The law of contract is about the enforcement of promises where the basic law, governs and relates to most aspects of human life. Contracts provide the means for individuals and businesses to sell or transfer property, services and other rights. Although the law of contract is about the enforcement of promises but not all promises are enforced by courts and to enforce a set of promises, or an agreement, courts look for the presence of certain elements; In other words contract is generally defined as a promise, or a set of promises, actionable upon breach of the contract where to enforce these set of promises or agreements, courts look for the presence of certain elements and once these elements are present a court will consider that the agreement is a contract. The purpose of a contract is to establish the agreement that the parties have made and to fix their rights and duties in accordance with that agreement.
The requisites for formation of a legal contract are an offer, an acceptance, competent parties who have the legal capacity to contract, lawful subject matter, and mutuality of agreement, consideration, and mutuality of obligation. An offer is a promise that is, by its terms, conditional upon an act, forbearance, or return promise being given in exchange for the promise or its performance. It is a demonstration of willingness to enter into a bargain, made so that another party is justified in understanding that his or her assent to the bargain is invited and will conclude it. Any offer must consist of a statement of present intent to enter a contract; a definite proposal that is certain in its terms; and communication of the offer to the identified, prospective offeree.
The Essay on Contracts Promised Perform
... -court settlement, thus saving the expense of legal proceedings. A contract arises when an offer to make a contract is accepted. An offer contains a promise ... extent, the performance of an agreement, for a party that breaks a contract may be sued in court for the damages caused by ... a person under 18 -- may be enforced or voided by the minor, unless the contract is for necessities such as food, lodging, ...
Acceptance of an offer is an expression of assent to its terms. It must be made by the offeree in a manner requested or authorized by the offeror. An acceptance is valid only if the offeree knows of the offer; the offeree manifests an intention to accept; the acceptance is unequivocal and unconditional; and the acceptance is manifested according to the terms of the offer. The determination of a valid acceptance is governed by whether a promise or an act by the offeree was the bargained-for response. Since the acceptance of a unilateral contract requires an act rather than a promise, it is unnecessary to furnish notice of intended performance unless the offeror requested it. If, however, the offeree has reason to believe that the offeror will not learn of the acceptance with reasonable promptness, the duty of the offeror is discharged unless the offeree makes a reasonable attempt to give notice; the offeror learns of the performance; or the offer indicates that no notice is required.
Competent Parties involve a natural person who agrees to a transaction has complete legal capacity to become liable for duties under the contract unless he or she is an infant, insane, or intoxicated.Infants An infant is defined as a person under the age of 18 or 21, depending on the particular jurisdiction. A contract made by an infant is voidable but is valid and enforceable until or unless he or she disaffirms it. He or she may avoid the legal duty to perform the terms of the contract without any liability for breach of contract.
Any undertaking may be the subject of a contract, provided that it is not proscribed by law. When a contract is formed in restraint of trade, courts will not enforce it, because it imposes an illegal and unreasonable burden on commerce by hindering competition. Contracts that provide for the commission of a crime or any illegal objective are also void. A person may not legally contract concerning a right that he or she does not have. A seller of a home who does not possess clear title to the property may not promise to convey it without encumbrances. Neither may a seller promise that property will not be appropriated by Eminent Domain, which is an inherent power of government that is not subject to restrictions imposed by individuals.
The Essay on Contract Law Contracts Agreement Party
1. The importance of a contract law to the private market system is vital for our private enterprise economy. It helps make buyers and sellers willing to do business together. Contract laws allows private agreements to be legally enforceable. Contract laws provides enormous flexibility and precision in business dealings. It provides flexibility in that you can agree to literally anything that is ...
Mutual Agreement is where there must be an agreement between the parties, or mutual assent, for a contract to be formed. In order for an agreement to exist, the parties must have a common intention or a meeting of minds on the terms of the contract and must subscribe to the same bargain.
Consideration is a legal detriment that is suffered by the promisee and that is requested by the promisor in exchange for his or her promise. A valid contract requires some exchange of consideration. As a general rule, in a bilateral contract, one promise is valid consideration for the other. In a unilateral contract, the agreed performance by the offeree furnishes the necessary consideration and also operates as an acceptance of the offer.Mutuality of Obligation where promises constitute the consideration in a bilateral contract, they must be mutually binding. This concept is known as mutuality of obligation. If one party’s promise does not actually bind him or hers to some performance or forbearance, it is an illusory promise, and there is no enforceable contract. SHAHIN BAGHERI Intention to create legal Relations in Malaysia Law
contract act 1950 is silent on the intention to create legal relations, but if two or more parties make an agreement without any intention to create legal relations, that agreement will not be regarded by the court as a contract. Although that is silent from the written law that is Contract Act 1950, but we still can refer to the unwritten law that is case law. In a social and domestic arrangement there is a presumption that domestic and social agreements are not intended to have legal force. Social and domestic agreement normally includes agreement between husband and wife, parent and child and others. In Balfour v Balfour (1919), The Court of Appeal decided defendant was not bound to pay the allowance because the agreement between them was no intention to create legal relations. In this case, the courts had no place to interfere because it was family matter. However, in Merritt v Merritt (1970) agreement made by husband and wife was intended to be legally binding because when agreement was made, the husband and wife was separated, no longer living together and this intention was proved by the agreement in writing. Similar problem of intention to create legal relations also occur between parents and children.
The Term Paper on Business Contracts and Legal Risks
Many companies today often don’t think about legal issues related to their business until they are hit with a lawsuit or decide they need to take legal action against someone else. The ramifications of a lawsuit as a plaintiff or a defendant can impact a company and even destroy a company and its reputation. This can happen if the company is not fully prepared on handling legal pitfalls that might ...
In Jones v Padavatton (1969), the agreements are not intended to have legal force because was a family arrangements between daughter and mother. Therefore, the mother was entitled to possession of the house. In other domestic agreements, the problem of intention to create legal relations also occurs to people who are not related. In Simpkins v Pays (1995), it was held that the plaintiff was entitled to his share because he have a legally binding agreement with the defendant. In the commercial agreement, there is a presumption that the parties do intend to make a legally binding contract. In Guthrie Waugh Bhd v Malaiappan Muthuchumaru, Ong CJ (Malaya) stated that: Any deed or agreement executed or made in the ordinary course of business between merchants and traders must be presumed as intended to be legally binding. In Carlill v Carbolic Smoke Ball Co (1982), the defendants was argued that their statement just an advertising to attract attention from the public but not intentions to create the legal relations.
The court was rejected this argument and stating that the defendants had intended to be legally bound because they had deposited certain amount of the money with their bankers. In Kleinwort Benson (KB) v Malaysia Mining Corporation BHD (1989), the MMC BHD was not willing to be guarantor for its subsidiary company MMC Metals but in letter of comfort stated that it was their company policy to ensure that their subsidiaries are always in a position to meet their debts. In this case, Kleinwort Benson cannot request the MMC BHD to pay the loss for the MMC Metal because they were not intending to create legal relations and the letter of comfort was no legal force.
Intention to Create Legal Relations in United State Law
The United States Contract Law, that is similar as the Malaysia Contract Act 1950 in the intention to create legal relations. Therefore that is not significant difference between these two countries. However, we can take a look of the case happened in United State .In Leonard v. Pepsico Inc. (1999),the company was did not intend create legal relation, the commercial advertisement it just invitation to treat. The Leonard v. Pepsico Inc (1999) and Carlill v Carbolic Smoke Ball Company (1982) were have significant difference because Leonard v. Pepsico Inc (1999).
The Term Paper on Research Of Copyright Involving Entertainment Law Tieing The Legal Issue part 1
Research of Copyright involving Entertainment Law tieing the legal issue to Universal Music suing of Grouper.com and Bolt.com. No of pages 4 style MLA Abstract and bibliography, No of sources: 6 3 books and 3 internet sources Deadline Nov 11 Dawn of computers and internet technology and rapid economic and communication development has compelled the society to access to modern information ...
commercial advertisement was just invitation to treat, but in Carlill v Carbolic Smoke Ball (1982), the action of the plaintiff was consider intend to create legal relations because the plaintiff deposited the money into bank show that sincerity of intention to be bound. That is other case we can refer is that Hawkins v McGee (1929), the boy and his father unwilling and hesitant to accept the medical treatment, but doctor was“guaranteed” he can make the hand perfect. The offer of perfect hand was made by doctor and the boy and his father was accepted the offer, the guarantee shows the intention to create legal relations, but doctor was breach of contract because he cannot recovered the perfect hand of the boy in this case.
ER CHEE ZHENG
Agreement
An agreement of contract law must be analyzed in terms of offer and acceptance. The contract must involve at least two parties, which are offerees creates a binding contract. Offer is a promise that according to its terms upon a particular act, a demonstration of the willingness of a party into a bargain, made in such a way that another individual is justified in understanding that his or her assent to the bargain is invited and that such assent will conclude the bargain. In the law of contracts, acceptance is one person’s compliance with the terms of an offer made by another. Acceptance occurs when he or she act or implication by conduct that accepted the terms of an offer, in a manner invited or required by the offer so that a binding contract is formed. In this section of the report we are going to do a comparative study and analysis of Malayan and People’s Republic of China of Contract law under agreement.
The Term Paper on Various Law Natural Person
Charta Magna: agreement between king John and his barons laying down mutual rights and obligations as well as the position of the lower nobility and the church. (1215) Habeas Corpus: is an important remedy against unlawful commitment. (1679) Bill of rights: protects statements in either house of parliament granting parliament itself the power to fine or imprison those who abuse this privilege. It ...
Law of Malaysia, Contract Act 1950
Definition of agreement according to Malaysian law Under Sction2 (a) of Contract act 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. Acceptance: Section7. In order to convert a proposal into a promise the acceptance must (a) Be absolute and unqualified; (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. Case Law Facts Hyde v. Wrench – Case Brief Summary
Wrench (D) offered to sell his estate to Hyde for 1200 pounds and Hyde (P) declined. Wrench then made a final offer to sell the farm for 1000 pounds. Hyde in turn offered to purchase the property for 950 pounds and Wrench replied that he would consider the offer and give an answer within approximately two weeks. Wrench ultimately rejected the offer and the plaintiff immediately replied that he accepted Wrench’s earlier offer to sell the real estate for 1000 pounds. Wrench refused and Hyde sued for breach of contract and sought specific performance, contending that Wench’s offer had not been withdrawn prior to acceptance. Issue :If one party makes an offer and the offeree makes a counteroffer, does the original offer remain open? Held: No. A counteroffer negates the original offer. To constitute a valid contract there must be a simple acceptance of the terms proposed. Hyde rejected the defendant’s offer to sell and made a counter proposal which terminated the offer. The offer was never accepted and cannot be revived later.
Principle of Contract law in United States of America
In applying the concept of mutual assent some courts sate that the formation of contract requires a “meeting of the minds” between the parties. A subtle but important distinction exists however, between the idea of “mutual assent” and “meeting of mind”.
The Term Paper on Implied Terms Contract Act Law
TABLE OF CONTENTS 1) Introduction 2) Implied Terms 3) Custom / Usage 4) Court 5) Past Dealings 6) Statute 7) Goods Act 8) Trade Practices Act 9) Conclusion 10) Recommendations 11) Bibliography INTRODUCTION Agreements are formed in almost every communication; electronic, written or oral; daily. Once an agreement fulfills the components required of a contract, therein lies the existence of terms of ...
Case Law
Key Facts: Ray selected William G. Eurice & Bros, Inc 93 A. 2d 272 (1952).
as the builder of a new home on a vacant lot owned by the plaintiff. Multiple meetings occurred between the plaintiff and the defendant in which they reviewed and edited the plans to build the home. A contract was submitted by the defendant to the plaintiff; however, the plaintiff did not accept this contract and had his attorney create a new contract. This new contract was submitted to the defendant and was signed by the defendant in the presence of the plaintiff. Copies of the new contract were also signed by the defendant at the bank which was providing the loan to the plaintiff for the home. Once construction was to begin on the home, the defendant claimed to have never seen the plaintiff’s contract and would not proceed in building the house with the specifications in the current contract. Procedural History: The plaintiff brought an action against the defendant, in the Circuit Court for Baltimore County, for a complete breach of a written contract to build a house. The Circuit Court ruled in favor of the defendant and the plaintiffs appealed. Issue: Whether a breach of contract exists if one party did not intend to agree to the contract yet signed the contract and had ample opportunity and ability to understand the contract. Holding: The Maryland Court of Appeals found that the defendant did breach the written contract.
Suppose A and B sign a written document in which B agrees to buy a condominium in new development. B later claims that he did not understand that he was signing a contract and that he did not intend to buy the condo. B might claim that he thought that the document he signed simply “reserved” the condo for him nut did not obligate him to buy the property. The case goes to a trail before a jury. Suppose the jury believes that B is telling the truth and that he honestly did not understand that he was obligated to buy the property. If contract law requires “meeting of the minds” for contract formation, then the jury should find for B. This view of contract formation has been described as “subjective” in that the actual intention of a party, rather than that party’s conduct, determines the parry’s legal obligations. On the other hand, if contract law requires manifestation of mutual assent, then (absent some fraud or other misconduct by S) the jury should find for S because both S and B manifested their assent by singing the document of sale. This approach has been described as “objective” in that it looks at the conduct of the parties from the perspective of a reasonable person rather than their actual, subjective intention.
ITTIPORN PRASERTSIT
Capacity and free consent in the Malaysian law
Figure 1
According to the section 2 (h) of Malaysian contract act 1950 contract is an agreement enforceable by law. And there are few fundamentals for any contract that should be following in order to be enforceable by law. One of the significant and necessary fundamentals is capacity and free consent. According to section 11 of the contract act 1950 capacity to make a contract has been describe as every person is competent to contract who is of 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.” Based on this section there are three main factors that can affect a competent of the person in order to move in a contract which are first, age of majority and second is sound mind and last but not least factor is disqualification . According to the age of majority act 1971, the age of majority in Malaysia is 18 years old which means that any person who would like to enter to the contract must be at least 18 years old .meanwhile anyone below the age of 18 is consider as minor or an infant. In fact here infant does not mean a baby but it means the person who is the below of the age of majority which is 18. And if any minor entered into the contract then that contract is void. However there are three exceptions for age of the majority.
Figure 2
The first exception is the contract for necessaries and the second exception is the contract of scholarship and the third exception is the contract of the insurance. According to the section 69 of the contract act of 1950 contract for necessaries described as a person a person may supply to a mentally disordered person or a minor necessary suited to their condition in life and that person is entitled to be reimbursed from the property of such incapable persons. It means that any minor can make a contract to get his or her necessaries but he or she cannot enter to the contract to get his or her luxury or unnecessarily things. The second exception Contracts of Scholarship is Section 4 Contracts (Amendment) Act 1976 Any suitable group can offer and make an agreement with a minor student to provide a scholarship. Means that any minor student can make a contract with the proper educational group in order to get the scholarship for higher education and this agreement is valid.
The third exception is in Insurance Act 1963 (revised) 1972, this says a minor can enter into insurance contract however if the minor is below than sixteen years old, he or she can only make insurance contract after taking written consent or permission from the parents. The second factor that affects capacity is sound mind. According to section 12 of the contract act 1950 a person must be mentally competent. It means that a person must have the ability to understand the terms of the contract and must have the ability to make a rational judgment. The last but not least factor that affects capacity is disqualification. Means it is not qualified form contracting by any law example: Undischarged bankrupt.
In contract act 1950 it has been mentioned that if the person is under drug or alcohol, he/she is incapable to enter to a contract. Section 13 of contract act 1950 in laws of Malaysia says “Two or more persons are said to consent when they agree upon the same thing in the same sense.” According to section 14 of contract act 1950 “Consent is said to be free when it is not caused by coercion, undue influence, fraud, misrepresentation, and mistake” Consent is said to be so caused when it would not have been given, but for the existence of such coercion, undue influence, fraud, misrepresentation, or mistake. Malaysia : Dharmodas Ghose v Mohiri Bibi
Dharmodas Ghose, a minor, entered into a contract to borrow a certain sum of money. The minor executed mortgage of property in favor of the lender. Subsequently, the minor sued to set aside the mortgage. The court held that the minor’s contract is void. The lender also requested for the refund of the money by the minor. The court further held that as a minor’s contract is void, any money advanced to a minor cannot be recovered. Capacity and free consent in the United States law
According to the uniform commercial code (UCC) the capacity to enter into a legal contract is almost same as the MALAYSIAN contract act 1950. There are three aspects that affect the capacity in the contract. The first aspect is the age of majority and the age of majority in the US are 18 and anyone who is below 18 years old consider as minor. However there are three exception for the minors that capable them to enter into the legal contract. The first exception is about the minor life necessities like food. The second exception is about scholarship which is related to the minor education. And the third exception is insurance. The second aspect is mental capacity which says that if a person has mental incapacity then he/she will not be able to enter to any contract. Means that if any person cannot understand the terms of the contract or have not the ability to make the correct judgment about the situation then he/she won’t be able to enter into any contract. The third aspect says that the people who are under drugs or alcohol are frequently considering lack of the capacity to enter a legal contract. United States contract law says an agreement is valid only when it is the result of the free consent of all the parties to it.
The act defines the meaning of the term `consent’ and other section specifies under what circumstances consent is `free .free consent “Two or more persons are said to consent when they agree upon the same thing in the same sense. Contract act United States says Consent is said to be free when it is not caused by coercion, undue influence, fraud, misrepresentation or mistake. US Cases:
In California 15-year-old son signed a contract for cell phone service without father knowing and then he’s supposed to pay $29.95 a month for a year. He isn’t paying (or using the phone) and the cell phone company keeps calling his father to demand payment. Result: That cell phone salesperson should have known one basic point of the law, a child can’t be held to his signed contracts. The law says that minors are, for the most part, legally incapable of entering into contracts.it is not considered as an exception, although they may seem like it to some people, cell phones are not “necessaries” of life. Son doesn’t have to pay and neither does father.
ALI JAVIDFAR
DISCHARGE of CONTRACT MALAYSIA
When parties enter a contract, they are liable to the terms in the contract and are obligated to perform those promises. This contractual relationship e nds when the rights and obligations that arise out of the contract are extinguished. The binding agreement is ceased as an act to Discharge the contract. A contract can be discharge by performance, breach of contract, frustration and novation and termination. Discharge by Performance
An act of discharging a contract when all parties in the contract fulfill their obligations as stipulated in the contract as agreed by all parties. Malaysian Contract Act 1950 section 38(1) states that “The parties to a contract must either perform, or offer to perform, their respective promises, unless the performance is dispensed with or excused under this Act, or of any other law”. section 38(2) states that “Promises bind the representatives of the promisors in case of the death of the promisors before performance, unless a contrary intention appears from the contract”.
Parties in the contract have to perform their obligations that arise from the contract in order to end their liability in the contract. In the event of promisor had offer to perform the obligation but the offer was not accepted by the promisee, the promisor will not lose his rights under the contract as stated in section 39(1) of Contract Act 1950 provided that the offer fulfill the following condition under section 39(2) of the same act. The offer has to be unconditional, made at a proper time and place and the promisee must have a reasonable opportunity of seeing that the thing offered is the thing which the promisor is bound by his promise to deliver. Technically everything that was agreed on in the contract has to be performed by parties involved in making the legal binding promise. When parties involved in the agreement successfully perform their obligations, the contract is then discharged by performance.
Discharge by Breach of Contract
According to the Malaysian Contract Act 1950 section 40, when a person involved in a contract fails to perform his or her promise entirely, the contract is technically breached. The affected party in the contract may put an end to the contract unless he or she has signified the promisor acquiescence by allowing the default party to continue the contract. A contract can be breached by non-performance of the contract on the contract due date also known as actual breach or anticipatory breach by informing the other party of non-performance before the due date. In the Hochester Vs. De La Tour (1853) the defendant engaged the plaintiff which is a courier to accompany him on the tour of Europe. The tour was agreed to begin on a specific date and the plaintiff was to be paid a certain amount of money per month for his services.
Couple of weeks before the actual tour date, the defendant wrote to the plaintiff informing him that he has changed his mind and refused to accept service from the plaintiff. Before the actual date of performing the obligations, the plaintiff brought a legal action against the defendant for the breach of contract. The defendant argued that there could be no breach of contract before the actual date of required performance. It was held that a party to an executory contract may make a breach of contract before the actual date of performance, and the plaintiff, in such a case, is entitled to put an end to the contract and he can bring an action even before the actual date of performance has arrived. The plaintiff’s action therefore succeeded as the defendant had committed an anticipatory breach of contract.
However, section 54 and section 55 of the Malaysian Contract Act 1950 gives exception to contract with reciprocal promise. In the event of non-performance that was caused by one party intentionally preventing the other party from performing his or her obligations as stated in the contract, the non-performing party can terminate the contract and claim for damages. The later section covers on when one promise depends on performance of another promise, if the initial promise was not performed, the reciprocal promise need not be perform either. Discharge by Frustration
According to section 57(1) of the Malaysian Contract Act 1950, a contract is understood to be technically discharge by frustration when agreement on promises failed in execution by promisor due to impossible nature of completing the promised act. It was based on the Doctrine of Frustration of the English Law a concept that is analogous to supervening impossibility. A contract can be discharge by frustration when the act becomes impossible to perform and when the act becomes illegal to perform. There are several circumstances in which acts can become impossible to execute; Impossible to perform since the beginning of agreement where it had caused the contract to void. Impossible to perform at later stage of the contract due to changes in circumstances and conditions.
If A agrees with B to run the day-to-day operation of B’s restaurant, but the restaurant was demolished three days after that, it is impossible for A to perform his promise as the subject of the promise is no longer there, the contract is then said to be frustrated as the act of running the restaurant that no longer exist is impossible. This is supported by section 57(2) of the same Act. When the contract is frustrated, it will then become void thus relieving parties from their liability in the contract. The theory was implied in Taylor vs. Caldwell (1863) where Taylor the plaintiff sued Caldwell the music hall owners for breach of contract in failing to rent out the music hall to the plaintiff as agreed upon on a certain date. The fact that the music hall burned down a week before the performance had frustrated the contract. The judge cited that when the existence of a particular thing
is essential to a contract, and the thing was destroyed by no fault of the party selling it, the party is then free from obligation to deliver the thing. However, there are events where promisee can seek compensation when the promisor in anyway might have known the impossibility of the act that the promisee did not know, according to section 57(3) of Malaysian Contract Act as to what happened in the case of Walton Harvey Ltd v Walker & Homfrays Ltd (1931).
The hotel owner who is the defendant was held liable for losses incurred by the plaintiff who is the advertiser as the owner was well aware at the time of entering the contract that the subject which is the hotel will be taken over by the authority and demolished within the seven years contract duration.
In some cases where the contract was seemed to be frustrated but not supervening and subsequent to the formation of the contract, the contract cannot be discharge by frustration. The frustration has to be some event where the promisor has no control over. Frustration should not be self-induced in the likes of Maritime National Fish v Ocean Trawlers (1935) where Maritime National Fish tried to discharge the contract on the ground of frustration as they were granted only three out of five licenses applied. The fact that Maritime National Fish chose the three preferred trawlers and decided not to hire the other two as stipulated in the contract was interpreted as its own act or election thus viewed as personal choice and self-inflicted.
However, an act can be impossible to perform due to personal incapacity, as to what had occurred in the Condor v The Baron Knights Ltd (1966) case where the court held that the contract entered by the band drummer Condor had been frustrated due to Condor personal incapacity to perform seven days a week after he was diagnosed with an illness. The act then became impossible for him to execute even though he was more than willing to perform. His contract was ruled by court to be discharge by frustration due to personal incapacity.
Discharge by Novation and Termination
A contract can be discharge when the parties to the contract mutually consent the relief of parties to the obligation in the contract as expressed in section 63 of the Malaysia Contract Act 1950. This can happen through novation when the existing contract is substituted with a new contract, by changing terms in the contract or changing parties to a contract. When an alteration occurs, and all parties to the contract consent the changes, the existing contract is thereby discharged by novation. However, promise can be dispensed with or remitted wholly or in part, the performance of the promise made to him, or may extend the time for such performance, or may accept instead of it any satisfaction which he thinks fit as stated in section 64 of the same Act. In the event A owes B a performance to be delivered, in the event A could not delivered as stated in the contract, B in his every right can accept the performance with satisfaction thus remitting the performance of the contract. B can also stop A from delivering the promise despite A can deliver the promise as stated. A therefore will not be held liable to the existing contract as B has agreed to accept A’s performance and that will be viewed as a new contract.
DISCHARGE of CONTRACT AMERICA
There are not much different in the discharge of contract between the America and Malaysia except for the sections and some provisions. The basic concept of discharging a contract remains similar to the ones in Malaysia. The united states Contract Law is govern by two main sources which is the US Common Law that was created by court through interpretation of analysis of prior facts and circumstances. This is the source of Contract Law for many countries as court will usually interpret and define other sources as well. Another source that governs the American Contract Law is the Uniform Commercial Code (UCC) that governs contracts pertaining to the sales of good in each of its state. There are however some additional provision in the Law of Contract of United States, the frustration of purpose under the Restatement (Second) of Contract section 265 for instance. It states that after a contract is made, when a party primary purpose is frustrated by no fault of his or any party in the contract, given that both party are well aware of this purpose of the contract at the time of entering it, the frustrated party is then discharge from his remaining duties of rendering performance he is obligated to by the contract unless the language or circumstances indicate the contrary.
The Act is a defense to enforcement of contract in the event of unexpected occurrence that undermines the party initial purpose of entering a contract. This defense was widely used during the prohibition period in America where bars and pubs no longer have reasons to continue their contracted leases. Unlike the Doctrine of Frustration that concerns more with the duties specified in the contract, Frustration of Purpose concerns more on the reason party enters a contract. In the Krell v Henry (1903) where the hotel customer as defendant was discharge from his obligation in a contract made with the hotel owner as the plaintiff, the case is seen in US Law of Contract as frustration of purpose. It is known that both parties are well aware that the principal reason behind entering the contract was for the purpose of viewing the King’s coronation, due to the event cancellation, the primary purpose of entering the contract to rent the room from the plaintiff was frustrated thus the defendant was relieved from his obligation under the contract.
Other than the above additional provision in the Law of Contract Restatement (Second) of Contract, other ways of discharging a contract are quite similar to the Malaysia Contract Law where a contract can be discharge by performance, breach of contract, frustration and discharge by novation and termination. However, much of contracts concerning business transaction in the United States are covered under the Uniform Commercial Code (UCC).
The UCC cover transaction from basic sales to investment security.
MUHAMMAD ASYRAF SHABARUDDIN
References
Introduction
http://legal-dictionary.thefreedictionary.com
http://www.londoninternational.ac.uk
Paul Richards, “Law of Contract”
Lee Mei Pheng, Ivan Jeron Detta, ”Business Law”
Agreement
http://malaysiancaselaw.blogspot.com/2009/10/hariram-al-jayaram-ors-v-sentul-raya.html http://www.agc.gov.my/Akta/Vol.%203/Act%20136.pdf
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Capacity and free consent in the Malaysian law
http://www.agc.gov.my/Akta/Vol.%203/Act%20136.pdf
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http://www3.uninsubria.it/uninsubria/allegati/pagine/1438/Prof_Mootz.pdf
DISCHARGE of CONTRACT MALAYSIA
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