Notes-Malaysia Busienss Law
Notes-Malaysia Busienss Law
Type of law:
Criminal law
Civil law
National law
International law
Public-affects as a whole
Private-affects individual, small groups
English law:
Common law: law made by English judges in the cases (may have inequity and not
perfect law)
And: conjunctive
Or: disjunctive
From peninsular, if the cases happened after 1956, the English law cannot be applied
in peninsular Malaysia
Sabah& Sarawak treated as different from Peninsular Malaysia
Lacunae in Malaysian Law, and suitable to local circumstance
Federal law:
Made by Parliament (Contract Act.1950)
#Only have two third majority in Parliament can change the law (prevent misused)
Legislation:
Laws made by the body which has power to make law
Case law:
Law come from cases- how did judicial precedent (to be consistent)
Doctrine of judicial precedent-whatever decide in superior court, inferior should
follow
In certain cases, judge makes law, as law may foresee problem
Custom law:
Adat Temenggung: all property for son (all states)
Adat Perpatih: all property for daughter (only negeri sembilan)
Natives(east Malaysia) and Aboriginal people(west Malaysia)
Syariah Law
Enacted by Federal Constitution
Only being applied to Muslims
Administrated by a separate court system
Doctrine of judicial precedent
Judge made law where decision of superior law bind lower courts
Notion that precedents are authoritative, binding and must be followed
Ought to be defined hierarchy of court
Define principle by which subsequent court can follow
Exist within system a structured process of law reporting
To ensure an accurate record of decision is made
Court structure:
Superior courts:
o High Court
o Court of Appeal and Supreme court
Subordinate courts:
o Session Court
o Magistrates court
o Penghulu’s court (W.malaysia)-head of village
o Natives Court (E.Malaysia)
Specialized court:
o Juveniles court
o Labour court
o Industrial court
o Martial court
Contract: an agreement between two or more parties which enforced by the law S(2)(h)
Proposal/Offer:
o When one person signifies to another his willingness to do or 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 S.2 (a)
o Once proposal accepted, legally binding agreement
o When you have no knowledge about offer, no agreement
Invitation to treat
Distinguished with offer
Inviting the person to whom it is made to make a proposal
An invitation to make a bid is kind of invitation to treat
Any goods display on the shop is invitation to treat
Take the goods to the counter (offer), cannot sue the seller who do not sale/sell at
higher price, because seller have rights to reject your offer.
Acceptance:
o When the person to whom the proposal is made signifies his assent thereto, the
proposal is said to be accepted, proposal becomes promise when accepted S.2 (b)
o Person making proposal is called promisor, person accepting proposal is called
promisee S (2)(c)
o To convert proposal to promise, acceptance must be absolute and unqualified S.7 (a)
Counter proposal
o We have a right to say no to counter proposal
o Its too late as proposal is terminated
Communication of Acceptance S(7)(b):
Acceptance must be expressed in usual and reasonable manner, unless the proposal
prescribes mode.
If the offeree is not made in the manner prescribed, the proposer may, within a
reasonable time after acceptance is communicated to him, insist that his proposal
shall be accepted in the prescribed manner, not otherwise
But if proposer fails to do so, he accepts the acceptance
Silent does not means acceptance
Exception:
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 (S.8)
Waiver: Promisee said giving up the right
Postal rule:
Communication of an acceptance completed as against the proposer, when it is put
in a course of transmission to him, so as to be out of the power of the acceptor
S.4(2)(a)
Laws look at that time it’s posted
Rule of convenience (must be fair to both party)
Can be excluded expressly (clearly mentioned accept on phone only)
Can be excluded impliedly (acceptance must come be invited/come to his writing)
Revocation of offer:
Revocation by offeror/proposer
Proposal can be revoked at any time before the communication of acceptance
completed as against the proposer S.5(1)
Proposal is revoked by the communication of notice of revocation by the proposer to
other party S.6(a)
The moment the offeree begun the act to accept the acceptance, revocation not
allowed
Communication by 3rd party not allowed
Revocation of acceptance:
o Acceptance may be revoked at any time before communication of acceptance is
complete as against the acceptor (Malaysia law only) S.5(2)
o When the letter posted and will be reached at 10th, mind can be changed at 8th
Termination of offer
Rejection of offer allowed by the proposer to other party S.6 (a)
Can only change mind before communication complete
Can be revoked by failure of the acceptor to fulfil a condition precedent to
acceptance
Acceptance not within reasonable time
Surrounding circumstances (common sense)
Death/mental disorder of offeror, if the fact of his death/mental disorder comes to
knowledge of the acceptor before acceptance
Personal contract-contract affected
Commercial contract-other people cannot perform the contract
For a contract to be valid inlaw, it has to fit into definition & requirement provided by CA
1950.
Week3: Formation of Contract II
Consideration
Something given by offeree to offeror
At the desire of promisor, promisee or any other person has done or abstains from
doing, such act/abstinence is called consideration for promise S.2(d)
No acceptance, contracts still valid
Consideration should not match value of subject matter (1 ringgit buying rolls-royce
is valid)
Meaning: offeree have done, doing, do something what offeror want (money,
services)
Every contract must have considerations
If no consideration, contracts is void unless S.26:
Expressed in writing and registered under law
Based on natural love affection/ standing in near relation to each other
Is a promise to compensate, a person who has already done something for the
promisor
Is a promise to pay a debt barred by limitation law
Three types of considerations
o Executory: formed by exchange of promise between two parties (bilateral contract)
o Executed: one party makes a promise in exchange for an act to be performed by
another (unilateral contract)
o Past: An act done before contract is made (past consideration valid in Malaysia)
Value of consideration:
Inadequacy can be taken into account to determine whether consent given freely
Offer must be made voluntarily, hence consideration not necessary be market value,
economic value, legal value
Certainty of terms:
Language used or certain term are vague
Uncertain meaning or capable of being made certain, are void
Capacity of parties:
Made by free consent of parties (voluntarily)
For lawful consideration with lawful object
Every person is competent to contract who is of the age of majority according to law
which he is subject
Minor: every male/female attaining age of eighteen shall be at the age of majority
Impossibility:
An agreement to do an act impossible in itself is void S.57
Impossibility of performance at the time contract is made
Impossibility of performance after contract is made. Doctrine of frustration
Consequences of frustration:
o Comes to an end at that time when something happen (becomes void)
o A decide to sell car to B at 1stApril, delivered at 1stMay, car destroyed by fire at
18April, S.66 applies as contract discovered to be void, car not possible to be
delivered at 1stMay
o Bound to restore the benefit when contract discovered to be void S.66
o Cannot sue as not the fault of seller destroyed the car, void
o When contract discharged by impossibility, seller need not deliver the car on
1stMay, all sum payable/cease to payable at that time shall be recoverable from him
the money received S.15(1)(2) Civil law 1956
Breach
When a party has refused 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 signify his acquiescence to proceed with contract S.40
Actual breach: the breach actually occurred
Anticipatory: can foresee the contract mostly cannot perform
If it is intention that contract should be performed by promisor himself, it must be
performed by him personally S.41
If promisee accepts performance of promise by third person, he cannot afterwards
enforce it against the promisor. S.42
Remedies to rescind
Right to rescind:
Terminate the contract only if breach of condition (major term)
In addition to rescind the contract, can also claim for damages, decided by court S.76
Damages:
Objective: put the affected party in no loss suffered
Required compensation for loss suffered
Not whatever loss suffered can be claimed, only can claim natural loss, getting
another contractor to redo it S.74(1)
Not only claim for natural loss, given condition that both parties must know it can
happen S.74(1)
Compensation not be given for indirect losses sustained by reason of breach S.74(2)
Specified an amount in the contract, sue if contract not be peformed, the figure
specified will be maximum number claimed in spite of loss S.75
Specific performance:
Quantum merit:
Asking for certain amount
Injunction:
Prevent someone from doing something (renovate)