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ISSUE
English law/common law
Islamic Law
RULE OF LAW/ARTICLE
Section 3 and 5 of the civil
Law Act 1956
Article 121(1A) of the
Federal Constitution
Private law-tort law
CASE
Jamil bin Harun v Kamsiah
Divorce,khalwat,childen
custody etc
...
Carried on biz in common
Choi Siew Cheong
With a view of profit
Gulazam v Noorzaman
CASE DESCRIPTION
-Mrs Donoghue drank a
bottle of ginger beer in a
café in UK
-A snail was in the bottle
-she fell ill & sued Mr
Stevenson
-manufacturer owed a duty
of care to her, was breached
-failure to ensure the
product’s safety would lead
to harm of consumers
-result:Mrs Donoghue
managed to claim ₤500 as
damages(compensation) in
this case
...
-whether the alleged libel
had in fact occurred was
never decided
-as the Special Court ruled
4-1 that non-Malaysians
could not bring a suit
against the Malay rulers
...
-1 party contributed land
while the other party
developed & carried out the
project to build houses
...
-court held: all essential
elements, including ‘with a
view of profit’ were present
to constitute partnership
...
Court held: on the death of
any partner, a partnership
therefore stands dissolved
unless there is evidence that
the partners had agreed
otherwise
...
-The court held that it was
dissolved
...
-court held: that it was
calculated to be detrimental
to the partnership biz as the
conviction was for
dishonesty
...
-Salomon then ran the
company as its director
...
-debts of the company
responsibility of the
company & not its
members
...
May Sue& Be sued in its Own
Name
Foss v Harbottle
Having perpetual succession
Re Noel Tedman Holdings
Having Ownership of Its Own
Property
Section 16(5) of the
Companies Act 1965
Macaura v Northern
Assurance Co Ltd
Members’ Liabilty Are Limited
Section 16(5)
Re Application by Yee Yut Ee
Common Law exceptions
When a company is formed to
avoid legal obligations/ to
commit fraud
...
-he sued the defendants who
were the promoters of the
company
...
-the proper plaintiff was the
company itself(board of
directors)
-if a company breaches its
contracts/incurs legal
liabilities
-the company must be sued
-The members cannot be sued
for any liability of the
company
...
-Macaura owned land with
timber thereon
-he sold the land & all the
timber to a company that he
formed
...
-The timber was destroyed in
a fire
-He claimed against the
insurance company to recover
his loss but the insurance
company refused to pay
...
-a director is not liable for the
debts of the company
-Lipan agreed to sell certain
freehold land to Jones
...
-to avoid the performance of
such contract, Lipman
incorporated a company
...
-Jones sought specific
performance of the
agreement against the
company
...
-court held: the transfer of the
property to the company was
solely for the purpose of
defeating Jones’ right in the
contract
...
The plaintiffs were
the owner of certain
premises on which
Birmingham Waste
Co Ltd carried on
business
...
The premises were
then acquired by
the defendant
...
Smith claimed for
compensation from
the defendant
...
The court held that
Smith was entitled
for the
compensation since
the Birmingham
Waste Co Ltd was
carried on for
Smith
...
Common Law exceptions
Groups of Companies
DHN Food Distributors Ltd
DHN was the
holding company in
a group of three
companies which
running a grocery
business
...
The other
subsidiary, DHN
Food Transport Ltd
owned the vehicles
used by DHN
...
DHN sought
compensation both
for the land and for
disturbance of its
business
...
The court held that
the Council must
pay them
...
Fact:
-A controlling
director was
about to retire
and he wanted to
make some
financial provision
for his wife
...
Director’s duties under
common law
Duty to use powers for a
proper purpose
Bishopsgate Investment
Management Ltd v Maxwell
(No
...
Held:
-The service contract was
for the benefit of the wife
and not bona fide in the
interest of the company
Facts: the director
used his powers
to authorise
document
transferring the
company’s assets
to a third party in
which he had an
interest, for no
good corporate
purpose or
reason
...
Director’s duties under
common law
Duty To Avoid Conflict of
Interest
North West
Transportation Co
Ltd v Beatty
Facts: A company
entered into a
contract to
purchase chairs
from a
partnership
when, at the
time, one of its
directors was a
partner in the
partnership
...
Facts: A director
was allowed to
vote as a
shareholder in
general meeting
on a resolution to
ratify a contract
for the sale of a
Duty To Avoid Secret Profit
Duty To Act With Care, Skill
and Diligence
Duty To Act With Care, Skill
and Diligence
Regal (Hastings) Ltd v
Gulliver
A director also has a duty
to exercise reasonable care
and skill in the performance
as a company director
...
ship to the
company of which
he was the sole
owner
...
It might have
been different if
the price was
extortionate
...
Re City Equitable
Fire Insurance Co
Ltd
Held: A director
need not exhibit,
in the
performance of
his duties, a
greater degree of
skill than may
reasonably be
expected from a
person of his
knowledge and
experience
...
A director should
maintain
familiarity with
the financial
status of the
company by a
regular review of
financial
statements
...
- Section 2(a)
of the
Contracts Act
1950
-Section 9 of
the Contracts
Act 1950
Case: Re D’Jan of London
Limited
Boulton v Jones
(1857)
Fact: The company's
director signed the
company's insurance
policy without even
reading its contents
...
Directors
have a continuing duty
to acquire and
maintain a sufficient
knowledge and
understanding of the
company’s business to
enable them properly
to perform their duties
as directors
...
Defendant offered to
buy some goods from
Brocklehurst but on
the day the order was
sent, Brocklehurst had
sold his company to
the plaintiff
...
However,
the plaintiff did not
inform the defendant
that the business had
changed hands
...
Plaintiff sued
the defendant for the
price
...
There was no
contract between the
plaintiff and the
defendant
...
General Offer
addressed
generally to
everyone
Carlill v Carbolic
Smoke Ball Co
An offer must be
certain/clear/complete/detail/final
...
Taylor v Laird
Carbolic Smoke Ball
Co
...
The plaintiff used the
medicine but still
contracted influenza
...
Held: the plaintiff was
entitled to the £1000
as she had accepted
the offer made to the
public
...
The court held that the
offer was not final &
incomplete
...
Taylor resigned from
being the captain of a
ship owned by Laird
during a voyage
...
After that, Taylor
claimed remuneration
from Laird for sailing
the ship home
...
Therefore, Laird
did not know about
the offer and did not
have the opportunity
either to accept or
reject the offer
...
an advertisement is
only an ITT, not an
offer
...
Pharmaceutical
Society of Great
Britain v Boots Cash
Chemist Ltd
ITT- Tender
Spencer v Harding
ITT- Price-list/Quotation
ITT- Auctioneer Inviting
Bids
1
...
An offer is made when
the customer placed
the goods into the
basket and brings
them to the counter
for payment
...
Section 10 of the Auction
Sales Act
Section 7(a) of the
Contracts Act 1950
Preston
Corporation Sdn
Bhd v Edward
Leong & Others
Hyde v Wrench
The defendant
offered to sell his
estate to the
plaintiff for
£1000
...
When the
defendant
refused to accept
this counter offer,
the plaintiff wrote
again to accept
the original offer
...
Eliason offered to
buy flour from
Henshaw,
requesting that
the acceptance to
the offer should
be sent to Eliason
at Harper’s Ferry
by the wagon,
which brought
the offer letter
...
Henshaw was
wrong
...
The court held
that Eliason was
entitled to reject
the acceptance
made by
Henshaw
...
Low Kar Yit & Ors
v Mohd Isa
Acceptance must be
communicated
Acceptance through post
(Postal Rule)
Fraser v Everett
Ignatius v Bell
Section 4(2)(a) of
the Contracts Act
1950
...
Silence is not an acceptance
The defendant
offered to sell his
land to the
plaintiff on
condition that if
the plaintiff
would like to
accept the offer,
he must make the
acceptance on OR
before 20th
August 1912
...
The court held
that the
acceptance was
exercised by the
plaintiff when the
letter was posted
on 16th August
...
Payne v Cave
The bid at an
auction sale can
be revoked at any
time before the
fall of the
hammer
...
8th Oct: the
defendant posted
a letter to revoke
the offer
...
20th Oct: the
plaintiff received
the defendant’s
letter of
revocation
...
•
•
•
•
Revocation by lapse of
time
Case: Fraser v
Everett
Revocation by failure of the
offeree to fulfill condition
precedent to the
acceptance
...
Executory Consideration
-
The offeree can
revoke his
acceptance at any
time before or at
the moment the
letter of
acceptance
reaches the
offeror
...
K
...
Past Consideration
1
...
Lampleigh v Brathwait
Section 26(a) of the
Contracts Act & Illustration
(b) to Section 26
...
Held: the
acceptance had
been effectively
revoked by the
offeree
...
The appellant
agreed to sell and
the respondent
agreed to buy a
house from the
appellant
...
However, the
appellant refused
to perform the
contract and
argued that there
was no
consideration in
the agreement
...
Contract arises
upon executed
consideration
...
The consideration
which has been
done or
completed before
the promise is
made
...
Adequacy of
Consideration
Section 26(b) & Illustration
(c) to Section 26
Adequacy of
consideration is
not important to
form a valid
contract
...
M Wotherspoon & Co Ltd
v Henry Agency House
Phang Swee Kim v
Beh I Hock
defines the term
of ‘voluntary’ as
the acts
performed/done
by one’s own free
will
...
However, the
respondent later
refused to
perform the
contract claiming
that the promise
was
unenforceable
because of
inadequacy of
consideration
...
Consideration Need Not
Come From the Promisee
Section 2(d)
Venkata Chinnaya v
Verikataramaya
but they are not
‘nearly related’ to
the family of their
adoptive mother
...
It must be
registered
...
A sister agreed to
pay an annuity to
her brothers who
provided no
consideration for
the promise
...
However, the
Part payment by a 3rd party
in discharge of a debt
under Section 64 of the
Contracts Act- illustration
(c) to Section 64
...
Held: She was
liable to pay the
annuity even
though the
consideration
moved from her
mother, not from
her brothers
...
Later, he applied
to the court for an
order setting
aside the
contract
...
The
court ordered the
restoration of the
land to minor
...
Therefore, the defendant
was liable for the
repayment of the sum
expended for his education
and training
A minor is bound
by a contract of
employment so as
to provide himself
with the means of
self-support or
beneficial
experience in a
profession to fit
him for his life
...
Contracts By Insane Or
Drunken Person
Section 11, Section 12(1)
and Illustration (a) & (b) of
Section 12
...
Provided that:
(a) It must be proved
...
Social, Domestic And
Family Agreement
the law presumed that
there is no intention create
legal relation
...
If the minor is
under the age of
16 years old, a
written consent
of the parents is
essential
...
However, the
appellant
defended that the
sale was ‘subject
to a formal
contract’ to be
made later and
agreed upon
between the
parties
...
Defendant was a
civil servant
stationed in Sri
Lanka
...
His wife had to
stay in England
Merrit v Merrit
and unable to
follow the
defendant to Sri
Lanka because of
her poor health
...
Held: the
defendant’s
promise was not a
legally
enforceable
contract because
the agreement
was a family and
domestic
agreement and
therefore it is
presumed that
the parties did
not intend the
promise to be
legally binding
contract
...
The husband left
the matrimonial
home which was
in the joint names
of the husband
and the wife
...
When such
payment had
been completed,
the husband
agreed that he
would transfer
the house to the
sole ownership of
the wife
...
However upon
completion of the
payment, the
husband refused
to transfer the
house to the wife
...
Therefore, the
house must be
transferred to the
wife
...
Respondent
purchased houses
to be constructed
by the appellant
...
However, the
respondents were
forced later to
pay an additional
RM 4000 under a
threat by the
appellant to
cancel the
respondents’
booking for their
houses
...
Kheng Chwee Lian v Wong
Tak Thong
The plaintiff’s
husband executed
a conveyance (the
transfer of
ownership) of
property
belonging to
himself and the
plaintiff to B and
C, his brothers
...
Held: the burden
of proof lay on B
and C to show
that the plaintiff
fully understood
the transaction
and executed the
conveyance freely
and without being
subject to undue
influence
...
The respondent
had been
persuaded to
enter into a 2nd
contract on the
false
representation
that the area of
the land to be
transferred was
of the same size
as the land which
the respondent
had agreed to buy
under the 1st
contract
...
The respondent
has the right to
repudiate (reject)
the agreement
...
Tan Chye Chew v Eastern
Mining Metals
Innocent / negligent
misrepresentation
Archer v
...
However, the
misrepresentatio
n does not make
the contract
voidable if the
misled party had
the opportunity
to investigate and
ascertain the
truth of the
representation
...
The representee is
therefore entitled to apply
to a court for a decree of
rescission from a court and
also to an award of
damages
There had been a
misrepresentatio
n by the 2nd
appellant
...
The respondent
had entered into
the contract
without checking
the true position
at any time
despite having
the facilities to do
so
...
2 parties
contracted for a
sale of a cargo of
Mistake as to the possibility
of performing the contract
Section 66
Sheikh Brothers v Ochsner
•
cotton arriving in
London by a ship
called ‘The
Peerless’, sailing
from Bombay
...
They were both
negotiating under
a mistake and had
in mind different
ships
...
The appellant
granted to the
respondent,
license and
authority to cut
and manufacture
all sisal (a plant
that yields a stiff
fibre traditionally
used in making
twine, rope and
also dartboards)
growing on 5000
acres of land in
Kenya and to
deliver to the
appellant 50 tons
per month of sisal
fiber for sale
...
Held: it was a
mistake as to the
possibility of
performing the
contract
...
Effect: The
contract is void
...
If any of the
parties has
received any
advantage
through the
agreement, he is
bound to restore
it (Section 66)
...
Yong Ung Kai v Enting
Warranties
Section 12(3) of the Sale of
Goods Act 1957
Steinke v Edwards
The High Court implied a
term that a contract for the
sale of timber was to be
subject to the obtaining of
the necessary license
because ‘it must have been
in the minds of the parties’
...
Plaintiff sought to
recover the
amount he had
paid for the tax,
from the
defendant
(seller)
...
The plaintiff were
consignees of
cotton sewing
thread and were
shipping on board
of a ship
belonging to the
first defendant
...
The plaintiff sued
for damages for
breach of
contract
...
The second
defendant , the
Port Swettenham
Authority, denied
all liability and
relied on Rule
91(1) which
states, “the
authority shall
not be liable for
any loss…of
goods…from any
cause unless such
loss…has been
caused solely by
the misconduct or
negligence of the
authority or its
officers or
servants
...
An exemption clause was
held to be invalid as it did
not only limit but wholly
excluded the liability of the
Port Authority for the loss
of any goods caused by
their own misconduct or
negligence
Discharge By Performance
Section 38(1) of the
Contracts Act 1950
Section 42
Haji Nik Ishak v Nik Zainab
Held: Since the
appellant had
agreed to accept
performance of
the contract from
a third party, he
could not enforce
it against the
respondent
...
However, the hall
was accidentally
burnt down
before the date of
•
Discharge By Breach of
Contract
Rescission of Contract
Based on Section 65
Muralidhar Chatterjee v
International Film Co
...
Special damages for any special
loss sustained
Ban Hong Joo
Mine Ltd v Chen
& Yap Ltd
the concert
...
The Federal Court
ruled that the
deliberate refusal
of the appellants
to make
payments for
work already
done and their
order to the
respondents to
stop work left the
latter with no
option but to
treat the contract
as having been
repudiated and to
sue for payment
for the work
which had been
done
...
Victoria Laundry v Newman
Industries Ltd
Specific Performance
Section 11(2)
Section 21 of the
Specific Relief Act
1950
...
Syed Ahmad v
Loh Koon Moy
...
Newman agreed to
sell to Victoria a
secondhand and to
deliver on 5th June
...
Held: the laundry
profits were
recoverable as
Newman must have
foreseen their loss if
there was delay
...
the court granted a
perpetual injunction
by ordering the
defendant who was
landlord of the
plaintiff, to keep all
communication pipes
in proper repair and
to comply with all
regulations of the
Waterworks
Department so that
water supply to the
premises rented by
the plaintiff would
not be disconnected
...
Planche contracted
with Colburn to write
a volume of journal
for a fee of £100
...
The contract could
not therefore be
completely
performed
...
Held: Colburn had
repudiated the
contract and Planche
was entitled to treat
it as discharged and
recover a Quantum
Meruit for the work
he had already done