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Commercial Law

Commercial Law. Contract Law tutorial – answering questions. How to answer law questions?. 2 types of questions Problem based; and Essay How to answer problem based law question? Understand how the law works Use the ILAC formula. Sample Question 1. Problem Based

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Commercial Law

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  1. Commercial Law Contract Law tutorial – answering questions

  2. How to answer law questions? • 2 types of questions • Problem based; and • Essay • How to answer problem based law question? • Understand how the law works • Use the ILAC formula

  3. Sample Question 1 • Problem Based • Alex, a high school senior is 17 years old. He operates a business that runs bus trips for high school students. He enters into a contract with the Hebat Travel SdnBhd to charter a bus for a class trip to Kuala Lumpur. He later on did not pay for the service provided by Hebat Travel Sdn Bhd. Decide. • 10 marks

  4. Sample Question 2 • Topic? • Capacity to enter into contract • Relevant issues? • Does Alex’s age allows him to legally enter into a contract? • Does the contract falls under an exception that allows Alex to execute the contract as a minor? • What is the effect of a contract entered by minor? • Can Hebat Travel sue Alex for non-payment of services? • What is the law? • On Alex’s capacity • Ss 10(1), 11 CA • Age of Majority Act 1971 • On the status of the contract • Case: Tan Hee Juan v The Boon Keat • S. 2(g) CA

  5. Sample Question 1 Sample Answer In order to enter into a valid contract that is an enforceable contract by the law, the parties to the contract should have the capacity thus competent to enter into the contract and of sound mind. This is by virtue of section 10 and 11 of the Contracts Act 1950. A person is said to be competent if he has attained the age of majority as provided by the Age of Majority Act 1971 which is 18 years old. By applying the above provisions, it is clear that Alex could not enter into a valid contract because he is still 17 years old. The contract also does not fall under any of the exceptions recognised by the law such as contract for necessaries. The effect of such matter can be illustrated by the case of Tan Hee Juan v The Boon Keat whereby the transfer of land executed by an infant was held void. Hence by virtue of section 2 (g) of the Contracts Act 1950, a void contract cannot be enforceable by law. Therefore in the present case, Hebat Travel SdnBhd could not sue Alex for not paying for the service provided as the contract is not enforceable by the law.

  6. Sample Question 1 • What if Alex entered into a scholarship contract with JPA? • Will the result be the same?

  7. Sample Question 2 • Problem Based • Nina is still very new in business. She entered into a contract with Conman Consultant Sdn Bhd. Later she claimed that Conman breached certain terms in the contract. Denying the allegation, Conman produced the copy of a three page agreement signed by both parties. However Nina alleged that the middle page of the three page agreement is switched after the contract is signed. Advice Nina. • 10 marks

  8. Sample Question 2 • Topic? • Relevant issues? • What are the laws?

  9. Sample Question 2 Sample Answer For a contract to be valid, it must fulfill the requirement of free consent. It means that parties entering into the contract should not have any elements that negates the free consent. This is provided by section 10(1) and 14 of the Contracts Act 1950. It is provided by the law that free consent will not exist if it there is element of either coercion, undue influence, fraud and misrepresentation. Based on the facts, the most suitable element to be applied is fraud as provided under section 17(d) of the Contracts Act 1950. Here it is stated that any act fitted to deceive is fraud. If Nina can prove that Conman switched the middle page of the contract then it will show Conman had acted is such a manner to deceive Nina so that they can get away with the non performance of the contract. Thus it can be said that Nina’s free consent is negated with Conman’s act. The effect of such contract is provided under section 19(1). It will be considered as a voidable contract at Nina’s option as provided by section 2(i). If Nina insist to continue with it then based on section 19(2) she shall be put in a position in which she would have been if the middle page of the agreement is not switched. On the other hand she can also rescind the contract as allowed under section 19(1) as she has to restore any benefit received to Conman as required under section 65.

  10. Sample Question 3 • Essay • State the main differences between a void and voidable contract in the context of the element of free consent required in an agreement. (20 marks)

  11. Sample Question 3 • What is the law? • S.10 & 14 • S. 2(i) • S. 2(g) • S.19(1), 19(2) & 65 • S. 21& 66 • What is the structure? • Discuss free consent and the circumstances that negates it. • Discuss voidable agreements and its effects • Discuss void agreements and its effects • State your conclusion

  12. Sample Question 3 Free consent is an essential or required element of a valid contract. Its absence can caused the contract to be not valid. This is provided under section10 of the Contracts Act 1950. This is further explained under section 14, where it lists the circumstances that will cause negation of free consent and these circumstances will decide whether the contract will be voidable or void. As provided under section 2(i), voidable agreement is where the agreement is enforceable only at the option of one party. Under the context of ‘free consent’ it occurs when the contract was entered due to coercion, undue influence, fraud and misrepresentation by virtue of section 19(1). When such circumstances occurred the party which the free consent is in question may either choose to rescind the contract as per section 19(1) or to continue with the contract as allowed under section 19(2). If he chooses to rescind then he need to restore any benefit gained from the contract. On the other hand, if he chooses to continue with the performance of the contract he shall be put in the position in which he would have been if the representation made had been true. This is provided under section 65 and 19(2) respectively. Void agreements is an agreement unenforceable by the law as per section 2(g). With regards to the issue of ‘free consent’, section 21 provides that existence of mistake will cause the contract to be void. Such mistake must be one of fact that is essential to the agreement. The only effect for void contracts due to mistake of fact is that the agreement is unenforceable and any person who has received any advantage under the agreement is bound to restore it or to compensate for it to the other person as required under section 66.

  13. Tutorial Conclusion • Conclusion? • Most students re-quote the question as conclusion • It should state your understanding on the matter

  14. Conclusion In a nutshell, free consent once negated by the elements provided by the law will cause the contract to either be void or voidable with different effects or outcomes thus illustrates the law’s protection to the parties whom free consent has been affected.

  15. Tips • One of the most important requirements for answering questions on the law is that you must be able to back the points you make with authority, usually either a case or a statue. It is not good enough to state that the law is such and such, without stating the case or statute which says that that is the law. • Understand well the sections of the Contracts Act 1950. • Higher marks will be given where the candidate has cited authorities by name; quite simply it helps to give the impression that you know your material thoroughly, rather than half-remembering something you heard once in class. • In law exams, there is not usually a right or wrong answer. What matters is that you show you know what type of issues you are being asked about. Essay questions are likely to ask you to ‘discuss’, ‘criticize’, or ‘evaluate’, or ‘examine’. You simply need to produce a good range of factual and critical material in order to do this. • Please do not reproduce large chucks of lecture notes! • The lecturer will want to see evidence that you understand the topic you are writing about.

  16. Always remember to… • Answer the question asked • Plan your answer • Provide discussion of the law and facts (ESSAY) /Apply the law to the facts (PB) • Structure

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