Chapter 2 : Law of Contract
Karuppan Chetty v Suah Thian [1916]
Held: The court held that the requirement of certainty was not met when the parties agreed upon the granting of a lease ‘at RM35.00 per month for as long as he likes’.
2.4
EFFECTS OF CONTRACT
2.4.1 Valid Contract
A valid contract is a written or expressed agreement between two parties to provide a product or service. There are essentially six elements of a contract that make it a legal and binding document. A contract is enforceable when both parties agree to something, back the promise up with money or something of value, both are in sound mind and intend to carry out their promise and what they promise to do is within the law. Failure to comply with the terms and conditions stated in the contract will enable the injured party to discharge the contract.
Privity of Contract
Only the person who are parties to the contract can acquire right and incur liabilities under it. The issue of whether there was privity of contract between the appellant and third party arose in Andrew Christopher Chuah v Choong Eng Chuan (2007) 2 CLJ 405. Apart from special circumstances a person who is not a part to a contract has no right to sue on the contract. The position of third party is that obligations under a contract generally cannot transferred unless all the parties consent (novation). If all the parties consent, liability may be transferred by way of novation. This is a tripartite agreement where the original parties agree to rescind their contract in consideration of a new contract being entered into on the same terms between one of the original parties and third party.
2.4.2 Voidable Contract
Section 10 of the Contracts Act 1950 provides inter alia that all agreements are contracts if they are made by the free consent of parties. By virtue of Section 14, consent is said to be free when it is not caused by one or more of the following: o Coercion o Undue influence 35
