Since the beginning of human civilization, there was certain rules and regulations that people used to follow. This rules and regulations are called Law which is created or established by the authorized organization and governed or enforced by controlling authority. Law is one of the most essential and interesting frames of life itself. During the Barter Exchange Age when people started exchanging products with others in order to fulfill the necessity, it brought the idea to start doing business.
Nowadays rapid economic growth of the world accelerates by the business transaction and commercial performances. In order to operate a business, Contract between two or more parties is very crucial. Although contract can take place in here and there; in a business concern, it is important for both parties to enter into a contract for further operation and to protect each other’s rights and interests. There is some specific Law needed to be followed by both parties which is called Law of Contract.
Table of Contents
1.0 INTRODUCTION
2.0 LAW OF CONTRACT
2.1 OFFER
2.2 ACCEPTANCE OF THE OFFER
2.3 INTENTION TO CREATE LEGAL RELATIONSHIP
2.4 CONSIDERATION
2.5 CERTAINTY
2.6 CAPACITY
2.7 FREE CONSENT
2.7.1 IMPORTANCE OF FREE CONSENT
2.7.2 COERCION
2.7.3 UNDER INFLUENCE
2.7.4 FRAUD
2.7.5 MISREPRESENTATION
2.7.6 MISTAKE
3.0 CONCLUSION
Research Objectives and Key Topics
This work aims to provide a comprehensive understanding of the legal requirements for a valid contract, with a specific focus on the concept of "free consent" as defined under the Malaysian Contract Act 1950. It explores how legal agreements are formed and examines the circumstances under which a contract may be deemed void or voidable due to external influences or errors.
- Fundamental components of a valid contract
- Legal definition and implications of "Free Consent"
- Analysis of factors vitiating consent: Coercion, Undue Influence, Fraud, Misrepresentation, and Mistake
- Application of legal precedents and case law in contract disputes
- Distinction between void and voidable contracts
Excerpt from the Book
2.7.2 COERCION
Section 15 of the Contract Act 1950 demonstrated that ‘Coercion is the committing or threatening to commit any performance prohibited by the Penal Code, or illicit detaining or threatening to detain, any property, to the prejudice of the anybody whatever, with the purpose of causing any person to enter into a contract. This defines including the economic pressure.
The case of Allied Granite Marble Industries Sdn Bhd vs. Chin Foong Holdings Sdn Bhd and Ors. (2000) [5 CLJ 71], when deciding it was held that there was no duress at all on the vent of the case. As one of the judges mention that in the law the party is held a contract if he is not a free agent (Lee & Detta , 2009).
In another case, Chikkam Ammiraju vs. Chikkam Seshama (1918) [32 MLJ 494] the situation arise before the Madras High Court was whether coercion could be involved by a threat to commit suicide. According to this case, Hindu by a threat of suicide persuaded his son and wife to conduct a released deed in favor of his brother in respect of particular properties demanded as their own by the son and the wife. In that case, the question was for the court whether a threat to commit suicide could be deliberated to be an act prohibited by the Indian Penal Code. It was held by Wallis, C.J. & Seshagiri Ayyar, J. that a threat to commit suicide considered to coercion as the meaning of Section 15 of the Indian Contract Act and therefore the discharge action was avoidable (Chikkam Ammiraju Vs. Chikkam Seshamma, 1917).
Summary of Chapters
1.0 INTRODUCTION: Provides a historical overview of the development of law from the Barter Exchange Age and emphasizes the necessity of contracts in modern business transactions.
2.0 LAW OF CONTRACT: Defines the term "contract" as an enforceable agreement and outlines the fundamental requirements such as offer, acceptance, and consideration.
2.1 OFFER: Explains the process of making an offer and distinguishes between bilateral and unilateral offers.
2.2 ACCEPTANCE OF THE OFFER: Details the requirement that acceptance must be absolute and unqualified to create a legally binding agreement.
2.3 INTENTION TO CREATE LEGAL RELATIONSHIP: Discusses the necessity of mutual intent to be legally bound by words and actions.
2.4 CONSIDERATION: Defines consideration as the advantage received by a party in exchange for a promise.
2.5 CERTAINTY: Stresses that contractual terms must be clear and free from ambiguity to be enforceable.
2.6 CAPACITY: Outlines the requirement that parties must have the mental ability to understand contractual obligations.
2.7 FREE CONSENT: Examines the core requirement that parties must enter agreements voluntarily without external pressure or deception.
2.7.1 IMPORTANCE OF FREE CONSENT: Explains the "meeting of minds" and the conditions under which consent is considered compromised.
2.7.2 COERCION: Analyzes the legal consequences of threats and the use of force to induce a contract.
2.7.3 UNDER INFLUENCE: Investigates situations where a dominant party exerts influence over another to gain an unfair advantage.
2.7.4 FRAUD: Defines fraudulent acts and the legal consequences of intentional deception.
2.7.5 MISREPRESENTATION: Clarifies the difference between fraudulent acts and innocent or negligent misstatements in contracts.
2.7.6 MISTAKE: Categorizes mistakes into common, mutual, and unilateral, and determines how each affects the validity of a contract.
3.0 CONCLUSION: Summarizes the importance of free consent in maintaining the validity of contracts across different legal systems.
Keywords
Contract, Law, Malaysia, Offer, Acceptance, Consideration, Free Consent, Coercion, Undue Influence, Fraud, Misrepresentation, Mistake, Void Contract, Voidable Contract, Legal Agreement
Frequently Asked Questions
What is the primary focus of this work?
This work examines the legal framework governing contracts, specifically under the Malaysian Contract Act 1950, highlighting the essential elements required for a contract to be valid and enforceable.
What are the central themes discussed in the text?
The central themes include the formation of agreements, the definition of key contractual terms, and an in-depth analysis of factors that vitiate consent, such as coercion, fraud, and mistake.
What is the primary research goal?
The goal is to explain how "free consent" serves as the foundation for a valid contract and to categorize the different legal ways in which this consent can be invalidated.
Which scientific or legal methodology is applied?
The work employs a doctrinal legal research methodology, utilizing statute analysis (Contract Act 1950) and case law precedents to interpret legal principles.
What topics are covered in the main body?
The main body covers the essentials of a contract (offer, acceptance, intention, consideration, certainty, capacity) and a detailed breakdown of elements that render a contract void or voidable.
Which keywords best describe the document?
The document is best described by keywords such as Contract Law, Free Consent, Voidable Contract, Coercion, Fraud, and Misrepresentation.
How does the author define a "voidable contract" in the context of undue influence?
A contract is deemed voidable if one party is in a dominant position and uses that position to exert influence, effectively stripping the other party of the ability to provide free, independent consent.
How does the text distinguish between common and unilateral mistake?
A common mistake occurs when both parties share the same error, often leading to a voidable contract. A unilateral mistake, where only one party is mistaken, generally does not invalidate the contract.
- Arbeit zitieren
- Md Moniruzzaman Kiron (Autor:in), 2018, The Importance of the Law of Contract, München, GRIN Verlag, https://www.grin.com/document/422266
