relation and to be bound by the law, with the terms of the proposal are agreed upon by the acceptor.

Answer 3

S 2(a) of the Contracts Act 1950

Question 4

The supporting case for offer is __________.

Answer 4

Carlill v The Carbolic Smoke Ball Company

Question 5

Define Invitation to Treat.

Answer 5

It is a mere declaration of willingness to enter into negotiations; it’s not an offer, and cannot be accepted as a form of a binding contract.

Question 6

The supporting case for Invitation to Treat is __________.

Answer 6

Partridge v Crittenden

Question 7

Termination of offer can be done by :

Answer 7

• Acceptance
• Rejection
• Counteroffer
• Revocation of Offer

Question 8

When the proposer communicated the revocation of the proposal to the other party before its acceptance.

Answer 8

S6 (a) Contracts Act 1950

Question 9

By lapse of time prescribed in the proposal for its acceptance.

Answer 9

Ramsgate Victoria Hotel v Montefiore

Question 10

Where the acceptor fails to fulfil a condition precedent to acceptance.

Answer 10

S6 (c) Contracts Act 1950

Question 11

___________ provides “when the person to whom the proposal is made signifies his assent thereto, a proposal is said to be accepted: a proposal, when the accepted becomes a promise”

Answer 11

S2(b) Contracts Act 1950

Question 12

____________ provides “the acceptance must be expressly in some usual and reasonable manner communicated”

Answer 12

S7 (b) Contracts Act 1950

Question 13

Can silence amount to acceptance?

Answer 13

No

Question 14

Where the use of the post is in the contemplation of the parties; the acceptance is complete as soon as a letter is posted with a duly written address of the offeror and dropped in the post box.

Answer 14

Postal Rule

Question 15

Define Intention to create legal relation

Answer 15

Any agreement made between the parties will only become a binding contract if both parties intend to make the contract enforceable

Question 16

Name any 3 cases pertaining to Intention to create legal relation

Answer 16

I. Balfour v Balfour
II. Merritt v Merritt
III. Edwards v Skyways Ltd
IV. Jones v Vernon’s Pools ltd
V. Rose and Frank co v Crompton (JR) & Brothers

Question 17

Consideration is defined as a promise where each party to the agreement must receive benefit and detriment is provided in _____ .

Answer 17

Section 2(d) of Contracts Act 1950

Question 18

Executor consideration is defined as _________.

Answer 18

when one promise is made in return for another promise

Question 19

Supporting case for past consideration is ___________

Answer 19

Kepong Prospecting Ltd & S.K. Jagathesan v Schmidt & Marjorie Schmidt

Question 20

_____________ provides that any agreement which is made without consideration is still valid if it is expressed in writing and registered under the law for the time being in force for the registration of such documents, and is made on account of natural love and affection between parties standing in near relation to each other

Answer 20

S26(a) Contracts Act 1950

Question 21

Supporting case for S26(a) Contracts Act 1950 is _________

Answer 21

Re Tan Soh Sim

Question 22

Supporting case for adequacy of consideration

Answer 22

Phang Swee Kim v Beh I Hock

Question 23

Privity of Contract supporting case ______.

Answer 23

Dunlop Pneumatic Tyre Co Ltd v Selfridge Co ltd

Question 24

Every person is competent to contract must be above 18 and of sound mind

Answer 24

S.11 Contracts Act 1950

Question 25

Define S 69 Contracts Act 1950

Answer 25

i. The necessaries have been supplied to the minor
ii. The minor is also liable for necessaries supplied to his dependents
iii. The supplier of necessaries can only claim for reimbursement (reasonable price)
iv. The minor is nor personally liable and this means he is liable to pay only if he has the property to do so.
v. Necessary – required by the minor like food, shelter, clothing etc

Question 26

The supporting case for S 69 Contracts Act 1950

Answer 26

i. Roberts v Gray
ii. Nash v Inman
iii. Fawcett vs. Smethurst

Question 27

S13 of the Children and Young Persons (Employment) Act 1996

Answer 27

allows a minor to enter into a contract of services provided it benefits the minor

Question 28

Any agreement with a mentally insane person, the agreement will be ______.

Answer 28

void

Question 29

A contract can be discharged by:

Answer 29

• agreement
• performance
• frustration
• breach

Question 30

Supporting case for Discharge by performance

Answer 30

Chua Ngah Chin V Ng Kie En

Question 31

_____________ provides, ‘After the contract is made, to do the act becomes impossible or because of some event, the contract becomes frustrated and void

Answer 31

S57(2) Contracts Act 1950

Question 32

Supporting case for discharge by frustration

Answer 32

Taylor v Caldwell & Berney v Tronoh Mines Ltd

Question 33

Supporting case for discharge by breach

Answer 33

Paradine v Jane

Question 34

Hadley v Baxendale (1854) laid down the test on the remoteness of damages, which are:

Answer 34

 Rule of remoteness
 Rule of mitigation

Question 35

The types of damages are

Answer 35

✓ Substantial damages
✓ Nominal damages

Question 36

Quantum meruit supporting statute

Answer 36

S71 Contracts Act 1950

Question 37

Types of injunction

Answer 37

i. Prohibitory injunction
ii. Mareva injunction

Question 38

____________ provides that an agreement without consideration is valid if it is a promise to pay wholly or in part a debt

Answer 38

S26(c) Contracts Act 1950

Question 39

Age of Minority Act 1971 supporting case is _____.

Answer 39

Rajeswary & Anor v Balakrishnan & Ors

Question 40

Contract of Scholarship supporting case ….

Answer 40

Government of Malaysia v Gurcharan Singh & Ors