(a)

Consideration is a crucial component in contracts law. It is a type of substantial perk

that are traded between various parties. Consideration is an essential factor that a party
involved in an agreement. S2(d) Contract Act 1950 define that “when, at the desire of the
promisor, the promise or any other person has done or abstained from doing, or abstains from
doing, or promises to do or to abstain from doing something, such act or abstinence or
promise is called a consideration for a promise.” Consideration could be stratify as
“executory consideration, executed consideration and past consideration.”
Executory consideration is a commitment made to achieve something in an upcoming
time frame. It is evaluated as a verb which is like an action carried out against a particular
promise. Whereas past consideration completed in advance to an agreement made. Past
consideration is revoked in English Law but based on S2(d) Contract Act 1950, S2(d)
Contract 1950 and Illustration (c) of Section 26, past consideration is legitimate in
Malaysia Law. Based on S2(d) Contract Act 1950, the phase “has done or abstained from
doing” stated that even if the act was done before an agreement, such an act would constitute
consideration. S26(d) Contract Act 1950 provides that “an agreement made without
consideration is void unless it is a promise to compensate a person who has already
voluntarily done something for the promisor.” The Illustration(c) of Section 26 provide
additional prove to the perspective that past consideration in the cases given established a
valid consideration. In the event that “A find B’s purse and gives it to him. B promises to
give A $50. This is a contract.” In the formation of a agreement, past consideration may
create a valid contract.
Consideration need not move from the promisee. Under the Contract Act 1950, a
party to a contract can impose the promise despite having no consideration if somebody has
done so. S2(d) Contract Act 1950 stated that “ when the promisee or any other person has
done something, such act is called a consideration for the promise.” This concept applied in
Venkata Chinnaya v Verikatara Ma’ya (1881), “a sister agreed to pay a sum of Rs653
every year to her brothers who provided no consideration for the promise. But on the same
day their mother had given the sister some land, stipulating that she must pay the annuity to
her brother. The sister subsequently failed to pay the annuity and was sued by her brother.
The court held she was liable to pay the annuity. There was good consideration for the
promise even through it did not move from her brothers.” For an example show that
consideration need not move from the promise, Ali sold car to Ahmad and told him that the
payment for the car should be made to Sam but not Ali. If Ahmad does not pay to Sam, then
Sam can sue Ahmad for payment under S2(d) Contract Act 1950. Even though the contract
is between two parties, the contract can be performed by a third party. For another example,
Ali sold car to Ahmad and Ahmad’s father helps Ahmad paid to Ali. In the formation of a
contract, consideration need not move from the promisee.
(b)
The issue of this case is about one party (Sam) repent to a condition agree in an
agreement made between two parties, which cause the second party (Ali) to then turn down
the proposal.
Before an agreement was made, each party involved are required to fulfil the element
of contracts which is plan, affirmation, deliberation, objective to form legitimate relations and
regulation. If one of these component is absent, the contract is consider as revoked.
According S30 Contract Act 1950, agreement void for uncertainly. “Agreement, the
meaning of which is not certain, or capable of being made certain, are not valid.” An
agreement between both groups is originate by presenting offer and condition that have the
acceptances of both parties. At common law, there are two types certainty of terms that are
language used is vague or certain terms are vague. Ali made an agreement to rent his house
in Bangsar, “for as long as Sam wish”. In this situation, the certain terms are vague. The
phase “for as long as Sam wishes” is uncertainly because the duration of rent need to be
stated specifically but Ali did not mention the duration certainly. The duration of rent is one
of the most important term of the lease, Ali must sate how long the duration of the lease.
Although Sam has accepted the proposal, but the agreement is not valid because the proposal
is uncertain. Illustration(f) of Section 30 provides further support to the perspective that the
agreement is invalid because of the unspecific proposal. It provides that “A agrees to sell to
B “my white house for ringgit five hundred or ringgit one thousand”. There is nothing to
show which of the two prices was to be given. The agreement is invalid.” This point can be
also shown in a case of Karuppan Chetty v Suah Thian(1916) 1 F.M.S.L.R.300 . The
parties agreed to rent the properties for RM35 per month for “ as long as he likes”. The court
held that the essential of certainly had not been stated as the duration of the lease is unknown.
Thus, the contract is invalid.
Ali made an offer to trade his antique table fan For RM5,000.00. S2(a) Contract Act
1950 define offer as “ when one person signifies to another his willingness to do or to 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”. At the start, Sam offered to pay RM3,000.00 for the fan but
the original terms made by Ali is RM5,000.00. It is mentioned that “In order to convert a
proposal into a promise the acceptance must be absolute and unqualified acceptance of the
terms of the offer as stated” in S7(a) Contract Act 1950. If the condition of the offer is
altered, the agreement made is invalid. In this case, it is considered as a counter-offer. Based
on S6(c) Contract Act 1950, “a proposal is revoked when the offeree makes a counter-
offer.” Once the counter-offer was made, the initial offer was cease. Ali refused the counter-
offer made by Sam causing the original offer to be terminated. In addition, agreement that’s
been aborted due to a counter-offer made by offeree’s, offeror have the right to accept or
decline the other party counter-offer. In this case, Sam told Ali that he is willing to take Ali’s
initial proposal of RM5,000.00 for the fan. Sam make a new offer to pay RM5,000 for the
antique table fan but Ali now refused to have any agreement with Sam. Acceptance of
proposal interpret as “ when the person to whom the proposal is made signifies his assent
thereto, the proposal is said to be accepted: a proposal, when accepted, become a promise”
based on S2(b) Contract Act 1950 . Ali did not have acceptance for the proposal and there
is no agreement between Ali and Sam. This point can be shown in a case of Hyde v Wrench
(1840). “ The defendant, Mr Wrench offered to sell his house for £1,000 to the plaintiff, Mr
Hyde. The plaintiff in reply offered £950 but defendant refused. The plaintiff then sought to
accept the original offer of £1,000. The defendant refused to sell to the plaintiff. In this case,
when the plaintiff offered £950, he cancelled the £1,000 offer and could not back track and
accept. The court dismissed the claims and held that there was no contract for the house
between Mr Hyde and Mr Wrench because a counter-offer is made this terminates the
original offer.”

In the end, no sustainable agreement is made between Ali and Sam. This is due to
Ali’s unspecify contract detail that make an agreement unclear and unspecify. Besides that,
Ali’s refused the counter-offer made by Sam, the rejected offer support that there was no
contract between Ali and Sam.