QUESTION 1 (25 MARKS)

(a) Describe the basic elements of a valid contract. 4 (15 marks)

Discuss the basic elements of a valid contract. (25 marks)

*(b) Section 16 (5) of the Companies Act 1965 states “…the company shall be a body
corporate by the name contained in the memorandum capable forthwith of exercising all the
functions of an incorporated company…” Discuss. (10 marks)

*(b) Explain the following cases and the law that has been discussed in each of
them: -

i) Pharmaceutical Society of Great Britain vs Boots Cash Chemist Ltd; (2 marks)

ii) Tan Soh Sim, Chan Law Kiong & ors vs Tan Saw Keow & ors; (2 marks)

iii) Springer vs Great Western Railway Company; (2 marks)

iv) Great Northern Railway Co. vs Swaffield; (2 marks)

v) Beale vs Taylor. (2marks)

*QUESTION 2 (25 MARKS)

Describe the separate entity doctrine and discuss five exceptions to the general legal principle
that a company is a person separate from its directors.

QUESTION 3 (25 MARKS)

(a) Fire Smelters Berhad has agreed to sell a melting furnace to Mangkuk Sdn.
Bhd. and has given an undertaking that the melting furnace would have a
temperature of not lower than 1427 degree celcius. Fire Smelters Berhad
delivered the furnace but the specification was not fulfilled, i.e. the furnace
could only reach a temperature of 1000 degree celcius. Advise Mangkuk Sdn.
Bhd. 3 (13 marks)

Chan Furniture has agreed to sell a melting furnace to Rita and has given an
undertaking that the melting furnance would have a temperature of not
lower than 1500 degree celcius. Chan Furniture delivered the furnace but
the furnace could only reach a temperature of 1427 degree celcius. Advise
Rita in regards to the matter. Support your answer by discussing the law
involved and the decided cases. (10marks)

Matahari Sdn Bhd has agreed to sell a melting furnace to Ice Sdn Bhd and
has given an undertaking that the melting furnance would have a
temperature of not lower than 1500 degree celcius. Matahari Sdn Bhd
delivered the furnace but the furnace could only reach a temperature of
1427 degree celcius. Advise Ice Sdn Bhd in regards to the matter. Support
 your answer by discussing the law involved and the decided cases. 1
(10 marks)

*(b) Sam buys a bag of charcoal from Utama Jaya so that his family can enjoy themselves
sitting around the fireplace in their flat. Unfortunately, the bag of charcoal contained
an explosive device which exploded when Sam lit the fire. Sam was badly injured.
Advise Sam. (12 marks)

(b) Honda Motor Sdn Bhd advertised in the newspaper that they are selling a
new 2003 model of Honda City. Upon seeing the advertisement, Awang
immediately call Honda Motor Sdn Bhd to make an appointment to view and
test the car. The next day after having satisfied with the said car, Awang
decided to buy it. After making payment and upon delivery of the said car
to Awang, Awang discovered that the rear half of the car was part of a 2002
model. Discuss whether Awang could take action against Honda Motor Sdn
Bhd and why. Support your answer by discussing the law involved and the
decided cases. 2 (10 marks)

QUESTION 4 (25 MARKS)

(a) Define a “partnership”. 4 (5 marks)

(a) Define a “partnership” under the Malaysia’s Partnership Act 1961. (5 marks)

(b) Jose who is setting up a business in Kuala Lumpur would like to know how
an agency may arise or be created in Malaysia. Advise Jose.
4 (10 marks)

(c) Describe the ways in which an agency can be terminated. 3 (10 marks)

QUESTION 4 (25 MARKS)

(a) State the legal principle on company law established by the case of Salomon
vs Salomon & Co. Ltd. (1897) AC 22. 2 (10
marks)

*(b) Discuss how unwritten laws can form part of the laws of Malaysia. (15 marks)
*(b) One of the sources of Malaysian law is English law. Explain how English law and the
other sources form part of the law of Malaysia. (15 marks)

QUESTION 5 (25 MARKS) 3

(a) What is the main difference between a void contract and a voidable contract?
(5 marks)
(b) What are the three (3) ways in which a contract may be discharged?
(5 marks)
(c) Describe the three (3) most important remedies available for breach of
contract. (5 marks)

(d) Alex and Jose entered into a contract. As a general rule, can a third party,
Roy, sue Alex when Alex commits a breach of contract? Give reasons for
your answer. (5 marks)

(e) What is the meaning of “counter-offer” in relation to law of contract?

(5marks)

*QUESTION 6 (25 MARKS)

(a) What are the rights and liabilities of a guarantor under a hire-purchase agreement?
(10 marks)

(b) Amir bought a car from Honda Motor which was financed by Ambank Berhad. When
Amir defaulted in making two (2) monthly instalment payments and after due
compliance with the Hire-Purchase Act, the car was repossessed by Ambank Berhad.
Discuss the rights of Amir under the Hire-Purchase Act 1967.
(15 marks)

*(a) What is the difference between a “condition” and “warranty” in relation to

the law of sales of good? (5 marks)

*(c) Explain the following terms: -

(i) merchantable quality;

(2 marks)

(ii) fit for purpose;

(2 marks)

(iii) sale by sample;

(2 marks)

(iv) “nemo dat quod non habet”;

(2 marks)

(v) transfer of property;

(2 marks)