(a) Explain with reference to the Contracts Act 1950, relevant cases and examples, if any:
i) The doctrine of frustration (3 marks)
ii) The requirement of the law that parties to a contract must have the intention to create legal relations. (3 marks)
iii) Meaning and effect of coercion as vitiating element in a contract. (2 marks)
(b) N/A Sale of Goods Act 1957
(c) State briefly the advantages of the doctrine of binding judicial precedent. (3 marks)
Similar question was asked in:
MIA QE 2010/9 Q1 (a)(ii) Mark rented David's hall.
MIA QE 2012/9 Q1 (b)(ii) Explain how a contract may be ‘discharged by frustration’.
MIA QE 2011/3 Q1 (a)(ii) Mark entered into a contract with David Oil Palm Plantation.
MIA QE 2013/9 Q1 (b) Haron and Aziz purchase of timber but destroyed by flood.
2011 D02 Q2 Discharging obligation under contract.
LPPEH 2012 D02 Q1 Doctrine of frustration.
From Contract Act, 1950 S.57 specifies frustration to a contract as below:
S.57 Agreement to do impossible act.
(1) An agreement to do an act impossible in itself is void.
Contract to do act afterwards becoming impossible or unlawful.
(2) A contract to do an act which, after the contract is made, becomes impossible, or by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful.
Compensation for loss though non-performance of act known to be impossible or unlawful.
(3) Where one person has promised to do something which he knew, or, with reasonable diligence, might have known, and which the promisee did not know, to be impossible or unlawful, the promisor must make compensation to the promisee for any loss which the promisee sustains through the non-performance of the promise.
(a) A agrees with B to discover treasure by magic. The agreement is void.
(b) A and B contract to marry each other. Before the time fixed for the marriage, A goes mad. The contract becomes void.
(c) A contracts to marry B, being already married to C, and being forbidden by the law to which he is subject to practise polygamy. A must make compensation to B for the loss caused to her by the non-performance of his promise.
(d) A contracts to take in cargo for B at a foreign port. A’s Government afterwards declares war against the country in which the port is situated. The contract becomes void when war is declared.
(e) A contracts to act at a theatre for six months in consideration of a sum paid in advance by B. On several occasions A is too ill to act. The contract to act on those occasions becomes void.
(ii) Intention to create legal relation, please refer below.
MIA model answer:
Intention to create legal relations imputes the parties intention on their responsibilities and liabilities towards the contract. Common law principles prescribes that in a business agreement, the parties are presumed to have the intention to create legal relations. Whereas in a domestic, family or social agreement the presumption is otherwise. However these presumptions are rebuttable.
Coercion as a vitiating element in a contract, please refer earlier post here.
S.15. “Coercion” is the committing, 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 whatever, with the intention of causing any person to enter into an agreement.
Explanation—It is immaterial whether the Penal Code is or is not in force in the place where the coercion is employed.
A, on board an English ship on the high seas, causes B to enter into an agreement by an act amounting to criminal intimidation under the Penal Code.
A afterwards sues B for breach of contract at Taiping.
A has employed coercion, although his act is not an offence by the law of England, and although section 506 of the Penal Code was not in force at the time when or place where the act was done.
(b) Not included in Syllabus.
Judicial precedent are asked in:
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"?