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(2)

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(3)

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Q3 Dec 2018 Farah

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Ethan, Ingrid & Putra Construction - Don Nazar - Tutorial 1

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QUEST DEC 2018

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2019918091

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Sarah Aqilah Shaharom (2019170815)

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2019510755

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ZARINA ZAINAL ABIDIN (2012434212) DEC 2018 PART A Q3

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DEC 2018 PART A Q3

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2019172017

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2019386615

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CONTRACT2 ASSIGNMENT 1 SITI NOOR ADILA 2019508333

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dzulkarnain bin maarup 2016832448

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DZULKARNAIN BIN MAARUP2016832448 NLWIK2AX 2019

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Muhammad Yassin Farisi bin Rozman 2019782917

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Mohd Hazman Bin Zulkaply
2016272296

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Nor Najiyyah Binti Mohd Aris
2019921873

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Nor Najiyyah Mohd Aris
2019921873

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Muhammad Amirulfitri Bin Mohd Khairi
(2019321957)

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Q3 Dec 2018 (Muhammad Amirulfitri Bin Mohd Khairi - 2019321957)

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BENAZIR BEGUM 2019964339

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EXCLUSION CLAUSE - TEST - DON NAZAR 2018868046

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EXCLUSION CLAUSE - TEST - DON NAZAR 2018868046

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Badrul Hisyam bin Kasmiran 2019768937

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Tutorial LAW486 Badrul Hisyam Bin Kasmiran 2019768937

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AB FITRI AB AZIZ
2019989351

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2019939511
Tutorial 1

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Lilis Suryani Binti Mohamad Sarbian
2019504339

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Muhammad Zhafir Bin Zawawi
2019368755

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Tutorial 1 LAW 486 Muhammad Zhafir Zawawi

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Tutorial 1 Law486 Muhammad Zhuhair bin Zawawi (2019719023)

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Tutorial PAST YEAR, DECEMBER 2018, PART A, QUESTION 3

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Tutorial PAST YEAR, DECEMBER 2018, PART A, QUESTION 3

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NLWIK2AY

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Putra Construction v Ingrid case- by Norabani bt Ab Rashid

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Salam Sir, my test answer attached. Thank you and have a nice day

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LAW 486 EXCLUSION CLAUSE - TEST -YASSIN - Group 2AX

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LAW 486 EXCLUSION CLAUSE - TEST -YASSIN - Group 2AX

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Salam & Good Day Sir. Attached herewith my answer for last 23/11/2019 test. Sorry for the inconvenience caused.

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Mid-Term Exam 23112019 LAW 486 Submission Yassin (LW213)

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Dear Sir,
I enclose the test answer for your further action. Thank you.

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Saiful Azwan Rasidi-ID 2019774863-TEST 1 LAW 486-NLWIK2AX

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Hi Sir, i attached my answer (past year Q) for your review. Thank You

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Contract 2 LAW 486- Parol Evidence & Collateral Contract - farah

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Contract 2 LAW 486- Parol Evidence & Collateral Contract - farah

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Hi Sir.. I attached my answer (past year Q) on Parol Evidence and Collateral Contract. Thank You

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Parol Evidence Rule & Collateral Contract - Farah

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Hi Sir. I attached my answer (past year Q) for your review. Thank You.

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ASSIGNMENT LAW 486

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2018401102

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2018401102

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Muhammad Amirulfitri Bin Mohd Khairi
(2019321957)

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Case Review (Muhammad Amirulfitri Bin Mohd Khairi - 2019321957)

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BENAZIR BEGUM

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Parole Evidence & Collateral Contract - Question 1 - Jan 2018

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Parole Evidence & Collateral Contract - Question 1 - Jan 2018

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Question 1 - Jan 2018 - Parole Evidence & Collateral Contract

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PRIVITY OF CONTRACT PAST YEAR 2018 - Don Nazar

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PRIVITY OF CONTRACT PAST YEAR 2018 - Don Nazar

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Question Part B - Roza - Privity of Contract

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Assalamualaikum sir..

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Salam sir, this is the submission from Student ID: 2019504339

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2018486442

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Salam sir, here is my submission for the case review The Golf Cheque Book

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Salam Sir. Attached is my case review for the case of The Golf Cheque Book.

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CASE REVIEW Badrul Hisyam bin Kasmiran 2019768937

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IMPLIED TERM QS 3 DEC 2018 GROUP OF ADILA TALHAH 2019508333

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IMPLIED TERM QS 3 DEC 2018 GROUP OF ADILA TALHAH 2019508333

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CONTRACT2 GROUP ASSIGNMENT SITI NOOR ADILA 2019508333

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SITI NOOR ADILA TALHAH 2019508333 REPAIR ASSIGNMENT QS3 DEC 2018

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SITI NOOR ADILA TALHAH 2019508333 REPAIR ASSIGNMENT QS3 DEC 2018

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CONTRACT2 REPAIR ASSIGNMENT 1 SITI NOOR ADILA 2019508333

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Case Review: The Golf Cheque Book Sdn Bhd & Anor v Nilai Springs Bhd by Siti Noor Adila Talhah 2019508333

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Case Review: The Golf Cheque Book Sdn Bhd & Anor v Nilai Springs Bhd by Siti Noor Adila Talhah 2019508333

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CONTRACT2 ASSIGNMENT ARTICLE REVIEW SITI NOOR ADILA 2019508333

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Case Review: The Golf Cheque Book Sdn Bhd & Anor v Nilai Springs Bhd by Group of Adila Talhah 2019508333

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Case Review: The Golf Cheque Book Sdn Bhd & Anor v Nilai Springs Bhd by Group of Adila Talhah 2019508333

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CONTRACT2 GROUP ASSIGNMENT ARTICLE REVIEW SITI NOOR ADILA 2019508333

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2019172017

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Contract II - Tutorial Question 1 (Nurul Aida Qistina 2019587795)

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Case Review Muhammad Izani bin Ismail 2019128639

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Case Review Muhammad Izani bin Ismail 2019128639

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LAW486 - CASE REVIEW (Muhammad Izani bin Ismail - 2019128639)

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MUHAMMAD ZHAFIR BIN ZAWAWI / 2019368755

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Case Review - The Golf Cheque Book v Nilai Springs Bhd

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Case Review - The Golf Cheque Book v Nilai Springs Bhd

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Mohd Zubidi Bin Abd Razak (2019103523)

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Case Review - Mohd Zubidi Bin Abd Razak (2019103523)

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Khairul bariyyah
Matriks 2016272658
Group 2ax

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Case Review: The Golf Cheque Book Sdn Bhd & Anor v Nilai Springs Bhd 

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Case Review: The Golf Cheque Book Sdn Bhd & Anor v Nilai Springs Bhd 

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Case Review The Golf Cheque Book Sdn Bhd

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Extra credit exercise
Past year bariyyah
2016272658
Nlwik2ax

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Contracts II

Past Semester Question – July 2017 (Part C)
NIK MOHD ZULHAIRI (NLWIK2AX) 2019323247

Issue:

1) To what extent can West Bank rely on the exclusion clause inserted in the 2016 agreement to escape liabilities that arose as a result of their negligence in providing adequate security?

2) Is there a valid exclusion clause?

3) Can Datin Baili enforce the oral assurance given to her prior to entering the agreement in 2014?

4) Does a collateral contract exist between Datin Baili and West Bank?

Law:

According to White v Blackmore, an exclusion clause is a clause in a contract that aims to exclude/limit the liability of a party. In simple words, it is to allow a party to escape any responsibility that might arise just in case something goes wrong.

There are three ways of how exclusion clauses can be incorporated into a contract. Firstly, incorporation by notice. For this, the notice must be given before or at the time a contract is entered into. Secondly, it may be incorporated by course of dealing. This is when the parties have been in business with each other for a certain long period of time. In simple words, it is when the parties are said to be regulars and a consistent course of dealing exists. Thirdly, it may be incorporated by a signature in a written document. In this case, we will focus more on the signature in written documents.

The general rule for this type of incorporation is laid down in L’Estrange v F Graucob Ltd where the court held that since the plaintiff had signed the document, the fact that she had not read it is irrelevant as it is presumed that once the signature is written down, it is considered the parties have understood and consented to the terms of the contract. This principle is followed by the Malaysian case Subramaniam v Retnam where the court held that as long as there is no fraud or misrepresentation, the parties who have signed the agreement are bounded by it and other factors are irrelevant. However, in Curtis v Chemical Cleaning & Dyeing Co Ltd, the court held that the defendant could not rely on the exclusion clause even though the

plaintiff had signed it because the shop assistant had misrepresented the exact scope of the clause. Meanwhile, in the case of Mendelssohn v Norman Ltd, the court held that in situations where an oral assurance is given contradicting to the exclusion clause, the oral promise shall take precedence over the exclusion clause and the party giving the oral assurance are bounded by his promise.

Application:

In this case, it is important to decide the type of contract entered into by both parties. Since Datin Baili entered into a contract with a bank (West Bank), it is safe to say that a written document exists as a proof as it is highly unlikely that a bank will enter into a commercial contract with a party in such an informal manner such as an oral contract. Thus, making the exclusion clause falls under incorporation by signature in a written document as both parties have put their written signatures in the document. In addition, by following the principles laid down in the cases of L’Estrange, Subramaniam and Curtis, Datin Baili and West Bank are bounded by the terms of the contract as there is no fraud or misrepresentation from the part of West Bank and the fact that Datin Baili did not have knowledge at all regarding the exclusion clause is irrelevant because once she put her signature in the document, it is presumed that she has consented to the presence of the exclusion clause.

However, there is also a need to look at the oral assurance given in 2014 by Puan Hasnah, a senior manager of West Bank to Datin Baili prior to the signing of the agreement which states that West Bank would compensate her should there be any loss or damage to the contents of the box while in possession of West Bank. Hence, by following the legal principles laid down in the case of Mendelssohn v Normand Ltd which established that an oral assurance that promises the defendant to be liable for any loss or damage will triumph the exclusion clause in the written document. Hence, it can be said that even though West Bank had inserted an exclusion clause, they shall be liable for the loss due to the fact that the oral assurance was given by a senior manager of the bank and can be enforced by Datin Baili for the existence of a collateral contract.

Law:

The next legal principles that we need to focus on is the interpretation of exclusion clauses. After it has been incorporated, the clause has to be construed to determine if it covers the even which has occurred. It may be interpreted in 4 ways. Firstly, by using the contra proferentum rule when the words used in the clause are vague. Secondly, by interpreting the clause strictly using the rules of construction. Thirdly, by using the rule of law when there is a fundamental breach. Lastly, by looking at the effect of negligence if it occurs. In this case, we will focus more on the effect of negligence.

The general rule governing exclusion clauses that exempt liability is laid down in the case of Premier Hotel Sdn Bhd v Tang Ling Seng where the court held that in order to exempt the party from any liability that arise as a result of negligence, the words used in the clause must be sufficiently clear, either by referring to negligence or by using some other expression such as “however caused”. However, in the case of Chin Hooi Naan v Comprehensive Auto Restoration Service Sdn Bhd, the court has ruled that even if the words used in the exclusion clause are sufficiently clear, the defendant must prove that he has taken all reasonable care to avoid the negligence or in its simple words, they must prove that they have exercised due diligence in performing their contract.

For the position regarding this issue in recent times, there are two cases that highlight two different judgements by the Court of Appeal. The first case is United Overseas Bank Malaysia Berhad v Lee Yaw Lin where the court held that an exclusion clause shall exclude all liability that arise as a result of negligence even though there was no due diligence conducted in the performance of the contract. However, the second case which is CIMB Bank Berhad v Anthony Lawrence Burke, the court held that banks should be liable for any negligence that occurs as a result of failure to conduct due diligence even though a specific exclusion clause was inserted into the contract.

Application:

In this case, when the investigation reveals that the break-in of the bank was caused by the bank’s failure in providing adequate security to the vault, it is considered that they have failed to perform due diligence (providing a strong security system) in protecting the safety deposit boxes. Hence, negligence has occurred as a result of their failure to provide security. Thus, by following the principles laid down in the case of Chin Hooi Naan, the clear and specific words of clause 13 of the 2016 agreement is defeated by the bank’s failure to provide sufficient protection the vault, making West Bank liable for their negligence. However, the decision of the judges in the cases of United Overseas Bank Berhad and CIMB Bank Berhad must also be considered as they are decided by the same court which is the Court of Appeal. It will all depend on which precedent will be relied upon whether the former or the latter. If the court decides to follow the principles laid down in United Overseas Bank Berhad, West Bank will not be liable for their negligence in providing adequate security to the vault as their exclusion clause had managed to exclude all liabilities that might arise. On the other hand, should the court decides to follow the judgement laid down in CIMB Bank Berhad, West Bank will be liable as they had failed to conduct their due diligence in protecting the vault, making their exclusion clause becomes invalid.

Conclusion:

As a conclusion, Datin Baili may enforce the oral assurance given to her in 2014 by Puan Hasnah as laid down in the case of Mendelssohn which constitutes an enforceable collateral contract. However, the issue of whether the exclusion clause inserted in the 2016 agreement is valid or vice versa depends on which judgement the court will use to decide the case, either the precedent in in United Overseas Bank Berhad (a valid exclusion clause) or the case of CIMB Bank Berhad (invalid exclusion clause

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NIK MOHD ZULHAIRI 2019323247
LAW 486 – LAW OF CONTRACT II

Question Part B -

Rose owns a bridal shower in Shah Alam. Richard runs a gym next to Rose. Their business flourished and became good friends. Last week, Richard informed Rose that he has applied for an RM500,000 loan for business from Bank SIME. Richard asked if Rose could be his guarantor. Roza agreed and executed some documentswith Bank SIME. A year later, Richard had some financial difficulties and couldn’trepay the loan.

With reference to the above, advise if Rose is liable for the loan repayment ofRichard’s loan agreement.

The issue is whether Rose is liable for the loan repayment of Richard’s loan agreement.

The doctrine of privity states that only persons who are parties to a contract have enforceable rights and obligations to sue or be sued on the contract. A contract cannot be enforced by or against third parties. The general rule is “No stranger to the consideration can take advantage of a contract, even if it is made for his benefit.

Before we discuss more about Rose’s issue, we will explore on the case ofTweddle v Atkinson. In this case, the plaintiff, who was the son of John Tweddle, married the daughter of William Guy. After the marriage, William Guy and John Tweddle entered into an agreement promising to pay $200 and $100 to the plaintiff. The sum promised by William Guy remained unpaid and the plaintiff was sued. It was held that he was not entitled to the sum because he was not a party to the contract and only his father was.

In another case of Dunlop Pneumatic Tyre Company v Selfridge and Company Limited, the appellant sold Dunlop tyres to Dew & Co on the condition that they were not allowed to resell the tyres lesser than the original price that was sold. Dew & Co agreed on this. However, the respondents who were the trade customers of Dew & Co sold two tyres lower than the stipulated price. The appellants sued the respondents but it was held that they were unable to do so because they are not a party to the contract.

The Malaysian position in this doctrine is the same as the common law. In Section 2 (d) of the Contracts Act; Consideration may move from the promise or any other person. In Malaysia, third parties can provide consideration. However, the rule that consideration can move from persons other than the promise is different from the doctrine of privity of contract. A person cannot sue on a contract if he is not a party to it, not if consideration has been provided by another person.

In Kepong Prospecting Ltd v Schmidt, the respondent assisted Mr. Tan to obtain a prospecting permit. Mr. Tan promises the respondent a tribute of 1% of the selling price of all iron produced and sold. The appellant company was then incorporated to exploit mining rights. In 1954, the appellant made an agreement with Mr. Tan whereby the company took over Mr Tan’s obligation to pay the respondent the tribute of 1%. The respondent was NOT a party to this agreement. In 1955, the appellant company made an agreement with the respondent agreeing to pay the 1% tribute. The appellant claimed against the respondent company payment of the 1% tribute due to him under the 1954 and 1955 agreement. It was held that as the respondent was not a party to the 1954 agreement, he cannot enforce it. Although the third party can provide consideration, only parties to the contract can sue. Schmidt only receive the payment sum from the 1955 agreement and not the 1954 because it was between Kepong Prospecting and Mr. Tan.

Now we will discuss about exceptions. This is when the third party is the is an executor, an administrator of the deceased’s trustee in bankruptcy or estate. InBeswick v Beswick, a coal merchant transferred his business to his nephew whomade various promises in return. One of them was that he would, after his uncle’s death, pay 5 pound per week to the uncle’s widow. The uncle died and the widowbecame his administratrix. The widow brought an action to enforce the nephew’spromise, suing both in her own right and as administratrix. The House of Lords held that the widow could only enforce the nephew’s promise in her capacity as anadministratrix and that she was entitled to an order of specific performance against the nephew.

Now, we shall discuss on the issue of Rosa as the guarantor. Under section 79 of the Contracts Act; A “contract of guarantee” is a contract to perform thepromise, or discharge the liability, of a third person in case of his default. The person

who gives the guarantee is called the “surety”; the person in respect of whichdefault the guarantee is given is called the “principal debtor”, and the person towhom the guarantee is given is called the “creditor”. A guarantee may be eitheroral or written.

The contract of guarantee states that a binding promise of a person to be answerable for the present or future debt or obligation of another person when that other person defaults. A contract to perform the promise, or discharge the liability, of a third person in case of his default. The person who gives the guarantee is calledthe “surety”; the person in respect of which default the guarantee is given is called the “principal debtor”, and the person to whom the guarantee is given is called the “creditor”. The surety becomes liable when the principle debtor commits default in meeting the liability. So in this Rose’s case, she is the surety whilst Richard is the principal debtor and Bank Sime is the creditor.

To demonstrate this case further, we shall look at Razshah Enterprise Sdn Bhd V Arab Malaysian Finance Berhad. The plaintiff claimed that the loan agreement was between the defendant and Wan Endut on the purchase of a couple of lands all in the Mukim of Hulu Kinta. However, the plaintiff executed first legal charge to secure repayment of the loan and interest thereon together with all other sums and moneys that may become payable by the borrower under the said charge. Even if the loan agreement was between two other parties but the judge believe that they went into a tripartite agreement. Now for Surety’s Liabilities, under Sec 81 of the contract’s act: (a person who gives a guarantee). The liability of the surety is co- extensive with that of the principal debtor, unless it is otherwise provided by the contract. As stated in illustration, A guarantees to B the payment of a bill of exchange by C, the acceptor. The bill is dishonoured by C. A is liable, not only for the amount of the bill, but also for any interest and charges which may have become due on it.

In conclusion, Rose is liable for the loan repayment and she can be sued by Bank Sime.

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NIK MOHD ZULHAIRI (2019323247)

NLWIK2AX

TUTORIAL 1: COLLATERAL CONTRACT

Collateral contract is a device which has been used to overcome the parol evidence rule to admit pre-contractual statements which had been incorporated into the written agreement. This device is particularly relevant where an oral statement is made which induces the party to enter into a contract. The oral promise is a separate contract but is collateral to the main transaction. As it exists side by side with the main contract, it thus does not offend the Parol Evidence Rule.

In the case of Keng Huat Film Co SDN BHD v Makanlal where in this case the respondent company and its predecessor company owned a cinema in Ipoh and had entered into an agreement with Ong Keng Huat and his partners to lease to land for a period of 5 years. Under Clause 4(e) of the agreement the lessees had a right to renew the lease for a further period of 5 years from the expiration of the period. However, the option to renew was not exercised but the respondent company subsequently on February 14, 1968 gave a lease for 5 years of the land to the appellant company retrospectively on from September 1, 1966. Under Clause 4(e) of this lease the appellant was given an option to renew the lease for a further 10 year period upon giving the respondent a written 6 months’ notice of the intention to renew. Under the said clause it was also provided that the lessor would grant to the lessee at the expiration of the lease a further term of 10 years at the same rent and containing the like covenants and provisos as were therein contained. In 1971, the appellant gave the necessary notice to ask for the renewal of the lease and sent a draft of the second lease to the respondent. The respondent returned the draft lease but with clause 4(e) containing the covenant for renewal deleted. Although the second lease was not executed the appellant continued to remain in possession of the premises. The respondents wrote to the appellant on January 18, 1981 asking for vacant possession of the premises by August 31, 1981. The appellant refused to vacate contending that it had the right to perpetual renewal under the first lease if the option to renew was exercised on each occasion, and such perpetual lease would be valid for 99 years under Section 221(3)(a) of the National Land Code. The appellant applied for specific performance of the renewed lease with the covenant for perpetual renewal inserted as a term of the agreement. The learned trial judge dismissed the claim and the appellants appealed. This case introduced the Parol Evidence Rule.

The Parol Evidence Rule prohibits a person from adducing oral evidence where the terms of the contract have been put into the writing. This is explained in Section 91 of the Evidence Act 1950 which stated that when the terms of the contract have been reduced by or by consent of the parties to the form of a document, no evidence shall be given in proof of the terms of the contract except the document itself. This means that evidence cannot be admitted to add to, vary or contradict a written instrument. However, extrinsic evidence may be admitted to prove that the written agreement did not represent the whole bargain between the parties. These exceptions can be seen in Section 92 of the Evidence Act 1950. In Section 92(b) of EA 1950, it was stated that the existence of any separate oral

agreement, as to any matter on which a document is silent and which is not inconsistent with its terms, may be proved, and is considering whether or not this proviso applies, the court shall have regard to the degree of formality of the document. In addition, Section 92(c) of EA 1950 stated that the existence of any separate oral agreement constituting a condition precedent to the attaching of any obligation under any such contract, grant or disposition of property, may be proved.

The principles of a collateral contract are stated in the case of Kluang Wood Products SDN BHD & Anor v Hong Leong Finance Berhad and Anor. Firstly, to establish the presence of a collateral contract, the party must show that the representation was relied by the defendants. Secondly, the representation induced the parties to enter into the contract and lastly, the representation itself must amount to a warranty, collateral to the main contract and exist side by side.

A separate oral agreement is collateral to the main transaction as it exists side by side with the main contract. This can be seen in the case of Tan Swee Hoe Co Ltd v Ali Hussain Brothers. In this case, the appellants orally agreed to allow the respondents to occupy their premises for as long as they wished with the payment of $14,000. Written tenancy agreements were signed but these did not refer to the oral agreement. A dispute later arose between the parties and the appellants issued the respondent with a notice to quit the premises. The respondents argued that they were allowed to stay in the premises as long as they wished so long as they paid the rent which is based on the oral agreement. The Federal Court held that a collateral contract exists as the representation induced the parties to enter into the contracts.

However, it is further discussed in Tindok Besar Estate Sdn Bhd v Tinjar Co [1979]. The appellant was a contractor for the extraction of timber for a company, who later decided not to carry on with the work. An agreement was made between the appellant and the respondent where the respondent undertook the work of extracting timber. There was a dispute as to this agreement. The trial judge admitted parol evidence to prove several implied undertakings on the ground that not all the terms had been incorporated into the agreement. It was held that the evidence sought to be adduced did not come within proviso (a) or (b) of Section 92, but was evidence adding new term to the agreement. Unless the additional evidence sought to be adduced fell within any of the exceptions in Section 92 of Evidence Act, it should not be introduced as it would be to contradict, vary add or subtract to the terms of the agreement. The learned judge mentioned that the contract could only be proved by the document itself, and it is not open to the respondent to seek and introduce and the judge to admit evidence that would add new terms.

The above case can be contrasted with the decision in Tan Chong & Sons Motor Co SDN BHD & Alan McKnight. In this case, the respondent was a member of the Royal Australian Air Force. He wanted to buy a car and get the benefit of exemption from duty in Malaysia and Australia. He would have obtained the exemption if the motor car was taken out of Malaysia and if it compiled with the Australian Design Regulations. He agreed to buy a car from the appellants and signed a Buyer’s Order which contained a condition that no guarantee or warranty of any kind whatsoever was given by the company. However, the respondent only bought the car on the representations of the appellant’s salesman that the car conformed to the Australian Design Regulations. The car supplied did not comply with the

Regulations and the respondent had to sell the car. The respondent also lost the fiscal advantage of importing the car to Australia duty free. The respondent claimed damages for breach of warranty. The issue was whether the representations made by the salesman were admissible. The Federal Court held that the prohibition against admissibility of evidence under Section 92 of EA 1950 only applies where all of the terms of the contract are written into the agreement. Thus where some terms are given orally and some in writing, oral evidence can be given to prove the terms agreed to orally. Where the oral representations as in this case are in conflict with the printed condition in the written contract, the representations must be given to prove the terms agreed to orally.

In conclusion, Parol Evidence Rule existed in Malaysia. The general rule is that a person is prohibited from admitting extrinsic evidence where the terms of the contract have been put in writing as stated in Section 91 of EA 1950. However, due to exceptions provided in Section 9

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NIK MOHD ZULHAIRI

2019323247

TUTORIAL 1-LAW 486-DEC 2018-QUESTION 3

Issue

The issue is whether there is implied term for Ingrid to perform in order to fulfill the contract.

Law

Implied terms is a terms that is read into the contract by the Court or by the Legislators. It is an integral part of the contract despite the parties not having expressly provided it. An implied term must not be inconsistent with the express term. Generally these terms can be implied into a contract by three (3) ways which are custom and usage pertaining a particular type of transaction or business efficacy, courts (based on intention of the parties) and law (certain provisions contained in statutes.

In custom or trade usage, implied term can be incorporated into a contract when it establish certain (the practice is clearly established), notorious (it is so well known in the market in which is alleged to exist that those in the same business/market, contract with the said practice/usage as an implied term and reasonable (not as to contradict the tenor of the contract as a whole). Besides, the terms may also be implied by law through common law and statutes. As for example employment contract, landlord and tenants, Sale of Goods Act 1957 (SOGA 1957) and so on. Terms also can be implied by courts whereby it is judicially implied to allow for unexpressed intentions of the parties to take effect. There are three tests for implying terms which must be fulfilled which are (1) the business efficacy test, (2) the officious bystander test and (3) a combined test. Particularly, in Malaysia, there is only one test which is the combined test, combination of both business efficacy test and officious bystander test to be applied by the courts.

Business efficacy test means the desired result of the business in question. The test will be satisfied if it shows that the implied term will give business efficacy to the transaction of the contract of both parties, to enable transaction to be efficient or produce the intended effect. This can be referred to the case of The Moorcock, where Court of Appeal held that the defendant responsible for reasonable care to ascertain the safety of the vessel regarding the plaintiff vessel discharged to dock. The Moorcock, the defendant agreed to allow the plaintiff ship owner to discharge his vessel at the defendant’s jetty. While the vessel was moored, the tie ebbed and the vessel sustained damage due to settling on a ridge of hard ground below the mud. The Court of Appeal implied into the contract a term that the defendant should take reasonable care to ascertain the safety of the vessel’s berth.

Officious bystander test (“oh, of course”). In the case of Shirlaw v Southern Foundaries, if while the parties are negotiating and an officious bystander were to suggest an express provision for their agreement, they would both reply, “Oh, of course”. Shirlaw was appointed as managing director by defendant for 10 years. It was held that there was an implied term that defendant would not alter its articles of association to create a right for itself to remove the plaintiff before the 10 year time expired. In the case of Yong Ung Kai v Enting. The defendant entered into a written agreement with plaintiff for the sale of timber on a piece of land. In order to cut down timber, a license was required from the Forest Department. Even though in the written document did not refer of the necessity of obtaining a license, defendant tried to obtain a license but his application was rejected. The court held that there was an implied terms that the sale of the timber was to be subject to the necessary license. Otherwise, the contract is impossible to be performed.

A combined test, where the courts combined and using both tests. In the case of Sababumi Sdn Bhd v Datuk Yap Pak Leong, where Sandakan Turf Club was granted a license to operate lotteries in 1987. A new license was issued on 1995 to the appellant due to the repealed law. However, the appellant activities were stopped by the police. The appellant filed summon to seek declaration that the 1995 license was within the scope of the agreement by the way of implied term. The Federal Court held that both tests must be satisfied before a term can be implied and the 1995 license could in fact be implied by referring to the business efficacy test and the officious bystander test. Meanwhile in the case of Chong Siew Fai J, in Yap Nyo Nyok v Bath Pharmacy Sdn Bhd, court held that both tests must be satisfied. If the implied term was not necessary to give business efficacy, the answer to the officious bystander would have been a testy answer of “Oh don’t talk rubbish”.

In applying to the case of Ingrid claimed that Putra Construction has breached the JVA for having failed to complete the construction and development of the houses as stated in the clause 7 and Putra Construction argued that they were prevented from commencing construction of the said project because Ingrid had failed to evict the squatters and demolish their family business buildings and workshops on the said land. By applying the case of Moorcock, the business efficacy test is satisfied in this case, the implied term which obliged Ingrid to makesure the said land to be hand over to Putra Contruction without any encumbrances/obstacles which means that Ingrid need to make sure the land is free from any issue (squatters,buildings) that might affect the business efficacy of Putra Construction to construct or develop of the said land. It is the duty of Ingrid as the land owner to clear the land by evicting the squatters and demolishing their family business factory buildings and workshop on the said land in order for Putra Construction to complete the construction and development even though it was not mentioned in the agreement as she is bounded by the terms of the JVA.

Meanwhile, the officious bystander test is also been fulfilled by applying the case of Shirlaw and Yong Ung Kai v Enting. Putra Construction “of course” failed to complete the construction and development of the houses on the land within stipulated time frame as stated in Clause 7 if Ingrid did not take action to demolish and evict the family business on the said land . The contract is definitely impossible to be performed. Therefore, it is clearly show that the officious bystander test is satisfied in this case as both business efficacy test and the officious bystander test have been fulfilled, indirectly the combined test that had been used in the case of Sababumi Sdn Bhd v Datuk Yap Pak Leong also has been satisfied.

Conclusion

In conclusion, it is proven that there is an implied term in the JVA between Ingrid and Putra Construction. The combined test for the contract is under the terms implied by court had been satisfied. Therefore, Ingrid is liable for breach of the contract which referring to the JVA that has been agreed by both of them.

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STUDENT NAME: NIK MOHD ZULHAIRI  STUDENT ID: 2019323247

Case Review: The Golf Cheque Book Sdn Bhd & Anor v Nilai Springs Bhd

Court of Appeal (Putrajaya) – Civil Appeal No N-02-4 of 2002 Gopal Sri Ram, Azmel and Zaleha Zahari JJCA
26 November 2005

Civil Procedure – Striking out – Action – Whether action against defendant should be struck out – Plaintiff’s claim for breach of contract appeared quite strong – Issue of unilateral mistake – Whether pleadings disclosed facts which merit a trial of the action – Rules of the High Court 1980 O 18 r 19

Issue:

The effect in law where a contract was made on behalf of a company that was non-existent when the contract was made.

Whether there was a valid, binding and enforceable contract between the plaintiff and defendant turns upon the interpretation the facts surrounding of the making of the contract and the application of section 35(1) of the Companies Act 1965.

Facts:

The defendant is the company that owned a golf course. It had contracted with the first plaintiff by letter on 30 October 1999. It is written on the letterhead of ‘The Golf Cheque Book’ (first plaintiff). However, the entity ‘The Golf Cheque Book’ does not exist on the date of contract. There were evidences that the first plaintiff made payments to defendant from time to time.

The defendant claimed he does not aware that the first plaintiff was not exist during the contract made. After he discovered this fact, he returned the payment to plaintiff.

A resolution of the first plaintiff’s board of directors was passed on 3 March 2000 whereby it was resolved that the plaintiff takes over the product known as ‘The Golf Cheque Book’business.

The plaintiffs brought an action against the defendant for breach of contract.

1

Decision:

The High Court struck out the plaintiff’s statement of claim on the ground that the first plaintiff was not privy to the contract as asserted by the plaintiffs. It also delivered a defence and counterclaim. Dissatisfied, the plaintiffs appealed to this Court of Appeal.

Gopal Sri Ram JCA mentioned:

‘Ordinarily a case such this would not warrant a judgment because the principles governing applications to strike out a pleading are trite and each case really turns on its own peculiar facts. But this case has a company law dimension to it which is of interest to the legal profession. So, a judgement is called for. The facts are fairly straight forward.’

For the reason stated in the principles, the appeal was allowed. The orders of the High Court were set aside and the writ was ordered to be returned to file. The defendant was ordered to pay the cost of the appeal and those incurred in the court below. The Court of Appeal remitted the case to High Court and directed that the plaintiff’s action be tried with the counterclaim on 11 January 2006.

Principles:

Held allowing the appeal:

1. a)  An application to strike out an action under O 18 r 19 should not descend into a trial on affidavits. What the court concerned is to determine whether the pleading disclosed facts which merit a trial of the action.

2. b)  Learned counsel for the plaintiffs argued the payments made by the first plaintiff after its incorporation to the defendant was evidence of conduct amounting to ratification. This matter must be looked into detail by the High Court during trial. So, even the defendant’s own case the requirement of the s 35 (1) of the Companies Act 1965 appeared prima facie to be satisfied. Hence, both the facts and laws, the first plaintiff’s claim for breach of contract appeared to be far from frivolous or vexatious. In fact, it appeared quite strong.

3. c)  This issue of unilateral mistake was a very serious point in this case and one that must be thoroughly investigated at the trial. If the trial judge finds that the identity of the person with whom the defendant was seeking to contract with was, objectively speaking, of importance to the defendant, then the contract would, as a matter of law be void for unilateral mistake. But, if there was no mistake from an objevtive standpoint then the returning of the monies by the defendant, as pointed out to counsel in the course of argument, was a clear breach of contract. These were other reasons why the plaintiffs claim could not be struck out and why there must be a trial of the action.

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2019129857

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hi sir, i attached my updated case review. thanks.good nite

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Assalamualaikum sir...

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Contract II Assignment (Past Year Question 2018 - Question 3) Fatin Shazreen Mat Kasa 2019179181

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UMAR KHALID MUSA 2019109117

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UMAR KHALID BIN MUSA                  2019109117            NLWIK2AX
MUHAMMAD AZLAN B AZIZUDDIN    2018401102
NURHAYATIQAH BT HASSAN OTHMAN
2019389207

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Muhammad Azlan bin Azizuddin 2018401102

Umar khalid musa 2019109117

Nur Hayatikah binti Hassan Othman 2019389207