ASSIGNMENT

LAW436
LAW OF CONTRACT 1
MARKS: 15%
Instructions:
1) You may work in pairs for this assignment.
2) Deadline: 30/11/2012
3) You should support your answer with relevant cases and provisons from the
Contract Act 1950
4) You must refer to at least THREE books for this assignment (please state the
references at the end of your discussion)
5) Please submit to myDrawer.
Daniel is the leader of a newly-formed political party called 'Freedom1. Recently, he held
an.open-air rally in KLCC Park to promote and publicize the party to the public.
Two days before the rally, Daniel entered into a contract with Veera Catering to provide
catering facilities at a cost of RM6,000.00. Meanwhile, Berry, a good friend of Daniel,
voluntarily agreed to decorate the park for the preparation of the rally.
Similarly, Daniel said to his daughter, Faith, that she would be given a new hand phone if
she helped him in the management of the rally.
During the rally, due to the unexpectedly large crowd, Daniel promised to pay a bonus of
RM?000.00 to Veera Catering if they managed to ensure the smooth running of the rally.
Daniel was impressed with Berry's work and agreed to give him RM250.00,.
The rally was a success but Daniel refused to pay Veera Catering a bonus of RMI
000.00.
Answer the following in the light of the facts above:
Is Veera Catering entitled to a bonus of RM1000.00?
(I0marks)
Can Daniel refuse to give RM250.00 to Berry?
(15 marks)
Faith assisted her father in managing the rally but he has now refused to give her the
hand phone. Advise Faith.
(5 marks)
(Total : 30 marks)

QUESTION 1
The issue is whether Veera Catering is entitled to a bonus of RM1,000.00?
In this situation, Veera Catering is entitled to a bonus of RM1,000.00 as Daniel had
promise to pay them if they managed the rally smoothly running. The Rally was succeed
but Daniel refuse to pay.
Therefore, Veera catering is entitled because by referring to Section 9 of Contract Act
1950 Promises, express and implied. It stated that so far as the proposal or
acceptance of any promise is made in words, the promise is said to to be express. So far
as the proposal or acceptance is made otherwise than in words, the promise is said to be
implied.
Refer to that situation: if the Rally is succeed, Daniel will pay the bonus of RM1,000.00.
Definately the Rally was succeed, Veera Catering had made acceptance by act or
conduct not by words.
Besides that Section 8 of Contract Act stated that, Performance of the conditions of
a proposal, or the acceptance of any consideration for a reciprocal promise which
may be offered with a proposal is an acceptance of the proposal.
Refer to the case of Carlill v. Carbolic Smoke Ball. Carbolic Smoke Ball Co. (D)
manufactured and sold The Carbolic Smoke Ball. The company placed advertisement in
various newspapers offering a reward of 100 pounds to anyone who would still succumb
to influenza after using a certain product according to the instructions for a fixed period.
The plaintiff read the advertisement and used the product accordingly but still contracted
with influenza. He claimed the 100 pounds from the defendants.
The defendants urged that the advertisement was vague and also that it was
unreasonable to suppose it to be definite offer.
The Court Held that; the argument of the defendant was rejected because it was
sufficiently definite and intended to be understood by the public as an offer which was to
be acted upon. It was further urged that there was no notification of the acceptance.
Otherwise, there need be no acceptance of the offer other than performance of the
condition.
Refer to the fact and the case situation, definitely Veera Catering as the Daniel propose
to pay bonus of RM1,000.00 if they measure the Rally succeed. When the Rally was
succeed, then Veera Catering definitely had made an acceptance by performing
condition of proposal.
Therefore, Veera Catering is entitled to have the bonus of RM1,000.00.

QUESTION 2
The issue is can Daniel refuse to give RM 250.00 to Berry?
According Section 26 of Contract Act 1950, stated that an agreement without
consideration is void unless:a) It is in writing and registered
It is expressed in writing and registered under the law (if any) 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 a near relation to each other;
b) Or is a promise to compensate for something done
It is a promise to compensate, wholly or in part, a person who has already
voluntarily done something for the promisor, or something which the promisor was
legally compellable to do; or
c) Or is a promise to pay a debt barred by limitation law
It is a promise, made in writing and signed by the person to be charged therewith,
or by his agent generally or specially authorized in that behalf, to pay wholly or in
part a debt of which the creditor might have enforced payment but for the law for
the limitation of suits.
In any of this cases, such an agreement is a contract. In this issues, we can relate it with
the b cases. Therefore, the contract exist between them.
Under Section 26, Illustration (c) : A finds Bs purse and gives it to him. B promises to
give a RM50. This is a contract.
Refer to the case of J.M Waterspoon & Co ltd v. Henry Agency House, there were
promises of compensation made by the defendant to the plaintif in respect of pass act.
However these promises were not supported by consideration. So, those promises could
only be legally enforceable if it is a promise to compensate a person who has already
voluntarily done something for the promisor. This is accordance with Section 26(b).
The Court held that voluntarily means the acts performed or done by ones own free will
impulse or choice and not constrain, prompted or suggested by another. In this case, the
plaintif had acted on the suggestion of the defendant. So the plaintif action could not be
said to have been done voluntarily. Therefore, the promise made by the defendant to
compensate the plaintif was not an enforceable contract within the exception of Section
26(b).
In order to apply the provision of Section 26(b) it is necessary that
(i)

The service should have been rendered in the past;

(ii)

It should have been rendered voluntarily

(iii)

It should have been for the promisor and not for any other person

(iv)

There should be a subsequent to promise to compensate wholly or in part.

Further, the act voluntarily done must have been done for a promisor who was in
existance at the time when the act was done.
Therefore, Daniel is bound to give Berry RM 250.00 as he was impressed Berrys work in
decorated the park and made promise to pay Berry RM 250.00.

QUESTION 3
Faith assisted her father in managing the rally but he has now refused to give her the
hand phone. Advise Faith.
The issue is whether Faith can claim for the handphone or not?
Refer to Section 26 (a) of Contract Act 1950, stated that an agreement made without
consideration is void unless it is in writing and registered. It is expressed in writing and
registered under the law (if any) for the time being in force fo the registration of such
documents, and is made on account of natural love and affection between parties in
standing in a near relation to each other.
Under Section 26 Illustration (b) : A, for natural love and affection, promises to give his
son, B, RM1,000.00. A puts his promise to B into writing and registers it under a law for
the time being in force for the registration of such documents. This is a contract.
The validity of this contract is dependent upon the following conditions:1. It is expressed in writing which maybe in any reasonable form
2. It must be registered if any law required it
3. It is made on the account of natural love and affection between parties standing in
near relation of each other.
Therefore in this issues, there is no valid contract existed between them because it is not
expressed in writing. Faith cannot claim for the hand phone from his father.

REFERENCES
1) Contracts Act 1950 (Act 136), Contracts (Amendment) Act 1976 (A 329) &
Governemnet Contracts Act 1949 (Act 120).
2) Law of Contract (Principles and Practice) Dr. V.K. Agarwal.
3) Internet Sources.