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Law of Contract (T6), CONDITION, Discharge by Breach, Discharge by…

- - - - Cases
        
        Car & Universal Credit v Caldwell [1964] 2 WLR 600
        
        Mr Caldwell sold his Jaguar car on 12th Jan to a rogue, Norris, who had paid £10 cash deposit and left another car as security and gave a cheque for £965. The following day Mr Caldwell went to cash the cheque and discovered it was fraudulent and the car left as deposit turned out to be stolen. Mr Caldwell reported the incident to the police and used his best endeavours to co-operate with the police to find Norris in order to rescind the contract of sale. He also contacted the Automobile Association to try to locate the car. Norris had acquired a voidable title to the car as the contract was induced by fraudulent misrepresentation. Norris sold the car on to a third party on 15th Jan. The question for the court was whether the actions taken by Mr Caldwell were sufficient to avoid the contract.
        
        Leaf v International Galleries
        
        The claim based on mistake was unsuccessful as the mistake related to the quality and did not render the subject matter something essentially different from that which it was believed to be. He believed he was buying a painting and he got a painting.
        
        Long v Lloyd
        
        Long v Lloyd [1958] 1 WLR 753
        
        The claimant purchased a lorry from the defendant. The lorry was advertised in a newspaper which described the lorry as being in exceptional condition. The claimant phoned the defendant to arrange a viewing and was told it was in first class condition. He went to view it the following day and was told it was capable of doing 40 mph and 11 miles to the gallon. The claimant test drove it and found that the speedometre was not working and he had to pull a wire for the accelerator as this was not working also. The claimant still decided to purchase the lorry. On the first journey the claimant noted certain faults with the lorry and contacted the defendant who offered to pay half the repairs. The claimant accepted this. However, on a further journey the lorry broke down completely and the claimant wished to rescind the contract and brought an action against the defendant for innocent misrepresentation.
      - In contract law, rescission is an equitable remedy which allows a contractual party to cancel the contract. Parties may rescind if they are the victims of a vitiating factor, such as misrepresentation, mistake, duress, or undue influence. Rescission is the unwinding of a transaction. This is done to bring the parties, as far as possible, back to the position in which they were before they entered into a contract
        
        whatever was done by the parties by making the contract is reversed
        
        the parties are put back in the position they would have been in, as if the the contract never even been made. That's the status quo ante
        
        it's treated as "non-existing".
      - Legal Effect of Rescission
        
        To rescind a contract, the parties return money, property and other interests to the other party to restore themselves to their precontractual positions.
        
        More often than not, it’s not as simple as handing back of property or repayment of money to put the parties in as good a position as before they entered into their transaction.
        
        Adjustments
        
        return money paid over back to the original payer
        
        restore loss of profits: arising from transfer of a business, which needs to be undone.
        If the contract is say, for the transfer of a business, that may mean that the innocent party has lost profits as a result of reliance on a misrepresentation and making the contract. Those lost profits would need to be returned to seller.
        
        compensate for payment of the cost of the contract and/or out of pocket expenses: The person rescinding the contract may have incurred expenses in reliance of the contract.
      - Damages
        
        An award of damages may be available to restore the position of the innocent party to the pre-contractual position where expenses were incurred under the contract.
        
        give effect to an indemnity in favour of the innocent party, which indemnifies the innocent party against the effects of entering into the contract.
        
        take an account of profits for the purpose of rebalancing the parties’ respective positions
        
        allow for deterioration in the property dealt with by the contract.
  - - - Legal process which prevents a defendant whether innocent or guilty to an action from dissipating their assets from beyond the jurisdiction of a court so as to frustrate a potential judgment
        
        Usually only be made where the claimant can show that there was at least a good arguable case that they would succeed at trial and that the refusal of an injunction would involve a real risk that a judgment or award in their favour would remain unsatisfied.
    - - The application is almost always made without notice, to prevent the fraudster defendant from spiriting away their assets before the freezing order is granted. Applicant's counsel is therefore required to make full and frank disclosure of all material facts, and the applicable law, to the court.
      - A Mareva injunction that is improperly or sloppily obtained, or one that is drafted too broadly or imprecisely, will cost the party, and its counsel, heavily in terms of credibility with the court.
      - As with most injunctions, the applicant must provide an undertaking to the court to compensate the defendant for any damage caused by the order.
    - - originated out of an English Court of Appeal case called Mareva Compania Naviera SA v International Bulkcarriers SA [1980] 1 All ER 213
        
        revolved around a shipping dispute whereby the defendant was a foreign party having monies in an English bank. Being a foreign defendant and the monies being capable of being transferred out of jurisdiction, there was grave concern the defendant would remove the monies leaving the plaintiff with no practical recourse should the plaintiff win its case.
        
        The English Court of Appeal granted an injunction to prevent the monies being dissipated, hence the name ‘Mareva Injunction’.
  - - - Intended to prevent the destruction of relevant evidence, particularly in cases of alleged trademark, copyright or patent infringements.
    - - order is named after the 1975 English case of Anton Piller KG v Manufacturing Processes Limited, dealing with the theft of trade secrets
    - - An extremely strong prima facie case against the respondent
      - Damage, potential or actual, must be very serious for the applicant
      - Must be clear evidence that the respondents have in their possession relevant documents or things and that there is a real possibility that they may destroy such material before an inter partes application can be made.
  - - - In the context of contract law, it means something along the lines of "reasonable value of services".
    - - Contract has been terminated by the Employer and the Contractor choose to claim for damages for breach of contract or quantum meruit in restitution for the work performed.
      - An Employer requested for works from the contractor which are not governed by any contract.
      - The parties proceed on the mistaken understanding there is an enforceable contract, but this found not to be the case.
      - Where the contract has been held to be discharged by frustration.
    - - Laserbore Ltd v Morrison Biggs Wall Ltd (1993)
        
        The Contractor issued the subcontractor a letter of intent in which it stated that the subcontractor would be paid fair and reasonable payments for all works executed.The Contractor had argued that fair and reasonable payments should be based on the actual costs of the subcontract plus amounts to cover overheads and profit.The learned Judge in deciding the meaning of the term ‘Fair and reasonable payments for all works executed’, considered that costs plus basis was wrong in principle even though it may sometimes produce the right result. The learned Judge held that in assessing quantum meruit claim the appropriate approach was to adopt general market rates or fair commercial rates.
  - - - to place the injured party in the position they would have been in had the contract been performed.
    - - Causation
      - Remoteness
        
        Under the rules of remoteness of damage, a claimant may only recover losses which may reasonably be considered as arising naturally from the breach or those which may reasonably be supposed to be in the contemplation of the parties at the time the contract was made
      - Duty to mitigate loss
        
        The plaintiff is not permitted to allow their losses to mount up. They are under a duty to take reasonable steps to reduce their loss.
    - - Addis v Gramophone
        
        Facts
        
        The Plaintiff was employed as a manager by the defendant. The defendant in breach of contract dispensed with his services and replaced him with a new manager. The plaintiff brought an action for breach of contract claiming that the level of damages should reflect the circumstances in which he was dismissed damaged his reputation and ability to find suitable employment.
        
        Held
        
        Contract law seeks to put the parties in the position they would have been in had the contract been performed. He was therefore limited to claiming wages and loss of commission during the contractually agreed notice period. There was no right to exemplary damages or damage to reputation in contract claims. Such claims would have to be actioned in the law of tort.
  - - - Where damages are an inadequate remedy
        
        If the claimant could adequately be compensated by an award of damages for the breach of contract, the courts are unlikely to order specific performance.
      - Type of contract
        
        The courts are unlikely to order specific performance for contracts for personal service.
      - Equity
        
        Causes hardship to the defendant
        
        Case
        
        Patel v Ali
        
        Facts
        
        Mr and Mrs Patel contracted to sell their house to Mr Ali. Completion of the sale was delayed by Mr Patel’s bankruptcy. At the time that they agreed to sell, Mrs Patel was healthy and had one child. However, during the delay, Mrs Patel contracted bone cancer and had to have a leg amputated. She also had to further children and she became heavily reliant on friends and neighbours to assist her with day to day activities. Mr Ali sought specific performance of the contract.
        
        Held
        
        Specific performance was denied on the grounds that it would cause hardship on Mrs Patel if she was required to move out. Whilst the hardship was not the fault of Mr Ali, Goulding J held that it would be ‘hardship amounting to injustice’ if specific performance was ordered
        
        Clean Hand
    - - Lamare v DIxon
        
        Facts
        
        defendant went to view cellars owned by the claimant but they were damp. The claimant promised that he would make the cellars dry before the lease commenced and the defendant agreed orally to take the lease. The claimant did not keep his promise and the defendant refused to complete the lease. The claimant bought an action for breach of contract seeking specific performance of the lease agreement.
        
        Held
        
        Specific performance was refused due to the claimant not keeping his promise in making the cellars dry.
  - - - Restitution for unjust enrichment
        
        Where one person has acquired a benefit at the expense of another in circumstances which are unjust and there are no applicable defences, the law imposes an obligation upon the latter person to make restitution. In short, a claimant will have a prima facie action where:
        
        The defendant has been enriched.
        
        his enrichment has been at the claimant's expense.
        
        This enrichment at the claimant's expense is unjust.
        
        There is no applicable defence
      - Restitution for wrongs
        
        Restitution for wrongs refers to a remedy where a gain can be taken away (or 'stripped', 'disgorged', etc.) from a defendant who has committed a wrong, either a tort, breach of contract, breach of fiduciary duty or breach of confidence.
        
        Proprietary torts
        
        United Australia Ltd v Barclays Bank Ltd
        
        Phillips v Homfray (1883)
        
        Edwards v Lee's Administrators
        
        Penarth Dock Engineering Co Ltd v Pounds
        
        Bracewell v Appleby
        
        Stoke-on-Trent City Council v W&J Wass Ltd
        
        Ministry of Defence v Ashman
        
        Jaggard v Sawyer
        
        Intellectual property torts
        
        Colbeam Plamer Ltd v Stock Affiliates Pty Ltd
        
        Patents Act 1977 ss 61-62
        
        Copyright, Designs and Patents Act 1988 ss 96-97, 191I-J, 229 and 233
        
        Breach of contract
        
        Wrotham Park Estate Co Ltd v Parkside Homes Ltd
        
        Attorney General v Blake
        
        Experience Hendrix LLC v PPX Enterprises Inc
        
        World Wide Fund for Nature v World Wrestling Federation Entertainment Inc
        
        Breach of fiduciary duty
        
        Regal (Hastings) Ltd v Gulliver
        
        Boardman v Phipps
        
        Murad v Al-Saraj
        
        Reading v Attorney-General
        
        Attorney-General for Hong Kong v Reid
        
        Daraydan Holdings Ltd v Solland International Ltd
        
        Non-proprietary torts
        
        Halifax Building Society v Thomas
        
        Law Commission, Aggravated, Exemplary and Restitutionary Damages (1997) No 247
        
        Draft Bill clauses 12(1), (5) and 15(6)
  - - - Types of Injunction
        
        prohibitory
        
        stops something from being done by a party
        
        mandatory
        
        require something to be done by a party
        
        intercolutory
        
        maintain the status quo of a party until a court hearing
    - - Warner Bros v Nelson
        
        Facts
        
        : Miss Nelson entered into a contract with the plaintiff agreeing she would not undertake other film work or other occupation without the plaintiff's consent. The plaintiff sought an injunction to restrain her in breach of this agreement
        
        Held
        
        The injunction will be granted but it would not prevet her from engaging in 'other occupations' as this would force her to work for the claimants.
- - - - In Affin Credit (Malaysia) Sdn Bhd v Yap Yuen Fui [1984] 1 MLJ 169, FC.the appellant let a motor-car to the respondent under a hire-purchase agreement. The respondent fell into arrears with the payment and the appellant brought an action for the balance outstanding under the hire-purchase agreement.
      - The Federal Court held that the fulfilment of the condition set out in s 4(1) of the Hire-Purchase Act was a condition precedent for the hire-purchase agreement :“… the plaintiff's claim was rightly dismissed by the lower court, not because the hire-purchase agreement was unenforceable, but because no agreement had in fact been entered into by the parties.
      - The respondent alleged that the appellant had failed to comply with various provisions of the Hire-Purchase Act 1967 (Rev 1978) Act 212. The issue which arose was whether non-compliance with s4(1) of the Hire-Purchase Act, which requires the owner of the goods to the prospective hirer a written agreement consisting of a summary of the hirer's financial obligations under the proposed hire-purchase agreement, would render a the hire-purchase agreement void ab initio.
    - - Eliason offered to purchase flour from Henshaw . Eliason specified that acceptance of offer be made by mail coach to Harper’s Ferry. Henshaw sent the acceptance by post to Georgetown on the assumption that it would reach Eliason faster. Unfortunately, the mail was late and the Court held Eliason was justified to refuse Henshaw’s acceptance.
        
        The exceptions to the rule that acceptance must be communicated are as follows:-
        
        The proposer has dispensed with the need for it.
        
        The proposer allows the party to whom the proposal is made to perform the condition of a proposal i.e acceptance taking the form of performance of an act stated in the proposal. A common sense approach to the law
    - - Holwell Securities Ltd v Hughes [1974] 1 WLR 155 is an English contract law case overriding the usual postal rule. Ordinarily, a contractual offer can be deemed to be accepted when it leaves the offeree and enters the postal system.
        In this case, the original offer clearly stipulated the method by which acceptance was to take place, and this superseded the normal operation of postal rule.
        
        The defendant, Dr Hughes, had granted a call option with respect to his property at 571 High Road, Wembley to the claimants, Holwell Securities Ltd, giving the claimants the irrevocable right to purchase the property during the option period for the specified sum. It contained a clause stipulating that there must be notice (here, receipt of the offer) in writing within six months in order to exercise the option. The claimants sent a letter purporting to exercise the option. It was lost in the mail and was never received by the defendant.[1] The defendant then refused to complete upon the purchase and the claimants sought specific performance.
        
        Russell LJ applied the case of Hare v Nicholl [1966] 2 QB 130, and asserted on that authority that options represent a special case, and that the grantee (here, the plaintiff) must comply strictly with the conditions stipulated for exercise by the offeror (the defendant in this case). As this had not happened, the claim failed. He then went on to consider the position in relation to the postal rule generally (which he referred to as "the roundabout path to the same result"). In relation to this he concluded based upon earlier authorities that although the postal acceptance rule was a rule of general application, it did not apply when there are express terms in the offer which exclude, and this includes excluding it by implication where the offer specifies that acceptance must reach the offeror.
    - - In this case, Boots introduced the then new self service system into their shops whereby customers would pick up goods from the shelf put them in their basket and then take them to the cash till to pay. The Pharmaceutical Society of Great Britain brought an action to determine the legality of the system with regard to the sale of pharmaceutical products which were required by law to be sold in the presence of a pharmacist. The court thus needed to determine where the contract came into existence.
        
        The judgement was both the Queen's Bench Division of the High Court and the Court of Appeal sided with Boots. They held that the display of goods was not an offer. Rather, by placing the goods into the basket, it was the customer that made the offer to buy the goods. This offer could be either accepted or rejected by the pharmacist at the cash desk. The moment of the completion of contract was at the cash desk, in the presence of the supervising pharmacist. Therefore, there was no violation of the Act.
    - - M.N. Guha Majumder v R.E. Donough [1974]-The court held that the evidence indicated that the parties did not intend to be immediately bound. There was only negotiation from beginning to the end.
      - Property owned by the defendant was advertised for sale, and written offers to purchase were invited. The plaintiff viewed the property on two occasions. During the interval between the two occasions the plaintiff was in communication with the defendant’s agent, and it was alleged that the defendant had accepted the plaintiff’s offer to purchase the property for RM70,000.
        
        Held: 1. The law does not impute an intention to enter into such a legal relationship as that of vendor and purchaser where the circumstances and the conduct of the parties negative any intention of the kind. 2. The evidence indicated that the parties did not intend to be immediately bound. They had not the necessary animus contrahendi (means intention to contract). What passed was only a negotiation from beginning to end.
  - - - Offer is general as it is made to the public.
    - - An offer should be contrasted with an option and an advertisement.
      - An option is merely an undertaking to keep the offer open for a certain period of time.
      - Advertisement is an attempt to induce an offer.
    - - The Offer only can be accepted by a person who been offer.
- - - - considered to be of lesser importance to the main purpose of the contract. If it is breached, the injured party must still perform their part of the contract but they have the right to sue for damages for any loss that they may suffer as a result of the breach
    - - Custom and pertaining to a particular type of transaction
      - Statutory provisions
        
        Sale of Goods Act 1957,
        
        Hire-Purchase Act 1967,
        
        National Land Code 1965
      - The courts, based on the intention of the parties
  - - - Re Moore and Landauer [1921] 2 KB 519
        
        There was an agreement for the sale of 3,000 tins of canned fruit packed in
        cases of 30 tins. When delivered it was discovered that half the cases contained
        only 24 tins although the total number of tins was still 3,000. The market value
        was not affected. The Court of Appeal held that notwithstanding that there was
        no loss to the buyer, he could reject the whole consignment because of the
        breach of s13 of the Sale of Goods Act (goods must correspond with the
        description).
      - Cutter v Powell (1795) 6 Term Rep 320
        
        A seaman who was to be paid his wages after the end of a voyage died just a
        few days away from port. His widow was not able to recover any of his wages
        because he had not completed performance of his contractual obligation. However,
        this situation is now provided for by the Merchant Shipping Act 1970.
      - Hochster v De La Tour (1853) 2 E&B 678
        
        An employer told is employee (a travelling courier) before the time for
        performance arrived that he would not require his services. The courier sued for
        damages at once. The court held that he was entitled to do so.
      - Avery v Bowden (1855) 5 E&B 714
        
        A charterparty provided that a ship should proceed to Odessa and there take a
        cargo from the charterer’s agent. The ship arrived at Odessa and the master
        demaned a cargo, but the agent could not provide one. The ship’s master
        continued to ask for one. A war broke out. The charterer sued. The court held,
        inter alia, that if the agent’s conduct amounted to an anticipatory repudiation
        of the contract, the master had elected to keep the contract alive until it was
        discharged by frustration on the outbreak of war.
      - Taylor v Caldwell (1863) 3 B&S 826
        
        For facts, see below. Blackburn J stated: “The principle seems to us
        to be that, in contracts in which the performance depends on the continued
        existence of a given person or thing, a condition is implied that the
        impossibility of performance arising from the perishing of the person or thing
        shall excuse the performance.”
      - Davis Contractors v Fareham UDC [1956] AC 696
        
        For facts, see below. Lords Reid and Radcliffe stated that the ‘radical
        change in the obligation’ test required the court to:
        
        Construe the contractual terms in the light of the contract and
        surrounding circumstances at the time of its creation.
        
        Examine the new circumstances and decide what would happen if the existing
        terms are applied to it.
        
        Compare the two contractual obligations and see if there is a radical or
        fundamental change.
  - - - case
        
        1.Chartered Bank of India, Australia and China v British India Steam Navigation Co Ltd,
        2.Sze Hai Tong Bank Ltd v Rambler Cycle Co Ltd
- - - - A) Social and domestic agreements
        
        Between Family and Friends , thre is a presumption thatthese agreement are not meant to be legally unless the contraty can be proven
        
        Cases
        
        Balfour v Balfour-
        
        The husband brought wife to England from Sri Lanka. The husband had to return but wife stayed for medical reasons. He promised to pay her £30/month until his return. When he failed to pay, the wife sued the husband. Wife’s action failed because there is no consideration moved from her and there is no intention to create legally binding agreement found. The court stated in husband and wife cases, burden of proof is on plaintiff to prove intention to create legally binding agreement.
        
        Simpkins v Pays
        
        The case shows mutuality. In this case .the defendant, her granddaughter and the plaintiff (paying lodger) regularly took part in newspaper competition. All contributed but entered in defendant’s name. There is no set of arrangement that state payment of postage etc. When entry of the competition is successful, defendant refused to share with plaintiff. The plaintiff sued for his share. Court ruled legally binding relationship as sufficient mutuality in the arrangements between parties.
      - B) Business and Cormmecial Agreement
        
        Cases
        
        Edvards v Skyways
        
        The plaintiff who was a pilot was made redundant by
        the defendant. He had been informed by his pilot's association that he would be given an ex gratia payment (gift).The defendant failed to pay and pilot sued.The defendant argues that the word 'ex gratia' implied that the was no intention to create legal relations. Held: this agreement related to business matters and was presumed to be binding and the defendants had failed to rebut this presumption.
        
        Rose and Frank Company v Crompton Bros
        
        FACT: An American company and English company entered into a sole agency agreement in 1913 for the sale of paper goods in the USA. The written agreement contained a clause stipulating that it was not a formal nor legal agreement, and an “honourable pledge” between business partners. Subsequently, the American company placed orders for paper which were accepted by the British company. Before the orders were fulfilled, the British company terminated the agency agreement and refused to send the goods, claiming that the 1913 agreement was not legally binding and that, consequently, the orders did not create legal obligations.
        
        HELD: Firstly, as to the 1913 agreement, the Court gave overriding weight to the provision in the agreement that expressly provides that it is to be solely an “honourable pledge”, as demonstrating that the parties did not intend the arrangement as a legally-binding contract. The Court explained that the argument that clauses restricting the legal enforceability of a contract apply solely when the document is otherwise unquestionably of legal force. In this case, the document and circumstances did not intend to create any legal interest, and the clause expressly precluding the agreement’s legal enforceability applies. Secondly, the Court held that the fact that the arrangement does not constitute a legal contract does not preclude the orders and acceptances from constituting legally-binding contracts. The lack of enforceability of an express legal arrangement under an agency agreement does not preclude the legal transactions. The orders constituted mutual offers and acceptances with each transaction having ordinary legal significance.
  - - - In order to ensure the consideration to be sufficient, the consideration should have some value to the other party. It is because, the courts will not concern on the market price topic because they believe it will interfere the liberty of a contract.
      - Case: Chappell V Nestle in year 1960
        
        This case demonstrates that the consideration in a contract may be very close to non-existent at yet still be sufficient to uphold the agreement. Nestle offered a record to customers who sent a certain number of chocolate bar wrappers. Although the wrappers were simply thrown away, it was sufficient consideration to support the agreement. The case concerned whether Nestle should pay Chappell royalties on records given away in return for chocolate bar wrappers (plus money for postage and packing).
    - - Consideration provided for a promise must be done in relation to that promise. If something has already been completed and the promise comes after, this is a past consideration.
      - Executory consideration consists of two promises and executed consideration consists of one promise followed by some action.
    - - Consideration must be provided by promisee in order for her or him to be able to enforce promise. Thus, party who has not provided consideration for promise cannot enforce promise and it is only the party who has “paid” for promise who can enforce it.
        
        case
        
        Tweddle V Atkinson in year 1861
        
        John Tweddle promised William Guy that he would pay a sum of money to the child of William Guy, and likewise William Guy promised John Tweddle that he would pay a sum of money to the child of John Tweddle, upon the marriage of the two children to each other. However, William Guy failed to pay the son of John Tweddle, who then sued his executors for the amount promised. It was held that the son could not enforce the promise made to his father, as he himself had not actually given consideration for it – it was his father who had done so instead. This particular rule of consideration forms the basis of the doctrine of privity of a contract, that is, only a party to a contract is permitted to sue upon that contract’s terms. Therefore consideration from the promisee was indulgent of the claim. Although consideration must move from the promisee, it does not necessarily have to move to the promisor. The promisee may provide consideration to a third party, if this is agreed at the time the parties contracted.
    - - Consideration must be given in return for; such as in the situation of must be, to some extent, motivated by, promise or act of other party.
        
        Case
        
        Roscorla V Thomas in year 1842
        
        Roscorla and Thomas contracted to buy a horse for £30. After the sale, Thomas promised Roscorla that the horse was sound; the horse turned out to be vicious. It was held that Roscorla could not enforce the promise, as the consideration given for entering into the contract to buy the horse had been completed by the time the promise was made; in a sense, the consideration was “used up”.
        
        ReMcardle in year 1951
        
        This case is the archetypal example of a past benefit being unacceptable as consideration in a contract. The occupants of a house carried out certain improvements during their tenancy, and were offered payment in recompense by the owner. However, the owner died before doing so, and his representatives refused to honour the promise. The courts supported the owner’s representatives, because the tenants had not provided good consideration. Note that in this case the tenants’ work was carried out at their own behest, and not at the request of the owner. Had the owner explicitly requested the tenants to do the work, and then offered payment, the court may have been able to use the doctrine of Implicit Assumpsit to incorporate the past work into the agreement, and thereby deem it consideration.
        
        Lampleigh V Braithwait in year 1615
        
        This case introduced the doctrine of Implicit Assumpsit, which states that although it is a strong principle of English law that a past benefit cannot be invoked as consideration to support a future contract, this principle may not be operative when the past benefit accrued at the beneficiary’s request, and with an understanding given that the benefit would be reward in the future. Braithwaite was convicted of an unlawful killing. In desperation he asked Lampleigh to petition the King for a pardon. This was successful, and Braithwaite offered Lampleigh £100. However, when Lampleigh tried to claim, Braithwaite refused. His defense claimed Lampleigh had offered no consideration, so the agreement was not binding. The court ruled that in cases of this sort, where a past benefit was at the request of the beneficiary and where reward was expected, the past consideration could be `assumed’ into the agreement.
        
        Eastwood V Kenyon in year 1840
        
        Mr. Eastwood brought up Sarah, the daughter of one of his friends, who died leaving Sarah sole heiress to his fortune. Mr. Eastwood had few resources and had to borrow a large sum of money to educate Sarah. When Sarah came of age, she promised to reimburse the amount. After her marriage, her husband made the same promise to Mr. Eastwood.
    - - an agreement made on account of natural love and affection would be held to be binding in Malaysia if the requirements of section 26(a) are present:
        
        It is expressed in writing
        
        It is registered (if applicable)
        
        The parties stand in a near relation to each other
      - Case: Tan Soh Sim v Tan Saw Keow
        
        In the case of Tan Soh Sim, deceased; Chan Lam Keong & Ors v Tan Saw Keow & Ors (1951), the court held that the validity of consideration depended on natural love and affection between near relations, relationship and nearness depended on the mores of the group to which the parties belong and the circumstances of the particular family.
    - - Involve right, interest, profit or benefit of one party which come from any forbearance, detriment, loss or responsibilities occurred and after being experience of the promisee.
- - - - The legal ability to enter into a contractual
        relationship.
    - - The age of majority (adult) in
        Malaysia is 18 years.
    - - (1) A person is said to be of sound mind for the purpose of making a contract if, at the time when he makes it, he is capable of understanding it and of forming a rational judgment as to its effect upon his interest.
        (2) A person who is usually of unsound mind, but occasionally of sound mind, may make a contract when he is of sound mind.
        (3) A person who is usually of sound mind, but occasionally of unsound mind, may not make a contract when he is of unsound mind.
    - - Every person is competent to contract who is the age of majority according to the law to which he is subject, and who is of sound mind, and is not disqualified from contracting by any law to which he is subject.
    - - Exception of contract by minors: Contracts for necessity; scholarship; insurance, and relating to marriage, divorce
        and dower.
        
        Sound mind
        
        (a) A patient in a mental hospital, who is at intervals of sound
        mind, may contract during those intervals.
        
        (b) A sane man, who is delirious from fever, or who is so drunk that he cannot understand the terms of a contract, cannot contract whilst such delirium or drunkenness lasts.
    - - Goverment of Malaysia V Gucharan Singh & Ors
        
        The plaintiff, The Government of Malaysia, entered into an agreement with
        the first defendant ,Gucharan Singh, whereby the plaintiff would provide a course of training at a Malayan Teacher's Training Institution for the defendant and in
        return, the first defendant had to serve the plaintiff as a teacher for 5 years upon completing the course. As agreed, the first defendant served the plaintiff as a teacher after completing the course from 1st January 1962 to 4th August 1968 except for the period between 18th May 1964 to 29th January 1967 where the first
        defendant’s service was suspended to enable him to further his studies and this was consented by the plaintiff by agreement. However, the first defendant later resigned. Thus, after deducting the duration when the first defendant’s service was suspended for his studies, the first defendant only completed his service for 3 years and 10 months, in contradiction to what was agreed earlier, which was 5 years. Thus, the plaintiff sued the first defendant for breaching the contract and the second and third defendants, as sureties of the contract, were sued for compensation. The defendants argued that at the time of entering into the contract, the first defendant was a minor and thus the contract should be void. On the other hand, the plaintiff argued that the provision of the training is a necessary and therefore should be an exception of the law that a contract with a minor is void
        
        Judgement
        
        1) The contract entered into by the first defendant was void as he was an infant
        at the relevant time.
        
        2) Sureties’ liability is co-extensive with that of the principal debtor. Since the first defendant was not liable, the second and third defendants were not liable as well.
        
        3) The word "necessaries" must be construed broadly and in the circumstances of this case, the provision of professional or vocational training for the first defendant in a Teacher's Training Institution to enable him to be qualified for and accept appointment as a teacher was a provision for necessaries.
        
        1 more item...
      - Tan Hee Juan v Teh Boon Keat
        
        The plaintiff, in this case, was an infant. The infant executed transfers of land in favour of the defendant. The transfers were witnessed and registered. Later, the plaintiff applied to the court for an order to set aside the transfers and for incidental relief.
        
        The Court ruled that the transactions were void and ordered the restoration of the property to the minor.
    - - Having the capacity to contract means a person is legally competent to enter into a contract. The capacity to contract is defined as having the capacity to enter into a legal agreement, which means someone must be of sound mind. With legally binding agreements, some people don't have the capacity to enter into an agreement, whether they're underage, mentally ill, or intoxicated.
    - - Contract for necessaries is another exception to the general rule. A minor who enters into a contract for necessaries is liable for the contract. According to Section 69 of the Contracts Act 1950, "if a person, incapable of entering into a contract, or anyone whom he is legally bound to support, is supplied by another person with necessaries suited to his condition in life, the person who has furnished such supplies is entitled to be reimbursed from the property of such incapable person".
        
        Example of necessaries, food, shelter, clothing, medical services, and education.
  - - - Agreements, the meaning of which is not certain, or capable of being made certain, are void.
    - - ~That the scope of cover has been clearly defined.
      - ~That consistency is maintained within the terms of the cover.
      - ~All parties contractually state the steps to take when a loss is created by more than one hazard.
    - - KARUPPAN CHETTY v SUAH TIAN(1916)
        
        In Karuppan Chetty v. Suah Thian (1916) 1 F.M.S.L.R. 300, the contract was held void for uncertainty because the parties agreed to lease of $35 per month „for as long as he likes‟. The terms are uncertain as the duration of the lease is not specified or capable of being made certain.
        
        Fact of the case:
        
        The parties agreed upon the granting of a lease at RM 35 per month for as long as he likes’
        
        Issue:
        
        Whether the use of ‘for as long as he likes’ had rised the ambiguity in its terms
        
        Held:
        
        The court held that the requirement of certainty had not been satisfied as the duration of one of themost important term of the lease was undefined or uncertain. Therefore, the agreement is void.
        
        Reason of decision: The language used by the party is not specifiand too vague. In a nutshell, all uncertain contracts are voidby virtue to Section 30 of Contract Act 1950.
    - - The two areas that need to be considered when reviewing whether an agreement is certain can be broadly placed into two categories: (a) vagueness of the agreement and (b) whether it is incomplete.
- - - - The question arose as to whether the sailor was entitled to payment for his substantial performance of the contract as an implied term within the contract.
      - ISSUE
      - Held
        
        The Court stipulated that, where parties conclude an express contract, no terms can be implied into the contract. On the facts, the contract between the parties expressly provided that the payment was conditional upon the completion of the voyage and only payable after the ship’s arrival. Thus, under the express terms of the contract, the sailor was entitled to receive the payment if the whole duty of the contract was performed, and not entitled to any payment if the contract was only partially performed. The Court noted that the contract made payment conditional on performance of the full voyage as a form of insurance for the employer. Accordingly, the Court held that, even though the sailor was not to blame for failure to perform the contract, the express terms of the contract renders payment conditional on the full performance of the contract. Thus, on a construction of the express terms of the contract, no payment was due for partial performance.
      - FACTS
        
        Mr. Cutter, a sailor, was hired for a voyage and given a promissory note from his employment that ten days after the ship arrives at Liverpool, he will pay Mr. Cutter a certain sum, “provided he proceeds, continues and does his duty as second mate in said ship from hence to the port of Liverpool.” Mr. Cutter began sailing the ship as second mate for about six weeks, yet died before its arrival in Liverpool. Mr. Cutter’s wife brought an action for a proportionate part of his due wages for the substantial amount of the voyage on which he acted as second mate.
- - - - CASE
        
        Maritime national Fish, Ltd v Ocean Trawlers Ltd
      - Frustration only arises where there is an unforeseen and radical change in surrounding circumstance
        
        CASE
        
        Yee Seng Plantations Sdn Bnd v Kerajaan Nageri Terengganu & Ors)
        H A Berney v Tronoh Mines Lts,
        Standard Chartered Bank v Kuala Lumpur Landmark Sdn Bhd,
        Eastarcres development Sdn Bhd v Fatimah Mutallip & Anor,
        Dato Yap Peng & Ors v Public bank & Ors