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The respondents purchase homes off the plan to be constructed bythe appellants.-
Each of the respondents had signed a sale and purchase agreement topurchase a house at $29,500.
Subsequently, the respondent was madeto pay an additional payment was made to pay an
additional $4,000.Held:-
The court was asked to determine if the additional payment wasmade voluntarily or under threat by
the appellants to cancel therespondent
The appeal dismissed by the High Court which ruled that there wascoercion as defined in section 15
of the Contract Act. It further addedthat the definition in section 15 should only apply for the
purposecontained in section 14, and not for the entire Act.
SECTION 15 : COERCION
coercion is the committing or threatening to commit any act forbidden by the Penal Code or the unlawful
detaining or threatening to detain any property to the prejudice of any person whatever with the intention of
causing any person to enter into an agreement
committing or threatening to commit any act forbidden by the Penal Code
Visu Sinnadurai J in Teck Guan Trading Sdn Bhd v Hydrotek Engineering (S) Sdn Bhd:
Section 15 limit the wrong or threatened wrong to crimes under Penal Code aloneacts which are offences
other than it or merely a civil wrong will not amount to coercion
unlawful detaining
Facts: Defendant argued that Plaintiff refused to supply with price at $1180 amounted to unlawful detention of
property in order to make Plaintiff agreed for $1244 as the price
Held: this transaction did not amount to coercion because plaintiff exercised its legal right over its own property.
EFFECT OF COERCION
1. S19(1) an agreement is caused by coercion .. the agreement is a contract VOIDABLE at the option of the
party whose consent was so caused
2. S73 a person to whom money has been paid or anything delivered under coercion must REPAY or
RETURN it
Illustration (b) a railway company refuses to deliver certain goods to the consignee except upon the payment
of an illegal charge for carriage. The consignee pays the sum charged in order to obtain the goods. He is entitled
to recover so much of the charge as was illegally excessive
Chin Nam Bee Development Sdn Bhd v Tai Kim Choo & 4 Ors [1988]2 MLJ 117
R purchased houses from As house whereas additional sum of RM4,00 had paid to cancel their booking for the
house. R claimed the refund for additional payment as it was under a threat of A.
Held: the claim was allowed because it was made under coercion.