Suggested Problamatic Question QUIZ 2 LAW299 PDF

Preview

Summary

SUGGESTED SOLUTIONTUTORIAL 2Rohaya has worked as a housekeeper for Datuk Bashir for the past twentyyears. She has now retired from work and plans to go back to her village.In appreciation for her long and loyal service, Datuk Bashir offered to sellhis 1-year-old Nissan Teana car to Rohaya for RM10,0...

Description

SUGGESTED SOLUTION TUTORIAL 2 Rohaya has worked as a housekeeper for Datuk Bashir for the past twenty years. She has now retired from work and plans to go back to her village. In appreciation for her long and loyal service, Datuk Bashir offered to sell his 1-year-old Nissan Teana car to Rohaya for RM10,000. Rohaya gladly accepted the offer but when she wanted to pay for the car, Datuk Bashir changed his mind and refused to go through with the contract on the ground that the price of the car was too low. Advise Rohaya. (10 marks) ANSWER :

Whether Rohaya can take legal action against Datuk Bashir for breach of contract? Consideration is an essential element to make a contract and must be provided for a contract to be legally binding. Section 2(d) of CA 1950 provides that "When the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or abstain from doing, something at the desire of the promisor, such act or abstinence or promise is called a consideration for the promise,". Here consideration refers to something that has value in the eyes of the law. Thus, the promisee must give something in return for the promise made by the promisor. On the other hand Section 26 of CA states that an agreement made without any consideration is void. Besides that, consideration can be in forms of act, abstinence or promise to perform a future or abstinence. For the consideration to be valid, it must have some value in the eyes of law, legal and sufficient. The adequacy of consideration is not to be considered under law of contract as what is importance is the consideration must be sufficient. In other words, simply because the consideration is not adequate, the agreement to which the consent of the party is freely given is still valid. Nevertheless, the inadequacy of consideration may be taken into account by the court in order to determine whether the consent is freely given or not. For instance, in the case of Chappell v. Nestle , the court held that offering anything of any economic value is considered as a sufficient consideration. Similarly in the case of Thomas v. Thomas , the husband of the claimant wished to let his wife have his house once he died. His executors agreed with the claimant, “in consideration” of her dead husband’s wishes, that she would have the house so long as she

maintained it and paid a £1 annual rent. It was held that the £1 annual rent and keeping it well maintained was good consideration even though it is not adequate. The court in this case also pointed out that consideration must be “something which is of some value in the eye of the law” In our present case we can see that Datuk Bashir offered to sell his 1-yearold Nissan Teana car to Rohaya for RM10,000. When Rohaya accepted the offer, Datuk Bashir changed his mind and refused to go through with the contract on the ground that the price of the car was too low. In this circumstances, Datuk Bashir is not entitled to do because consideration given by Rohaya amounting to RM10,ooo is sufficient though it might not be adequate. Reference can be made to the case of Chappell v. Nestle , where the court held that offering anything of any economic value is considered as a sufficient consideration. Moreover, in the case of Thomas v. Thomas , the court held that the £1 annual rent and keeping it well maintained was good consideration. As a conclusion, it is submitted that Rohaya can take legal action against Datuk Bashir because the agreement has been breached....