In conclusion, Section 2(d) had said thatJimmy should make a payment of RM300 to Jackson while Section 26(b) indicatedthat Jimmy no need to make payment.
By the way, Section 26(b) which is aspecific section will be the section that always prevails than Section 2(d)which is a general section. So, it is arguable that Jackson is not providedwith a valid consideration. Thus, Jimmy no need to make payment of RM 300 toJackson. In order to determine whether Jimmy needsto pay RM 300 or not, two section of law is involved. Firstly, the law underSection 2(d) said that if the act the promised is done by a party, theconsideration is deemed as valid. This shows that there is a valid contractbetween these two parties.
Thus, Section 2(d) indicated that there is acontract between Jimmy and Jackson, and Jimmy should make payment of RM 300 toJackson as promised. When it comes to Section 26(b), it said that when apromised to do something had been done, and the person who doing such act isvoluntarily done this, the contract is valid. By the way, the case of Jimmy andJackson show that Jackson is requested by Jimmy to fetch him to Melaka and thisindicate that Jackson is not voluntary doing such act. Therefore, in the caseof Jackson is not voluntary fetch Jimmy, the consideration is deemed as notvalid. Thus, Jimmy may not necessary give the transportation fee of RM 300. A part from that, one of the elementswhich are consideration is involved in the case of Jimmy and Jackson. This willbe the most important element since that it is an indicator to define thecondition of a contract. The case had undergoes executed consideration which isdefined as a party who already guarantee to pay an amount of money for anotherparty in order to request that particular party to act something.
Because ofthe executed act, the party who promised to pay the money should achieve thatpromise too. By the way, this case alsoproved the existence of past consideration which is the promisee has donesomething in the situation that the promisor required. Therefore, the case shown that Jimmy requestJackson to fetch him to Melaka with the promised that he will pay RM300. But,Jackson had not received the payment after the act had done and Jimmy was notagreed to pay with the reason that he is not seriously when offer such request.
In the case, Jimmy makes an offer to hisnephew, Jackson. Jimmy agreed to rent his level 2 of shop lot to Jackson at themarket value of RM1500 for a month. The tendency contract would be prepared byJackson. However the tendency contract has included the RM300 of transportationfees and rental for the unit of level 1 with the amount of RM1500. So Jimmyrejected the tendency contract and refused to pay the RM300 for Jackson. Fromthat, the offer is an acceptance involved performance. In the section 8 of ContractAct 1950 deals with acceptance by performing condition of a proposal orreceiving consideration of a proposal.
However in the case of Doulia v FourMilbank Nominees Ltd, once offeree has embarked on performance of the conditionand it indicates the offeror cannot revoke the offer. (Anon., n.
d.)Therefore Jimmy should accept the tendency contract which made by Jackson.Although Jimmy was under impression that the rental for level 1 is RM1500.For a valid contract, it should consist ofthe element of the contract between the two parties. Firstly, there must havean offer to show the person is willingness to deal or negotiate. (Anon., 2016) The offer is apromise that not only can be made to one person, but also to the whole world.The offer must involve of communication by two parties before enter into orwithdraw from a contract.
It can be divided into Unilateral and Bilateraloffer. So both parties can make the offer by orally or written form to ensurethe acceptance has been reached. Once the offer has been acceptance by twoparties, the offer would change into contract and cannot be rejected. It meansan acceptance is the final decision to the term and condition of the offer.
Besides that, the intention parties who enter into a contract must intend tocreate legal relations. The intention to create legal relations acts aspresumed and the party would not know the term and conditions of the contract.This contract can or not to be legally bound and is not legally enforcement bylaw. (Anon.
, 2016)Furthermore, consideration is the price paid by one party to another, in orderto make the valuable promise in the contract. (Anon., n.d.
)Question3In conclusion, Jimmy nodded his head butkeep in silence is an act which fall within Section 3 of the Contract Act 1950,the contract is highly likely valid because the communication of the acceptanceis can be made in writing, or orally or by conduct. Although Jimmy is keep insilence but he nodded his head, it means Jimmy accept the offer of Jackson.offeror may give up the need for offereein anytime, so that effective communication for the acceptance is important.In the scenario, Jackson need tocommunicate with Jimmy to informed Jimmy he need to rent the level 2 shop lot,not level 1.
The tenancy agreement is stated that Jimmy will rent out his unitin level 1 to Jackson, it contain mistake in the tenancy agreement. It needvalid contract between Jackson and Jimmy, Jimmy promise to rent the unit inlevel 2 to Jackson at RM1,500 and promise to pay Jackson RM300 for thetransportation from Johor To Melaka. Due to However, in the case of Felthouse vBindley (1863), the court held that silence cannot constitute an acceptance.Sometimes the offeror may give up the need for the offeree, it need effectivecommunication to the acceptance. In the case of Felthouse v Bindley (1863) isan uncle, Paul Felthouse offered to purchase a house from his nephew, JohnFelthouse. On 2 January, Paul Felthouse replied a letter to John Felthouse, itstated that if Paul Felthouse didn’t hear anything from John Felthouse, heconsider the horse is own by him at £30 15s’. In February, John Felthouse soldall his farm stock in an auction, John Felthouse was busy in the auction anddid not reply the letter of Paul Felthouse.
John Felthouse advised theauctioneer, Bindley not to sell the horse because he decided to sell the horseto his uncle. The auctioneer forgotten the command and accidentally sold thehorse to the third party. Paul Felthouse sued the auctioneer, Bindley inconversion (FANDOM, 2014).
The Court of CommonPleas said there was no valid contract between Paul Felthouse and JohnFelthouse so that the possession of the horse is still belong to JohnFelthouse. To success in an action for conversion, Paul Felthouse needed toshow that he owned the horse at the time of sale, he need to have a validcontract between himself and his nephew for the sale of the horse. JohnFelthouse did not accept the offer so that there was no communication ofacceptance between Paul Felthouse and his nephew before the sale. To be legallybinding, communication is important.
Silence does not equal to acceptance (liuk, 2017). It can determine through Section 3 ofcontract act 1950. In Section of contract act 1950, it said that the proposalof acceptance, communication and its revocation can be done through any act orany omission. (muzoo93, 2017) In this case, since Jimmy have noddedhis head while Jackson is offering him.
Thus, the act of nodded head can beconsidered as Jimmy accepted the offer from Jackson already. So, although Jimmykeep in silence when Jackson offer him, but Jimmy nodded head, so the contractis highly likely valid. The issue that need to discuss is whetherthe contract is valid or not valid if Jimmy nodded his head and keep in silencewhen Jackson made the offer to him which is to rent to second floor shop lotsfrom Jimmy. Question2If there is an exception to Section 17 inContract Act 1950 which is Section 19 in Contract Act 1950, the contract is notvoidable at the option of the party if the truth can be discovered in normaldiligence.However, fraud is very difficult toestablish as it required Jimmy to prove Jackson’s intention which require veryhigh standard.
If fraud cannot be establish, Jimmy is advised to proceed tomisrepresentation. Under Section 18 of the Contract Act 1950, it provides thatmisrepresentation include any positive assertion, in manner not warranted by the information of theperson making it, of that which is not true, though he believes it to be true,or any breach of duty which, without an intent to deceive, gives an advantageto the person committing it by misleading another prejudice and causing,however innocently, the other party to make a mistake as to the substance ifthe thing which is the subject of the agreement.On the fact, Jackson knowing that themarket rate is at least RM3, 000 but he informed Jimmy that based on hissurvey, the market rate for the unit on the 2nd floor is around RM1,500.
Secondly, Jimmy agreed to rent the unit at level 2 to Jackson but Jimmynoted that the tenancy agreement indicated out that Jimmy will rent out hisunit in level 1 of My Town to Jackson. Jackson had the intention to active concealmentof a fact by one having knowledge or belief of fact.Under Section 17 of the Contract Act 1950,it provide that “fraud” includes any of the following acts committed by a partyto a contract, or with his connivance, or by his agent, with his intend todeceive or to induce another party to enter into the contract. First of fore isthe suggestion, as to the fact, of that which is not true by one who does notbelieve it true. Secondly, the active concealment of a fact by one havingknowledge or belief of fact.
Thirdly, a promise made without any intention toperform it. Fourthly, there is any other act fitted to deceive and such act oromission as the law specifically declares to be fraudulent. Next discussion is whether there is anyvitiating factors in the contract between Jimmy and Jackson. In this questionis highly likely that there are two possibly vitiating factors and must bedistinguish which are fraud and misrepresentation. For Jimmy and Jackson`s case is only focus onoffer and acceptance. In the case of Jimmy and Jackson, the offer made on 1stOctober 2017 which Jackson expressed his interest to Jimmy to rent shop lotlocated in MyTown, and the acceptance was on 14th October 2017 whichJimmy agreed on Jackson’s request. According to Section 3 of the Contract Act1950, thecommunication and acceptance ofproposals are deemed to be made by any act or omission of the party acceptby which he plans to communicate the proposal or acceptance, and which has theeffect of communicating it.
(NOTE) On the fact that although Jimmy has agreed torent his level 2 shop lot to Jackson at the said market price, but Jacksoninformed Jimmy that the tenancy agreement will be get ready for sign by bothparties. The issue is that when is the acceptance occur. In the case of Low KarYit & Ors v Mohd Isa & Anor (1963), the court held that parties do not intend that the agreement contractually bind themselves. However,they intend that only subsequent formal contract bind themselves when theyenter into the formal contract and the acceptance established only if thecontract is signed. Thus, there was no binding contract formed between bothparties.
(NOTE) Besides, in the case of Charles Grenier SdnBhd v Lau Wing Hong (FC) (1997), the court held that the phrase, ‘subject tosales and purchase agreement’ which does not indicates that the intention thatno contract will exist until the formal sales and purchase agreement is beingsigned. (NOTE) In this case, althoughthe formal agreement is made later, but the parties already agreed on what theyhad discussed where the acceptance was established, thus, the court held thatthere is a valid contract has been formed. (NOTE)Jimmy may use the case of Low Kar Yit & Ors vMohd Isa & Anor (1963) to argue that the acceptance is barely establishonly if the contract is signed. However, Jackson may use the case of Charles Grenier Sdn Bhd v Lau Wing Hong (FC) (1997) to argue that Jimmyhad agreed on his request which means both parties already have consensus,although the tenancy agreement was made on 1st November 2017.
Hence,Jackson likely to win by using the fact in the case of Charles Grenier Sdn Bhdv Lau Wing Hong (FC) (1997). The question above is required to discusswhether there are any vitiating factors in the contract between Jimmy(Plaintiff) and Jackson (Defendant). First of all, the issue is that whetherthe contract between Jimmy and Jackson has been formed. In order to form avalid contract, there must be an offer, acceptance, consideration and intentionto create legal relation. There are two types of offer which is bilateral andunilateral offer. Bilateral offer is a mutual arrangement between both partieswhere one party promises to act in exchange for another party to act (Investopedia, n.d.
), whereas, unilateraloffer is a promise which is legally enforced which one party is agreed to payanother party if another party fulfil certain duty. (Investopedia, n.d.
) Next, acceptance must be communicated.According to Section 2(b) in Contract Act 1950, when one party is agreed on theproposal made, the proposal is deemed to be accepted. Once it is accepted, the proposalbecomes a promise.
(lawnotes.in, n.d.)Besides, consideration is a benefit thatnegotiate between both parties and it is an indispensable reason for party toenter into the contract. (LAW.COM, n.d.
) Moreover, legal to create legalrelations indicates that once the offer has been accepted which means that bothparties have intention to enter legally binding contract. (Law Teacher, n.d.)