Week1: The Malaysian Legal system

Basic framework of the Malaysia Constitution

 Head of three branches of government: Yang Di-Pertuan Agong
 Legislature
 Executive (appoints Prime Minister/Cabinet members)
 Judiciary(appoints Chief Justice/President of Appeal Court)
 Malaysia Constitution modelled on Westminster model of government
 Doctrine of separation of powers is to ensure efficacy of powers and prevent abuse
of powers

 Administration of justice falls within purview of Federal Government

 Federal courts vested with civil/criminal jurisdiction
 Federal courts enforce federal and state matters

Type of law:
 Criminal law
 Civil law
 National law
 International law
 Public-affects as a whole
 Private-affects individual, small groups

Parliament make law

Government implement law
Court enforce law
Sources of law:
 Written law
 Laws contained in Federal and State Constitution
 Much influenced by English Law
 Can only be changed by two-third majority of members in legislature
 Malaysia as a Federation of thirteen states with a written constitution
 Unwritten law
 Portion of Malaysian law which is not enacted by Parliament
 Not written in Federal and State Constitutions
 Common law decided by local customs or court
 Mainly comprised of English law

 Parliamentary supremacy does not apply in Malaysia

 Legislation by parliament, Federal list: tells us what law parliaments can make
 Enactment by State legislative assembly, State list: each state will have its own laws
(land matters)
 Ordinance by Sarawak only
#There can be a conflict: land is state matter, but aboriginal community is federal matter
Ultra vires: acting beyond someone(minister) authority
Intra vires: acting within someone’s authority

English law:
 Common law: law made by English judges in the cases (may have inequity and not
perfect law)
 And: conjunctive
 Or: disjunctive
 From peninsular, if the cases happened after 1956, the English law cannot be applied
in peninsular Malaysia
 Sabah& Sarawak treated as different from Peninsular Malaysia
 Lacunae in Malaysian Law, and suitable to local circumstance

Federal law:
 Made by Parliament (Contract Act.1950)
 #Only have two third majority in Parliament can change the law (prevent misused)

Legislation:
 Laws made by the body which has power to make law
Case law:
 Law come from cases- how did judicial precedent (to be consistent)
 Doctrine of judicial precedent-whatever decide in superior court, inferior should
follow
 In certain cases, judge makes law, as law may foresee problem

Custom law:
 Adat Temenggung: all property for son (all states)
 Adat Perpatih: all property for daughter (only negeri sembilan)
 Natives(east Malaysia) and Aboriginal people(west Malaysia)

Syariah Law
 Enacted by Federal Constitution
 Only being applied to Muslims
 Administrated by a separate court system
Doctrine of judicial precedent
 Judge made law where decision of superior law bind lower courts
 Notion that precedents are authoritative, binding and must be followed
 Ought to be defined hierarchy of court
 Define principle by which subsequent court can follow
 Exist within system a structured process of law reporting
 To ensure an accurate record of decision is made
Court structure:
Superior courts:
o High Court
o Court of Appeal and Supreme court

Subordinate courts:
o Session Court
o Magistrates court
o Penghulu’s court (W.malaysia)-head of village
o Natives Court (E.Malaysia)

Specialized court:
o Juveniles court
o Labour court
o Industrial court
o Martial court

Jurisdiction: what kind of law the court can take

Proclamation: public/official announcement dealing with great importance
Federal Constitution of Malaysia: considered as supreme law in Malaysia
Conclusion
 Malaysian law and legal system is akin to UK (wealth of common law tradition)
 Malaysian law is similar to other countries within the commonwealth whether
eastern/western
 Gradual emergence of Islamic thinking/principles in Malaysian laws
 Regionalization, globalization, internationalization pressures from begun to have an
impact on Malaysian Law to succeed to the assembled of developed nations
 Week2: Formation of contract I

Contract: an agreement between two or more parties which enforced by the law S(2)(h）

Sources of contract law:

 English contract law
Fundamental elements:
 Proposal and acceptance
 Consideration (can be form by money)
 Intention to create Legal relation
 Legal capacity (not underage, not influenced by drugs, normal person)
 Free consent (voluntarily enter into contract)
 Consent (both accepted)
 Certainty (state of being free of any doubt)
 All agreements are contracts if they are made by free consent of parties competent
to contract, for a lawful consideration and with lawful object. S. (10)(1)
Civil case:
Carlill-Plaintiff: Prior action
Carbolic Smoke Ball Co: Defendant
 Defendant state that is only advertisement
 You cannot make an offer to the whole world
 Carlill did not communicate for acceptance
 But as long as advertisement is clear, it makes a serious offer
 The only issue now is evidence-how to know Carill really follow the instruction
 The verdict was given in favour of Mrs Carill
Advertisement type:
 Clear-an offer
 Unclear- invitation to treat, not an offer

Proposal/Offer:
o When one person signifies to another his willingness to do or abstain from doing
anything, with a view to obtaining the assent of that other to the act or abstinence,
he is said to make a proposal S.2 (a)
o Once proposal accepted, legally binding agreement
o When you have no knowledge about offer, no agreement
Invitation to treat
 Distinguished with offer
 Inviting the person to whom it is made to make a proposal
 An invitation to make a bid is kind of invitation to treat
 Any goods display on the shop is invitation to treat
 Take the goods to the counter (offer), cannot sue the seller who do not sale/sell at
higher price, because seller have rights to reject your offer.
Acceptance:
o When the person to whom the proposal is made signifies his assent thereto, the
proposal is said to be accepted, proposal becomes promise when accepted S.2 (b)
o Person making proposal is called promisor, person accepting proposal is called
promisee S (2)(c)
o To convert proposal to promise, acceptance must be absolute and unqualified S.7 (a)
Counter proposal
o We have a right to say no to counter proposal
o Its too late as proposal is terminated
Communication of Acceptance S(7)(b):
 Acceptance must be expressed in usual and reasonable manner, unless the proposal
prescribes mode.
 If the offeree is not made in the manner prescribed, the proposer may, within a
reasonable time after acceptance is communicated to him, insist that his proposal
shall be accepted in the prescribed manner, not otherwise
 But if proposer fails to do so, he accepts the acceptance
 Silent does not means acceptance

Exception:
 Performance of the conditions of a proposal, or the acceptance of any consideration
for a reciprocal promise which may be offered with a proposal, is an acceptance of
the proposal (S.8)
 Waiver: Promisee said giving up the right

Postal rule:
 Communication of an acceptance completed as against the proposer, when it is put
in a course of transmission to him, so as to be out of the power of the acceptor
S.4(2)(a)
 Laws look at that time it’s posted
 Rule of convenience (must be fair to both party)
 Can be excluded expressly (clearly mentioned accept on phone only)
 Can be excluded impliedly (acceptance must come be invited/come to his writing)

Revocation of offer:
 Revocation by offeror/proposer
 Proposal can be revoked at any time before the communication of acceptance
completed as against the proposer S.5(1)
 Proposal is revoked by the communication of notice of revocation by the proposer to
other party S.6(a)
 The moment the offeree begun the act to accept the acceptance, revocation not
allowed
 Communication by 3rd party not allowed
Revocation of acceptance:
o Acceptance may be revoked at any time before communication of acceptance is
complete as against the acceptor (Malaysia law only) S.5(2)
o When the letter posted and will be reached at 10th, mind can be changed at 8th

Termination of offer
 Rejection of offer allowed by the proposer to other party S.6 (a)
 Can only change mind before communication complete
 Can be revoked by failure of the acceptor to fulfil a condition precedent to
acceptance
 Acceptance not within reasonable time
 Surrounding circumstances (common sense)
 Death/mental disorder of offeror, if the fact of his death/mental disorder comes to
knowledge of the acceptor before acceptance
 Personal contract-contract affected
 Commercial contract-other people cannot perform the contract

For a contract to be valid inlaw, it has to fit into definition & requirement provided by CA
1950.
 Week3: Formation of Contract II
Consideration
 Something given by offeree to offeror
 At the desire of promisor, promisee or any other person has done or abstains from
doing, such act/abstinence is called consideration for promise S.2(d)
 No acceptance, contracts still valid
 Consideration should not match value of subject matter (1 ringgit buying rolls-royce
is valid)
 Meaning: offeree have done, doing, do something what offeror want (money,
services)
 Every contract must have considerations
If no consideration, contracts is void unless S.26:
 Expressed in writing and registered under law
 Based on natural love affection/ standing in near relation to each other
 Is a promise to compensate, a person who has already done something for the
promisor
 Is a promise to pay a debt barred by limitation law
Three types of considerations
o Executory: formed by exchange of promise between two parties (bilateral contract)
o Executed: one party makes a promise in exchange for an act to be performed by
another (unilateral contract)
o Past: An act done before contract is made (past consideration valid in Malaysia)

Value of consideration:
 Inadequacy can be taken into account to determine whether consent given freely
 Offer must be made voluntarily, hence consideration not necessary be market value,
economic value, legal value

Waiver of performance S.64:

 Payment of lesser sum does discharge the full sum
 Payment of lesser sum by 3rd party does discharge the full sum
 Where amount owed is unascertained, creditors accept an ascertained amount, debt
is discharged
 Creditor enter into composition arrangement

Intention to create legal relations

 Essential element
 Expressed (writing) or implied (understood)
 Express-parties intention
 Implied-based in legal presumption
Commercial Agreements
 Presumption is rebuttable if circumstances are to the contrary
 If “subject to contract” (additional criteria) clauses are used
 It depends on surrounding circumstance and parties intention

Certainty of terms:
 Language used or certain term are vague
 Uncertain meaning or capable of being made certain, are void

Capacity of parties:
Made by free consent of parties (voluntarily)
For lawful consideration with lawful object
Every person is competent to contract who is of the age of majority according to law
which he is subject

Minor: every male/female attaining age of eighteen shall be at the age of majority

Exception of minor S.69:

 An person who incapable of entering into contract, is supplied by another person
with necessaries suited to his condition in life, the person who has furnished such
supplies is entitled to be reimbursed from property of such incapable person
 Contract of insurance: minor between 10 and 16 must obtain consent of parents
S.69 applicable if:
 Necessaries already supplied
 Necessaries for him, spouse or his children
 Can only claim reasonable price, not contract price
 Bound to be paid out from minor’s property
Unsound mind:
 Sound mind: the person capable of understanding the contract, able to form a
rational judgement S.12(1)
 A patient in mental hospital, who is at intervals of sound mind, may contract during
those intervals S.12 (a)
 May be permanent or temporary
 Mental disorder, influenced by drugs or alcohol
 Only one person in party has right to affirm/rescind the contract S.2(i)
 Laws protect unsound minded person
 Effect: contract is voidable at the option of the person of unsound mind if
unsoundness can be proved and the other party knows of it
Formalities:
 General rule: oral/verbal/written/conduct
 Unless any law requires a contract to be in writing S.10(2)
 Hire purchase agreement must be in writing, with minimum font size of 10
Hire-purchase act, S.26(a) & S.26(c)
Privity of contract:
 Only the party of the contract can sue
Conclusion:
 Not all contract needs consideration
 Rules must be complied for consideration to be valid
 Certain element to make a valid contract are required by CA1950 and common law
 Other elements: legal capacity/formality/certainty/intention to create legal relations
 Week4: Contents of Contract
Terms
 Something which incorporated of the contract (what contract say/contain)
 All term should be before contract (before offer accept)
 Depends on form and intention of parties
 Eg. Deposit 10%, pay after goods delivered
Expressed:
 Clearly mentioned (number of years, fees, outcome)
Implied:
o Understood commonly, make sense (assumption, expected)
o Does not write on contract, but show in court
o It must have been in the mind of the parties
o Officious bystander test, what usually neutral, common people think
o Business efficacy test, when enter into commercial transaction, term has implied
Implied by:
 Court/Common law
 Statute, which is legislation/law passed by parliament
 Custom/trade usage
Terms:
 Part of the contract
Representation:
 Statement (part of the contract)
Determine whether term or representation
 The more important it is, more likely the term
 Time taken between statement made and agreement entered
 Whether contract was written, written-term
 Precision/accuracy of statement
 Whether statement was made by person who has special knowledge/skills and the
other is ignorant of the fact (person have skills say is term, can sue if wrong advice)
 Legal obligation (driving license is required by law)
 Influence/induces other to contract (most likely term)
 Trade puff (advertisement is merely representation)
Condition/ Warranty
 Not defined in contract act, in SOGA 1957
 Condition is something essential
 If condition breached, can terminate the contract, sue for damages S.12(1)
 Warranty is something less important
 If warranty breached, cannot terminate, only can sue for damages S.12(2)
#Innominate/ Intermediate terms: neither condition, nor warranty
Condition precedent:
o Condition to be satisfied before the contract is entered
Condition subsequent:
 Something happens after contract
 Terminated after condition breached
Incorporating term:
 Once you sign a contract, you bound by it
Exclusion clause:
 Provision in contract which one party’s liability is excused in listed conditions
 The clause which said a person not liable
 Not automatically valid although have signed (CA silent about it)
 Because rule of incorporation (stated by Common law)
 Must be as clear as possible
Rules of construction
 Cannot exclude liablility from fundamental breach
 Cannot exclude from negligence, unless very clear words used
Effect of statute:
 CA silent (did not said exclusion clause is not valid)
 SOGA S.62 allows exclusion clause
 HPA S.34 does not allow exclusion clause
 CPA S.6&71 does not allow exclusion clause
Parol evidence rule:
 If a contract is inviting, oral cannot be contradicting written
 Verbal only comes into picture when written not mention
Summary:
 We are still using common law
 Business still using exclusion clause because it still not evolved
 Parliament have to start enacting laws to deal with exclusion Clause specifically
 Week5: Void and Voidable Contract
All agreements are contract if made by free consent of parties, for lawful
consideration/lawful object, are not hereby expressly declared to be void S.10(1)
Consent:
 Two or more persons agree upon the same thing in the same sense S.13
Free consent
 An essential element of a valid agreement
not caused by:
 Coercion
 Undue influence
 Fraud
 Misrepresentation
 Mistake
Types of contract
 Agreement enforced by law is a contract S.2(h)
 In voidable contract, one person can sue S.2(i)
 No one can sue in void contract S.2(g)
Coercion:
o Threatening to commit act forbidden by Penal Code S.15
o Remedies: A person to whom money has been paid, or anything delivered, by
mistake or under coercion, must repay or return it S.73
o Effect: voidable (rescind or affirm)
Undue influence:
 Must have relationship, unfairness, domination
 One party is in a position to dominate the will of the other and use that position to
obtain an unfair advantage over the other
 Presumption: where he holds a real authority over the other/where he stands in a
fiduciary relation to the other (element of trust)/where he makes a contract with
person whose mental capacity is temporarily or permanently affected by age, illness,
distress S.16(2)
 Rebuttable presumption
 Effect: voidable (rescind or affirm)
 When consent caused by undue influence, contract voidable at the option of party
whose consent so caused S.20
Fraud
 Acts committed by a party with intent to deceive another party to enter into
contract
 Making a statement which is not true S17(a)
 Actively conceal the fact/hide the truth S17(b)
 Promise made without intention to fulfil it S17(c)
 Effect; voidable (rescind or affirm)
 If no Reiance/Mere Silence to fact does not amount to fraud S.17
 Unless silence is equivalent to speech or duty of silent person to speak S.17
 Unless there is means of discovering the truth with ordinary diligence S.19
 Remedies: when one party rescind, another party should return every advantage
S.19(2)
 Additional damages/compensation can be claimed if return is inadequate S.76
Misrepresentation
 The person thought what he said is true
 assertion in a manner not warranted by the info of the person making it, give an
advantage to the person committing it, by misleading another to his prejustice,
causing a party to an agreement to make a mistake S.18
 Unless duty of the silence person to speak
 Unless there is means of discovering the truth with ordinary diligence
 A party whose consent was caused by fraud/misrepresentation, if he thinks fit, insist
that the contract shall be performed, and that he shall be put in the position in
which he would have been true S.19(2)
 The other party need not perform any promise therein contained in which he is
promisor. S65
 Effect: voidable (rescind or affirm)
 The party rescinding voidable contract bound to restore the benefit so far as may
be, to the person from whom he received it S.66
 A person who rightly rescinds a contract is entitled to compensation for any damage
which he sustained through the non-fulfilment contract S.76
Mistake:
 Where both parties to an agreement are under a mistake as to a matter of fact
essential to the agreement, the agreement is void (not valid at all) S.21
 A person whom money has been paid, or anything delivered by mistake or under
coercion, must repay or return it S.73
 When a contract discovered to be void, any person who has received any advantage
under the contract is bound to restore it to the person from whom he received itS.66
 Not voidable merely if it was caused by one party be under a mistake as to matter of
fact S.23
 If due to misrepresentation, causing a party to make a mistake as to the substance of
the thing which is subject of the agreement S.18(c)
 One party make mistake, voidable ; both party make mistake, void S.23
Consequence of rescission of voidable contact
 The other party need not perform any promise therein contained in which he is
promisor. S65
 The party rescinding voidable contract bound to restore the benefit so far as may
be, to the person from whom he received it S.66
 A person who rightly rescinds a contract is entitled to compensation for any damage
which he sustained through the non-fulfilment contract S.76
Unlawful and Void contracts
 Not made by free consent of parties, unlawful consideration with unlawful contract
 Any part of single consideration for one or more objects, or several considerations
for a single object, is unlawful, the agreement is void S.25
 Agreement made without consideration is void, unless S.26
 Every agreement in restraint of the marriage of any person, other than minor during
his/her minority, is void S.27
 Restraint of trade, profession/business unless exceptions applied S.28
 Restraint of legal proceeding unless exceptions applied S.29
Unlawful consideration/object S.24
 Forbidden by a law
 Nature that, defeat any law if permitted
 Fraudulent contracts S.24(c)
 Contracts injurious to others property or person S.24(d)
 Contract that are immoral, or against public policy S.24(e)
Contract in restraint of trade
 Agreement restrain lawful profession, trade, business is void S.28
 Exception1: person selling business goodwill agree with buyer to refrain from
carrying on similar business within specific locality and reasonable limit
 Exception2: partner of dissolved partnership agrees to refrain from carrying similar
business within specific locality and reasonable limit (partnership)
 Exception3: Partners will only carry on partnership business during its continuance
Restraint of Legal proceeding
 Not in toto (only the clause is void, not the whole contract)
 Cannot put law in contract to stop a person from going to the court,Void S.29
 Must sue within 6 years for breach of contract
 Exception1/2-Arbitration agreement
 Arbitration: only for commercial agreement, no judges/lawyers but arbitrator
(expert resolved dispute)
 Exception3-Exercise of governmental discretion for scholarship
 Government discretion: decision of government is final and conclusive
Remedies:
 No remedies since contract is unlawful/void
 When an agreement is discovered to be void, any person who has received any
advantage under the agreement or contract is bound to restore it to the person from
whom he received it S.66
 Provided party has no knowledge of illegality
Summary:
 Absence of certain elements render a contract to become void or voidable
 Void: free consent, one-side mistake, both person cannot sue but claimed back the
property
 Voidable: Undue influence, misrepresentation, coercion, fraud, a person can sue
 Rights and remedies differ according to the effect
 Important to ensure that agreements are not unlawful
 Week6: Discharge of Contract & Remedies
Discharge of contract: no more contract
Remedies:
 There is already a contract (written/verbal)
 There is breach of contract (could be major/minor)
 Discharge by breach (has to be major, major breach)
 Since breach of contract, what remedies want
Ways in which contract is discharged
Performance:
 When a party has refused or disabled himself from performing, his promise in its
entirety, the promisee may put an end to the contract, unless he has signified, by
words or conduct, his acquiescence in its continuance S.40
 Need to perform exactly as the terms of contract
 Substantial performance: complete a major part of the contract
 Proper place: duty of the promisor to apply to the promisee to appoint a reasonable place
for the performance of the promise S.50
 Reasonable time
 Time is essential: able to terminate/voidable/sue for damage (must be delivered at
XX date) S.56(1)
 Time is not essential: only can claim damages S.56(2)
 If goods were not delivered on time essential/specify, the promise decided to waive
the right to terminate, any further delay only can sue for damages S.56(3)
Agreement:
 Party agrees to discharge
 Decision of come out to contract (could not be solo)
 Original contract need not be performed if parties rescind/alter/substitute it S.63
 Every promisee may dispense with or remit, wholly or in part, the performance of the
promise made to him, or may extend the time for such performance, or may accept instead
of it any satisfaction which he thinks fit S.64

Impossibility:
 An agreement to do an act impossible in itself is void S.57
 Impossibility of performance at the time contract is made
 Impossibility of performance after contract is made. Doctrine of frustration
Consequences of frustration:
o Comes to an end at that time when something happen (becomes void)
o A decide to sell car to B at 1stApril, delivered at 1stMay, car destroyed by fire at
18April, S.66 applies as contract discovered to be void, car not possible to be
delivered at 1stMay
o Bound to restore the benefit when contract discovered to be void S.66
o Cannot sue as not the fault of seller destroyed the car, void
 o When contract discharged by impossibility, seller need not deliver the car on
1stMay, all sum payable/cease to payable at that time shall be recoverable from him
the money received S.15(1)(2) Civil law 1956
Breach
 When a party has refused or disabled himself from performing, his promise in its
entirety, the promisee may put an end to the contract, unless he has signified, by
words or conduct, his signify his acquiescence to proceed with contract S.40
 Actual breach: the breach actually occurred
 Anticipatory: can foresee the contract mostly cannot perform
 If it is intention that contract should be performed by promisor himself, it must be
performed by him personally S.41
 If promisee accepts performance of promise by third person, he cannot afterwards
enforce it against the promisor. S.42
Remedies to rescind
Right to rescind:
 Terminate the contract only if breach of condition (major term)
 In addition to rescind the contract, can also claim for damages, decided by court S.76

Damages:
 Objective: put the affected party in no loss suffered
 Required compensation for loss suffered
 Not whatever loss suffered can be claimed, only can claim natural loss, getting
another contractor to redo it S.74(1)
 Not only claim for natural loss, given condition that both parties must know it can
happen S.74(1)
 Compensation not be given for indirect losses sustained by reason of breach S.74(2)
 Specified an amount in the contract, sue if contract not be peformed, the figure
specified will be maximum number claimed in spite of loss S.75

Specific performance:

Quantum merit:
Asking for certain amount
Injunction:
Prevent someone from doing something (renovate)