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MGM 3351 (show 3) - Free consent Parties must not be...

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Free consent Parties must not be influenced by factors that affect his freedom to consent to contract - at the time of contracting. s. 14 free consent – not influenced by -Coercion . S15 - Undue influence. S16 - Fraud. S17 - Misrepresentation. S18 - Mistake. S21, S22, S23 - Effect = contract void or voidable
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Coercion: Two components: i- Commit, threaten to commit any act forbidden by the Penal Code. Include threat to other person close to the contracting party. The rule applies even if the coercion took place in a location where Penal Code is not in force. or, ii- Unlawfully detaining or threaten to detain any property.
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Chin Nam Bee Development Sdn Bhd v Tai Kim Choo & 4 Ors “The definition of "coercion" in section 15 should only apply for the purpose contained in section 14 as section 14 of the Act specifically says so Coercion includes economic duress OCBC Securities (Melaka) Sdn Bhd (formerly known as Sykt Tan, Chow & Loh Securities Sdn Bhd) v Koh Kee Huat [2004] 2 MLJ 110
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To ascertain whether the consent was vitiated by economic duress, it is necessary to question whether; a- He did or did not protest; b- at the time he was allegedly coerced into making the contract, he did or did not have an alternative course open to him such as an adequate legal remedy; c- he was independently advised; and d- after entering the contract he took steps to avoid it.
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after proving no (i) or/& (ii) prove that – coercion was exercised with the intention to cause the person to enter into a contract Effect of coercion = s. 19 contract voidable
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Undue Influence s. 16: a) Undue influence & proof of dominant position i- When there is a relationship between the contracting parties to the extent that one is in a dominant position and can influence the will of the other and used that position to obtain unfair advantage
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Requires proof of: i- dominant position; ii- unfair advantage; and iii-the contract was entered because of the influence Effect: s. 20 contract voidable b) Undue influence & presumed dominant position A person is presumed to be in a dominant position: i- he/she possess real or apparent authority over the other party;
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Salwath Haneem v Hadjee Abdullah S and Husband jointly owned property. Husband transferred the property to his brothers. S agreed. After her husband passed away, she brought an action to set aside the contract on ground of undue influence Q- was there undue influence?
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Held- there was real authority by the husband over S. therefore, the brothers must show that S’s consent to transfer the property was not affected by undue influence. The brothers failed to discharge the duty, there was undue influence as a result the contract can be avoided.
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ii- fiduciary relationship between the parties Datuk Joginder Singh & Ors v Tara Rajaratnam T claimed that she had transferred her property to another person due to among others undue influence exercised by the 1 st resp.
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