INTRO TO THE LAW OF CONTRACT
INTRODUCTION
The
principal statute dealing with contracts is the Contracts Act 1950 (Revised
1974) – a re-enactment of the Contracts (Malay States) Ordinance 1950
previously applicable to the nine Malay States. The revised Act is now applicable
throughout Malaysia. Prior to its enactment, the four former colonies of
Penang, Malacca, Sabah and Sarawak were governed by English contract law so far
as it was suited to local conditions.
Although
principles of contract law originated from England, Malaysian Contract Act is,
in fact , closer to the Indian Contract Law simply because the original
Ordinance 0f 1950 was a reproduction of Indian Contract Act of 1872 which was
itself modeled on English law but varied in
several aspects. The Indian Act also borrowed several provisions from
the Draft Code for the State of New York (field Code).
English Law may be used to fill in gaps in the Act
subject to the restrictions imposed by section 3 and 5 of Civil Law Act. In the
interpretation of provisions of contract act, English cases may also be relied
upon where the law is similar or the Act embodies common law principles without
defining them.
DEFINITION
Contract
- refers to an agreement between two or more parties that is legally binding
between them. S. 2(h) : ‘an agreement enforceable by law’. The nucleus of the
contract is an agreement. All contracts must be built upon an agreement but not
all agreements are automatically contract.
Essential
elements of contracts:
- Proposal
and acceptance
- Consideration
- Intention
to create legal relations
- Certainty
- Legal
capacity
- Free
consent
- Legality
of the objects
- Required
formalities
FUNCTION
- To secure the expectation created by a promise of future performance or expectation will be paid
for its breach.
- To facilitate forward planning of the transaction in terms of cost and value, responsibilities of parties and preparation for contingencies.
INTRO TO THE LAW OF CONTRACT
Reviewed by Kamaruddin Mahmood
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