Q.
(a) There are certain advantages and disadvantages in applying the system of binding judicial precedents. State three advantages of applying this system. (3 marks)
(b) In relation to the law of contract, write short notes on any two (2) of the following:
(i) Coercion
(ii) Undue influence;
(iii) Fraud;
(iv) Misrepresentation;
(v) Mistake. (5 marks)
(c) John entered City Grocer’s Supermarket and selected some groceries, canned food, detergent, eggs and milk. He puts these items into his shopping trolley. Has a contract been concluded at this stage? Explain your answer. (6 marks)
(d) N/A sale of goods. (6 marks)
A.
(a) Advantages of doctrine of binding judicial precedent, please refer earlier post
MIA QE 2008/3 Q1 (c) State briefly the advantages of the doctrine of binding judicial precedent.
MIA QE 2009/3 Q1 (c) Explain how judicial decisions form part of the law of Malaysia.
MIA QE 2014/3 Q1 (a) Explain the meaning of “binding judicial precedent” in the context of unwritten law in Malaysia.
MIA QE 2012/9 Q1 (a) ‘Judicial Precedent’ is one of the sources of “unwritten laws” in Malaysia.
MIA QE 2014/9 Q1 (a) What is meant by ‘judicial precedent’?
Precedence - is it always followed? Advantages and Disadvantages
2012 D02 Q2 briefly explain Judicial precedent
Briefly explain the challenges of Stare Decisis in Malaysian Courts
What is meant by "Stare Decisis"?
(b) A voidable agreement occurs when the agreement was entered into without free consent:
What is "Free Consent", refer to Consent and Free Consent here.
- Coercion
- Undue influence
- Fraud
- Misrepresentation
- Mistake
(i) Coercion.
Similar question was asked in:
MIA QE 2012/3 Q1 (b)(i) Coercion
MIA QE 2014/3 Q1 (c)(i) Coercion
MIA QE 2014/3 Q1 (c)(i) which render a contract voidable
What constitute a voidable contract?
Briefly explain 'coercion'
LPPEH 2012 D02 Q2
See earlier post on 'coercion' here. Definition of Coercion can be found in S.15 of the CA 50 as follows:
"Coercion is the commiting, or threatening to commit any act forbidden by the Penal Code or the unlawful detaining or threatening to detain any property, to the prejudice of any person, with the intention of causing any person to enter into an agreement."
(ii) Undue Influence.
Similar question was asked in:
MIA QE 2014/3 Q1 (c)(ii) undue influence
MIA QE 2012/3 Q1 (b)(ii) Undue influence
What constitute a voidable contract?
Explain "Undue Influence" as per Contract Act, 1950
Bad Contracts
2013 D02 Q3 inducement and undue influence
(2) In particular and without prejudice to the generality of the foregoing principle, a person is deemed to be in a position to dominate the will of another—
(a) where he holds a real or apparent authority over the other, or where he stands in a fiduciary relation to the other; or
(b) where he makes a contract with a person whose mental capacity is temporarily or permanently affected by reason of age, illness, or mental or bodily distress.
(3) (a) Where a person who is in a position to dominate the will of another, enters into a contract with him, and the transaction appears, on the face of it or on the evidence adduced, to be unconscionable, the burden of proving that the contract was not induced by undue influence shall lie upon the person in a position to dominate the will of the other.
2) the burden of proof lies on "position to dominate the will of another".
(iii) Fraud
S.17 of the CA 50, fraud includes certain acts which are committed with the intention to induce another party to enter into a contract. There are 5 different acts:
- The suggestion, as to a fact, that which is not true by one who does not believe it to be true;
- The active concealment of fact by one having knowledge of belief of the fact;
- A promise made without any intention of performing it;
- Any other act fitted to deceive; and
- Any such act or omission as the law specifically declares to be fraudulent.
- The general rule is that whenever a person causes another to act on a false representation which the maker himself does not believe to be true, he is said to have committed a fraud.
S.18 of CA 50, misrepresentation is confined to innocent misrepresentation, which is an untrue statement that the speaker believes is accurate.
[Although the information is unintentionally false, the contract is voidable. Of course, the parties to the contract can rescind the contract and ratify it under mutual agreement.]
As in case of fraud, silence in certain situations where there is duty imposed to disclose, may amount to a misrepresentation under Section 18 (b) of the CA 50.
The basic difference between fraud and misrepresentation is that in fraud, the maker does not believe in the truth of the statement made, whereas in misrepresentation, the maker believes that the statement is true.
2013 D02 Q8,
MIA QE 2012/3 Q1 (b) (iv),
Common and Mutual Mistake.
Agreement void where both parties are under mistake as to matter of fact
21. Where both the parties to an agreement are under a mistake as to a matter of fact essential to the agreement, the agreement is void.
Explanation—An erroneous opinion as to the value of the thing which forms the subject-matter of the agreement is not to be deemed a mistake as to a matter of fact.
ILLUSTRATIONS
(a) A agrees to sell B a specific cargo of goods supposed to be on its way from England to Kelang. It turns out that, before the day of the bargain, the ship conveying the cargo had been cast away and the goods lost. Neither party was aware of the facts. The agreement is void.
(b) A agrees to buy from B a certain horse. It turns out that the horse was dead at the time of the bargain, though neither party was aware of the fact. The agreement is void.
(c) A, being entitled to an estate for the life of B, agrees to sell it to C. B was dead at the time of the agreement, but both parties were ignorant of the fact. The agreement is void.
Effect of mistake as to law
22. A contract is not voidable because it was caused by a mistake as to any law in force in Malaysia; but a mistake as to a law not in force in Malaysia has the same effect as a mistake of fact.
ILLUSTRATION
A and B make a contract grounded on the erroneous belief that a particular debt is barred by limitation: the contract is not voidable.
Contract caused by mistake of one party as to matter of fact
23. A contract is not voidable merely because it was caused by one of the parties to it being under a mistake as to a matter of fact.
(c) 'He puts these items into his shopping trolley' is not yet a contract based on various case laws:
Invitation to treat
Fisher v Bell [1961]
Carlill v Carbolic Smoke Ball Co. Ltd (1893)
Partridge v Crittenden (1968)
Harris v Nickerson (1873)
Pharmaceutical Society of Great Britain v Boots Cash Chemist Ltd (1953)
The landmark case on this is Pharmaceutical Society of Great Britain v Boots Cash Chemist Ltd (1953) is descriptive of this case, it was held that taking medicine displayed on the shelves of the Chemist Shop is not considered Offer, it is just 'Invitation to Treat'.
MIA model answer:
The display of goods in City Grocer Supermarket is only an invitation to treat. When John selects the items or articles he is merely making an offer to buy those items. A contract has not yet been made between City Grocer Supermarket and John.
The contract is only made at the cashier’s desk when the customer pays for the items.
Case: Pharmaceutical Society of Great Britain v Boots Cash Chemist Ltd.
(d) Not included in Syllabus.
Ref:
S.15-23, Contracts Act, 1950.
Earlier posts.