Assigment Business Law
Assigment Business Law
Assigment Business Law
Answer :
In a judicial process, among the things that form the basis of decision-making among the judges is the use of Binding Precedent Doctrine. Binding Precedent Doctrinal works through two ways , Upright (vertical) and Transverse (horizontal). Upright (vertical) is a Higher Court binding court below ourt under the above bound. Transverse (horizontal) is a court-one bound by its own decisions previously made.
In short, a binding precedent means when determining a dispute before the courts, judges will follow what their predecessors had decided earlier in a similar situation. If the judge fails to follow a binding precedent, the decision of the said judge will be legally wrong and it may be reversed on appeal or overruled in a later case.
QUESTION 2 (7 marks) Does silence amount to acceptance? Kindly support your answer with evidence. Answer : Acceptance is one of the fundamental elements for making a binding contract. It is essential to determine when an acceptance is complete and a binding contract emerges. At the beginning of a business contract, the parties negotiate among themselves to buy certain goods or real property. When this negotiation takws a long time, it becomes difficult to determine when an effective acceptance has taken place (Mulcahy and Tillotson, 2004; Ball, 1983). The general rule is that silence cannot amount to acceptance. However, there are exceptional instances where by silence may amount to acceptance itself. The rationale behind this general rule is based on the idea that acceptance must take some form of objective manifestation of the offerees intention though some form of pos itive action. This is to ensure that no one should be able to enforce a contract upon an unwilling party.
Silence cannot constitute an acceptance on the part of the offeror. For example, the offeree says: I want to buy your Proton Perdana car for RM50,00 0 and if you are silent on this proposal, I will presume that you have accepted my offer. If the seller is silent, can the offeree say that there has been an effective acceptance by the silence of the offeror and a binding contract has emerged? The answer is no, the law clearly states that silence cannot constitute an effective acceptance. The acceptance must be express and clear (OSullivan and Hilliard, 2006; Mulcahy and Tillotson, 2004).
Silence does not necessarily indicate that there is acceptance. A common phrase in the law is that "Silence is compliance." This refers to very specific contexts, usually in litigation. For instance, if a party is sued, and it fails to contest any of the specific allegations in its reply, it is considered to have admitted that allegation as true. In other
contexts, silence is not acceptance. For instance, in making contracts, silence is almost never considered acceptance.
QUESTION 3 (9 marks) A consideration must be adequate. Do you agree with the statement? Is a contract without adequate consideration void? Support your answer with cases and statutes whenever necessary. Answer :
Consideration need not be adequate, but must be sufficient. There is no requirement that the consideration must be at market value, as long as the promise provides something in value i.e. 2 for an exchange of a car would be valid. The courts are not concerned the adequacy.
Under the Malaysian Law, explanation 2 to Section 26 of Contracts Act 1950 provides that an agreement to which the consent of the promisor is not void merely because the consideration is inadequate; but the inadequacy will be question by the court whether the consent of the promisor is freely given. The illustration (f) to Section 26 of Contracts Act 1950 clearly states the application of the rule: A agrees to sell a horse worth RM 1,000 for RM 10. A's consent to the agreement was freely given. The agreement is a contract notwithstanding the inadequacy of the consideration. This was illustrated in the case of Phang Swee Kim v Beh I Hock (1964), the respondent's solicitor notified the appellant that she had trespassed on the said land and claimed for vacant possession and for an account of all income received by her from the land. In May 1963, the respondent instituted an action against her claiming the relief stated. The appellant counter-claimed for a declaration that she was entitled to the said land. At the hearing, the appellant contended that there was an oral agreement made between her and the respondent in which the respondent agreed to transfer the land to her on payment of $500 in 1958. The learned trial judge accepted her evidence, but held that the agreement is void due to inadequacy of consideration. However, on appeal the Federal Court held that by virtue of explanation 2 to Section 26 of Contracts
Act 1950, there was adequate consideration as being no evidence of misrepresentation or fraud. The appellant was therefore entitled to the declaration sought by her.
QUESTION 4 (15 marks) Is an invitation to treat an offer? Support your answer with eases, whenever necessary. Answer :
An invitation to treat is where a person or business invites people to make an offer to form a contract. It can be confused with an offer in that accepting an offer creates a binding contract, whereas accepting an invitation to treat only constitutes making an offer. An example of an invitation to treat is a store's ad in the Sunday paper. Conditional auctions (those where the winning bid is subject to the seller's approval) are also invitations to treat, but a traditional auction is an offer.
In the case of Majumder v Attorney General of Sarawak (1967) 1 MLJ 101, the Federal Court held that an advertisement in the newspaper for the post of a doctor was not an offer but merely an invitation to treat.
The clearest example of an invitation to treat is a tender (or bidding in the U.S.) process. This was illustrated in the case of Spencer v Harding (1870) LR 5 CP 561, where the defendants offered to sell by tender their stock and the court held that they had not undertaken to sell to the person who made the highest tender, but were inviting offers which they could then accept or reject as they saw appropriate. In certain circumstances though, an invitation for tenders may be an offer. The clearest example of this was seen in Harvela Investments Ltd v Royal Trust of Canada (CI) Ltd [1986] AC 207, where the defendants had made it clear that they were going to accept the highest tender; the court held that this was an offer which was accepted by the person who made the highest tender and that the defendants were in breach of contract by not doing so.
An auction may be more ambiguous. Generally an auction may be seen as an invitation to treat, with the property owner asking for offers of a certain amount and then selecting which to accept as illustrated in Payne v Cave (1789) 3 TR 148. However, if it
is stated by the owner that there is no reserve price or that there is a reserve price beyond which offers will be accepted then the auction is most likely a contractual offer which is accepted by the highest bidder; this was affirmed in the Court of Appeal in Barry v Davies [2000] 1 WLR 1962.
A shop owner displaying their goods for sale is generally making an invitation to treat (Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] 1 QB 401). They are not obliged to sell the goods to anyone who is willing to pay for them, even if additional signage such as "special offer" accompanies the display of the goods. (But see bait and switch.) This distinction was legally relevant in Fisher v Bell [1961] 1 QB 394, where it was held that displaying a flick knife for sale in a shop did not contravene legislation which prohibited offering for sale such a weapon. The distinction also means that if a shop mistakenly displays an item for sale at a very low price it is not obliged to sell it for that amount.
Generally, advertisements are invitations to treat, so the person advertising is not compelled to sell to every customer. In Partridge v Crittenden [1968] 1 WLR 1204, it was held that where the appellant advertised to sell wild birds, was not offering to sell them. Lord Parker CJ commented that it did not make "business sense" for advertisements to be offers, as the person making the advertisement may find himself in a situation where he would be contractually obliged to sell more goods than he actually owned. In certain circumstances however, an advertisement can be an offer, a well known example being the case of Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256, where it was held that the defendants, who advertised that they would pay anyone who used their product in the prescribed manner and caught influenza 100 and said that they had deposited 1,000 in the bank to show their good faith, has made an offer to the whole world and were contractually obliged to pay 100 to whoever accepted it by performing the requested acts.
For an offer to be capable of becoming binding on acceptance, the offer must be definite, clear, and final. If it is a mere preliminary move into negotiation which may lead
to a contract, it is not an offer but an invitation to treat. The offerer must have been initiating negotiations from which an agreement may or may not in time result. The important point to note is that, since an invitation to treat is not an offer, but rather a phenomenal preliminary to an offer, an invitation to treat is not capable of an acceptance which will result in a contract.
QUESTION 5 (2 marks) What is the definition of contract of sale of goods under the law? Answer :
Section 4(1) of the Sale of Goods Act defines a contract of sale of goods as a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. Thus, a sale occurs when the ownership or property in goods passes to the buyer.
Section 5(1) of the Sale of Goods Act defines a contract of sale is made by an offer to buy or sell goods at a price and by the acceptance of such an offer.
Where under a contract of sale the property in goods is transferred from the seller to the buyer the contract is called a sale ;but where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled the contract is called an agreement to sell.
An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred.
QUESTION 6 (2 marks) Does the Hire Purchase Act cover all hire purchase transactions? Answer :
Hire
purchases
agreement
are
commonly
known
as
H.P
agreement
in Malaysia and it is used by financial institutions in Malaysia to fund the purchase of consumer goods, vehicles and other business equipment and industrial machinery.
In Malaysia, The legislation governing hire purchase transactions is the Hire Purchase Act 1967, which came into force on 11 April 1968 after hire purchase became popular in the acquisition of expensive consumer goods such as cars, business equipment and industrial machinery. Purchasing cars is the most common type of hire purchase agreement in Malaysia and the repayment could served up to 9 years from the date of agreement been executed.
The Hire Purchase Act does not, in actuality, cover all hire purchase transactions. The hire-purchase transactions falling outside the scope of the said Act is governed by other general laws, such as the Contracts Act 1950. The Act only regulates hirepurchase agreements relating to goods specified in the First Schedule. However, thus Schedule may be amended by the Minister concerned from time to time.
Answer :
In Malaysia the governing law that addresses partnership matters is provided in the Partnership Act 1961 (Act 135). With regards to the extent of liabilities to be borne by an incoming partner it is best to refer to the judgment made by Suriyadi J (as he then was) in Leong Sing (sue as a firm) v. Perusahaan Kuari (Melaka Pindah) Sdn. Bhd (formerly known as Malacca Lian Hwa Sdn. Bhd [1997] 5 MLJ 657. In this case the court referred to sections 11 and section 19(1) of the Partnership Act 1961.
ii.
What is the statutory definition of partnership as provided under the Malaysian Law? Partnership is defined by Section 3(1) of the Partnership Act 1961 as the relation,
which subsists between persons carrying on a business in common with a view of profit. No person may be a partner with himself. There must be at least two or more persons to form a partnership. Section 3(2) excludes from statutory definition of partnership.
REFERENCES
Mulcahy, Linda and Tillotson, John. (2004). Contract Law in Perspective, London: Cavendish Publishing. OSullivan, Janet and Hilliard, Jonathan. (2006). The Law of Contract, New York: Oxford University Press. http://www.lawteacher.net/consideration-law/essays/consideration-in-contractformation.php#ixzz2FwUMjQRw http://en.wikipedia.org/wiki/Hire/purchase