Law of Contract
Chong Pit Kee
a)
Definition of contract
b)
Formation of a contract - elements involved
c)
Types of contract – valid, void and voidable
Lesson Objectives
An agreement enforceable by the law between
two or more parties to do or to abstain from
doing some act/acts, their intention being to
create
legal
relation
and
not
merely
to
exchange mutual promise, both having given
something
or
having
promised
to
give
something of value as consideration for any
benefit derived from the agreement
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Definition of Contract
Governed by Contracts Act 1950
English law applies by virtue of the Civil Law Act
1956
Defined as ‘a legally enforceable agreement
between 2 or more persons’
Agreement is an integral part of a contract but by
itself is not sufficient
to constitute a contract
Section 2 Contract Act 1950: an agreement
enforceable by law is a contract and one that is
not is void
agreement – offer and
acceptance
The intention to create a legal relation (ITCLR)
Consideration
Capacity
Certainty
Genuine assent / free consent
Legality
Elements of a
Contract
8
Preston Corp Sdn Bhd v Edward Leong & Ors
(1982), the federal Court expressed the view that
an offer is an intimation of willingness by an
offeror to enter into a legally binding contract and
that its terms must either expressly or impliedly
indicate that it is to become binding upon
acceptance by the offeree.
An offer can be made either expressly (in words
or orally) or can be implied
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Formation of Contract
1.
Offer
must
be
distinguished
from
an
‘invitation to treat (ITT)
2.
Offer must be communicated to the offeree;
person other than offeree cannot accept the
offer
3.
Offer and acceptance must correspond –
consensus ad idem
4.
Offer may be revoked before acceptance
Rules relating to Offer
