UNIVERSITI TUN HUSSEIN ONN MALAYSIA

86400, PARIT RAJA, BATU PAHAT,

JOHOR DARUL TAKZIM

CONTRACT AND ESTIMATION

BFC31602

EN.MOHD SUFYAN BIN ABDULLAH

PN.EMEDYA MURNIWATY BINTI SAMSUDIN

SECTION 2

NAME MATRIC NUMBER

MOHD.KHAIRIL AMRI BIN KAMARUZAMAN AF120162
MUHAMMAD FIRDAUS BIN MD YASIN AF120036
MUHAMAD AIMAN BIN ABD RASHID AF120101
ASMAHANI BINTI BARJOK AF120086
NOORATIQAH BINTI MOHD ZIN AF120119
NORFATIHIN BINTI NOORLISAM AF120145
NO. CONTENT PAGE
01 QUESTION 1
02 -INTRODUCTION
03 -FIRST ISSUE
04 -SECOND ISSUE
05 -THIRD ISSUE
06 -CONCLUSION
07 QUESTION 2
08 -INTRODUCTION
09 -FIRST ISSUE
10 -SECOND ISSUE
11 -THIRD ISSUE
12 GENERAL CONCLUSION
13 REFERENCES
14 ATTACHMENT
QUESTION 12:

Azlan and Yusuf agreed to sell and buy a piece of land. The land was identified, its area was
noted, the price was settled, and the parties also agreed on the mode of payment. This agreement
was later written down and one of the clauses stated that the agreement was a provisional one
subject to the approval of the lawyers of the respective parties. When the lawyer of Azlan
completed the documents of sale after approval and sent the same to Yusuf, the latter refused to
sign the document relating to sale. Is there an enforceable contract between the parties?

INTRODUCTION:

Referring to the question above, the issue is whether legal contract occur between Azlan and
Yusuf. This issue is important and is usually occur during forming a contract that involves offer,
acceptance, consideration, intention to create legal relations and others.

Therefore, issues that are to be discussed based on the question above are as follows;

a) Is communication between Azlan and Yusuf is completed?

b) Payment has not been made.
c) Is the agreement can be enforceable by law?
 FIRST ISSUE:

Is communication between Azlan and Yusuf is completed?

Related laws:

 Section 4 - Communication, when complete

Section 4(1) - The communication of proposal is complete when it comes to the
knowledge of the person whom it is made.
Section 4(2) – The communication of an acceptance is complete
Section 4(2)(a) – As against proposer, when it is put in a course of transmission to him,
so as to be out of the power of the acceptor.
Section 4(2)(b) – as against the proposer, when it comes to the knowledge of the
proposer.
 Section 5(2) – An acceptance may be revoked at any time before the communication of
the acceptance is complete as against the acceptor, but not afterwards.
 Section 2(b) – when the person to whom the proposal is made signifies his assent thereto,
the proposal is said to be accepted: a proposal, when accepted, becomes a promise.

Application of laws:

Based on the case of selling and buying a piece of land between Azlan and Yusuf,
both parties agreed to sell and buy the land but after Azlan’s lawyer completed the documents,
Yusuf did not want to sign the documents. In this case, the contract of selling and buying is legal
because contract also can be made orally. But, Yusuf can cancel the contract as he has not signed
the documents to accept the agreement. Also, he has not pay for the land. This means that he can
cancel the contract without losing both parties.
Conclusion:

Based on section 2(b), Azlan’s proposal in writing form is not accepted by Yusuf. Thus,
communication between Azlan and Yusuf is completed because it came to Yusuf’s knowledge.
But, the contract is enforceable as Yusuf did not want to sign it.
 SECOND ISSUE:

Payment has not been made.

Related laws:

 Section 7 – Acceptance must be absolute. In order to convert a proposal into a promise

the acceptance must-
Section 7(a) - be absolute and unqualified.
Section 7(b) – be expressed in some usual and reasonable manner, unless the proposal
prescribes the manner in which it is to be accepted. If the proposal prescribes a manner in
which it is to be accepted, and the acceptance is not made in that manner, the proposer
may, within a reasonable time after the acceptance is communicated to him, insist that his
proposal shall be accepted in the prescribed manner, and not otherwise; but, if he fails to
do so, he accepts the acceptance.

Application of laws:

Based on the case of selling and buying a piece of land between Azlan and Yusuf,
both parties agreed to sell and buy the land but after Azlan’s lawyer completed the documents,
Yusuf did not want to sign the documents. In this case, the contract of selling and buying is legal
because contract also can be made orally. But, Yusuf can cancel the contract as he has not signed
the documents to accept the agreement. Also, he has not pay for the land. This means that he can
cancel the contract without losing both parties.
Conclusion:

Even though contract had been performed earlier by oral, but it was cancelled by act. Where
Yusuf choose to not sign the document of selling and buying and he also did not make any
payment.
 THIRD ISSUE:

Is the agreement can be enforceable by law?

Related laws:

 Section 2(i) – an agreement which is enforceable by law at the option of one or more of
the parties thereto, but not at the option of the other or others, is a voidable contract.

Application of laws:

Based on the above issue, Yusuf action is enforceable if he did not want to pursue
the contract as he has not sign the contract. The contract is enforceable by law if Yusuf fulfill all
the above elements.
 GENERAL CONCLUSION:

Communication is consider completed when an offeror and offeree have agreed in an

offer, where the offeror accept the communication of accepting the offer, and the offeree has sent
the message of acceptance to the offeror. A communication is considered not completed when
the offeror did not accept any communication of acceptance from the offeree, thus the
acceptance is considered cancelled.

A written contract has to fulfill two important regulations, which are (i) the terms of
agreement are recorded on the paper, and (ii) all the agreement of what the parties agreed to. If
any party disagree any of the content of the contract, they can choose to not to sign the contract.
Thus, the contract did not exist.

Contract means a promise between the promisor and the promisee with a legal
remedy. Based on section 7(b) Contracts Act 1950, an acceptance must be expressed in some
usual and reasonable manner, unless the proposal prescribes the manner in which it is to be
accepted. If the proposal prescribes the manner in which it is to be accepted, and the acceptance
is not made in that manner, the proposer may, within a reasonable time after the acceptance is
communicated to him, insist that his proposal shall be accepted in the prescribes manner, and not
otherwise; but, if he fails to do so, he accepts the acceptance. This situation is the same if the
promisee did not accept with a legal manner, therefore the contract is unenforceable.

Contract also did not exist if one of the party break the promise(s) where in Contract
Act 1950 in Section 10(1) all agreements are contracts if they are made by the free consent of
parties competent to contract, for a lawful consideration and with a lawful object, and are not
hereby expressly declared to be void. Therefore, if both promisor and promisee does not achieve
mutual rights, a contract cannot be form.
QUESTION 22:

Examine whether there is sufficient consideration to enforce the promises to enforce the
promises made under the following circumstances:

a) Sulaiman obtained a loan of RM5,000 from Public Bank. When Public Bank
served him a notice to pay he promised to give the title deeds of his house as
security. Sulaiman did not hand over the documents as promised. Public Bank
sues Sulaiman for specific performance of the promise.

INTRODUCTION:
In the above sample question, to say that the issue in the question is whether performance of the
promise between Sulaiman and Public Bank or not. This applied to almost every question
relating to the formation of a contract, whether the issue is on offer, acceptance, consideration or
intention to create legal relations, for ultimately one has to conclude whether or not there was a
contract between the parties.

Therefore students should state the issue or issues specifically. In the above case study, there are
several issues that have been discussed:

(a) Was Sulaiman broke the promise with the Public Bank?
(b) Were Public Bank sues Sulaiman for specific performance of the promise?
(c) Is this considered as performance of the promise?
 FIRST ISSUE:

Was Sulaiman broke the promise with the Public Bank?

Laws involved:
 According to Section 74(1) in Contract Act 1950, when a contract has been broken, the
party who suffers by the breach is entitled to receive, from the party who has broken the
contract, compensation for any loss or damage caused to him thereby, which naturally
arose in the usual course of things from the breach, or which the parties knew, when they
made the contract, to be likely to result from the breach of it.
 According to Section 74(1) in Contract Act 1950, when a contract has been broken, if a
sum is named in the contract as the amount to be paid in case of such breach, or if the
contract contains any other stipulation by way of penalty, the party complaining of the
breach is entitled, whether or not actual damage or loss is proved to have been caused
thereby, to receive from the party who has broken the contract reasonable compensation
not exceeding the amount so named or, as the case may be, the penalty stipulated for.
 According to Section 124 in Contract Act 1950, Bankers, factors, wharfingers, advocates
and policy brokers may, in the absence of a contract to the contrary, retain, as a security
for a general balance of account, any goods bailed to them; but no other persons have a
right to retain, as a security for such balance, goods bailed to them, unless there is an
express contract to that effect.

Apply the Laws:

In this case, Sulaiman had received RM 5,000 from Public Bank but when Public Bank served
him a notice to pay back the loan, he promised to give the title deeds of his house as security but
after a few months he still not hand over the documents of the tittle deeds of his house as what he
promised to the Public Bank. So from this case, it can be said that Sulaiman had broke the
promise.
Conclusion:
Sulaiman had broken the promise, so on behalf of the Public Bank,they have their right to take
an action to Sulaiman.
 SECOND ISSUE:

Were Public Bank sues Sulaiman for specific performance of the promise?

Law involved:

 According to Section 86 in Contract Act 1950, any variance, made without the
surety’s consent, in the terms of the contract between the principal debtor and the
creditor, discharges the surety as to transactions subsequent to the variance.
 According to Section 94 in Contract Act 1950, a surety is entitled to the benefit of
every security which the creditor has against the principal debtor at the time when
the contract of suretyship is entered into, whether the surety knows of the
existence of such security or not; and, if the creditor loses or, without the consent
of the surety, parts with the security, the surety is discharged to the extent of the
value of the security.
 According to Section 98 in Contract Act 1950, in every contract of guarantee
there is an implied promise by the principal debtor to indemnify the surety; and
the surety is entitled to recover from the principal debtor whatever sum he has
rightfully paid under the guarantee, but not sums which he has paid wrongfully.

Apply the Laws:

Since the section 94 in contract Act 1950 stated so, Public Bank had given RM 5,000 to
Sulaiman and as a further security for the RM 5,000 by a mortgage of Sulaiman’s title deeds of
his house but suddenly after a few months Sulaiman did not given his title deeds of his house that
means Sulaiman had cancel his mortgage. Public Bank becomes insolvent and they sue Sulaiman
on the guarantee.
Conclusion

Even the existence of a contract in writing at the beginning, but the performances of the promise
had been broken by Sulaiman because he still did not paid back the loan and did not give his title
deeds of his house. So Public Bank has their right sue Sulaiman on what he had done.
 THIRD ISSUE

Is this considered as performance of the promise?

Laws Involved:

 According to Section 39 (1) in Contract Act 1950, where a promisor has made an
offer of performance to the promisee, and the offer has not been accepted, the
promisor is not responsible for non-performance, nor does he thereby lose his
rights under the contract.
 According to Section 40 in Contract Act 1950, when a party to a contract has
refused to perform, or disabled himself from performing, his promise in its
entirety, the promisee may put an end to the contract, unless he has signified, by
words or conduct, his acquiescence in its continuance.
 According to Section 48 in Contract Act 1950, when a promise is to be performed
on a certain day, and the promisor has undertaken to perform it without
application by the promisee, the promisor may perform it at any time during the
usual hours of business on the day and at the place at which the promise ought to
be application performed.
 According to Section 51 in Contract Act 1950, the performance of any promise
may be made in any manner, or at any time which the promisee prescribes or
sanctions.
 According to Section 55 in Contract Act 1950When a contract consists of
reciprocal promises, such that one of them cannot be performed, or that its
performance cannot be claimed till the other has been performed, and the
promisor of the promise last mentioned fails to perform it, the promisor cannot
claim the performance of the reciprocal promise, and must make compensation to
the other party to the contract for any losswhich the other party may sustain by the
non-performance of the contract.
Apply the law:

In this case, it is necessaries to apply the law as what state at the above in Contract Act 1950,
since specific of the performances are failure. It is valid for the Public Bank to sue Sulaiman on
what he had done in this performances.
 GENERAL CONCLUSION

The compensation goal of contract law can be achieved by equiring the promisor to pay damages
or by requiring the promisor to render the promised performance. Under current law, a promisee
is entitled to a damage award as of right but the court retains discretion to decide whether
specific performance should be granted. Because specific performance is a superior method for
achieving the compensation goal, promisees should be able to obtain specific performance on
request. An expanded specific performance remedy would not generate greater transaction costs
than the damage remedy involves, nor would its increased use interfere unduly with the liberty
interests of promisors. Making specific performance freely available also would eliminate the
uncertainty costs of planning and litigation created by the difficulty of predicting whether the
remedy will be available. In addition, this reform would reduce the negotiation costs incurred by
parties in attempting to create forms of contractual specific performance such as liquidated
damage clauses.96 Further, defenses to requests for specific performance that rest on unfairness
of contract terms or prices and that differ from the defenses in actions at law should be
eliminated the grounds for denial of specific performance should be the same as those that now
will bar a damage suit. Finally, the defense based on difficulty of supervision should be greatly
restricted. If the law is committed to putting disappointed promisees in as good a position as they
would have been had their promisors performed, specific performance should be available as a
matter of course to those promisees who request it.
 b) Zaid wrote to Faiz his nephew, the following letter:
i am pleased to hear of your engagement with Salwa. It gives me great pleasure to
tell you that I will pay you RM500 every month after your marriage till you stand
on your own feet in the tourist travel business.
Faiz marries Salwa and sues Zaid to enforce the promise made by his uncle.
Advice Faiz.

INTRODUCTION:
Based on the question above, the issue is does legal contract occur between Faiz and Zaid. This
is a very important issue as most people do not know whether the contract is enforceable by law
or not.

The issues that are to be discussed based on the question are:

i. Zaid made an offer
ii. Faiz accept the offer by conduct
iii. Does the contract enforceable by law?
 FIRST ISSUE:

Zaid made an offer.

Related laws:

 Section 2(a) – when one person signifies to another his willingness to do or to abstain
from doing anything, with a view to obtaining the assent of that other to the act or
abstinence, he is said to make a proposal
Section 2 (d) – when, at the desire of the promisor, the promise or any other person has
done or abstained from doing, or does or abstains from doing, or promises to do or to
abstain from doing, something, such act or abstinence or promise is called a consideration
for the promise

Application of laws:

Based on the aboved issue, Zaid made an offer to Faiz. He communicate his offer by sending a
letter to Faiz.In that letter, Zaid make an offer to pay Faiz RM500 every month after Faiz
marriage Salwa till Faiz stand on his own feet in the tourist travel business. In this case an offer
is expressed in form ( letter).As we know. this is valid offer because it has been communiacated
to the party( Faiz) for whom it is intended by letter. The communication of a proposal is
complete when it comes to the Faiz knowledge.
Conclusion:

Based on section 2(a), Zaid made a proposal by writing letter to Faiz which states that he will be
paying Faiz RM500 per month after Faiz married to Salwa. Therefore, it can be say that Zaid
made a proposal to Faiz.
 SECOND ISSUE:

Faiz accept the offer by conduct.

Related laws:

 Section 4(2) – the communication of acceptance is complete

Section 4(2)(a)- as against proposer, when it is put in a course of transmission to him, so
as to be out of the power of the acceptor.
Section 4(2)(b)- as against the acceptor, when it comes to the knowledge of the proposer.
 Section 7- In order to convert a proposal into a promise the acceptance must-
Section 7(a) - be absolute and unqualified.
Section 7(b) – be expressed in some usual and reasonable manner, unless the proposal
prescribes the manner in which it is to be accepted. If the proposal prescribes a manner in
which it is to be accepted, and the acceptance is not made in that manner, the proposer
may, within a reasonable time after the acceptance is communicated to him, insist that his
proposal shall be accepted in the prescribed manner, and not otherwise; but, if he fails to
do so, he accepts the acceptance.
 Section 8- 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.

Application of laws:

Based on the above case, an acceptance has been made by Faiz .Faiz has made an acceptance
through an implied form or by conduct. This conduct refer to the Faiz is marrying Salwa as
stated in the offering that made by Zaid.
Conclusion:

Even though Faiz did not accept it by oral but he is considered to accept by conduct. Referring to
Section 7(b), Faiz accept the offer by marrying Salwa as stated in the letter. The letter itself is
stating the manner of the acceptance should be made. Therefore it is to be considered that Faiz
accept the proposal.
 THIRD ISSUE:

Does the contract enforceable by law?

Related laws:

 Section 9– So far as the proposal or acceptance of any promise is made in words, the
promise is said to be express. So far as the proposal or acceptance is made otherwise than
in words, the promise is said to be implied.
 Section 10(1)- All agreements are contracts if they are made by the free consent of parties
competent to contract, for a lawful consideration and with lawful consideration and with
lawful object, and are not hereby expressly declared to be void.
Section 10(2)- Nothing herein contained shall affect any law by which any contract is
required to be made in writing or in the presence of witnesses, or any law relating to the
registration of documents.

Application of laws:

Based on above cases, the contract between Faiz and Zaid is enforceable by law. The contract
contains an valid offer that has been made by Zaid through the letter The acceptance also has be
done through the conduct of Faiz married Salwa. The contract between Faiz and Zaid can be
enforceable by law if Zaid didn’t pay Faiz RM500.
 GENERAL CONCLUSION:

An offer is a clear proposal to another party to enter into an agreement on certain

terms. The person who makes the offer is called the offeror; the offeree is the party who makes
the party who receives the offer. For an offer to be valid, it must be intended seriously and its
terms must be certain.

In an implied contract, both parties indicate their intention to enter into a contract
through their conduct although no words may be spoken.

Contract means a promise between the promisor and the promisee with a legal
remedy. In section 7(b) Contracts Act 1950, an acceptance must be expressed in some usual and
reasonable manner, unless the proposal prescribes the manner in which it is to be accepted. If the
proposal prescribes the manner in which it is to be accepted, and the acceptance is not made in
that manner, the proposer may, within a reasonable time after the acceptance is communicated to
him, insist that his proposal shall be accepted in the prescribes manner, and not otherwise; but, if
he fails to do so, he accepts the acceptance. This situation is the same if the promisee do as stated
in the contract by action; thus the contract is enforceable.

Contract also exist if one of the party do what had been stated in the contract even
without consideration as in Contract Act 1950 in Section 26(b) 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. Therefore, if promisee does what
had been stated in the contract, a contract is enforceable by law.