Chapter 2: law of contract

1.       A contract is an agreement, which legally binds the parties.

2.       Referred as enforceable agreement.

3.       In Malaysia: Contract Act 1950.

4.        Essential elements of a contract.

o   Result of offer and acceptance.

o   Contains consideration

o   Parties’ intent to create legal relations.

5.        Validity of contract

o   Capacity : children have limited capacity to sign a contract

o   Form : verbally and writing

o   Content : generally agree any term

: Term must be reasonable, precise and complete.

6.       Offer

o   An expression of willingness to do or abstain from doing anything with a view to act or abstinence.

o   Can be made orally, written or implied

o   2 types: bilateral offer: offer made to a specific person / group of person.

                                   : unilateral: offer that is made to the world at large

o   Can either accept or to reject.

7.       Acceptance

o   May be in writing or oral form.

o   Must be communicated by the offeree by someone with its authority.

o   May be expressly or implied prescribe the method of communicating acceptance.

8.       Consideration

o    A promise is only legally binding if it is made in return for another promise or an act.

o   Type of consideration:

·         Executor consideration: contains mutual promises.

·         Executed consideration: the consideration for the promise is a performed.

·         Past consideration: consideration performed before any promise of reward.