Questions - Contract Law [PDF]

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QUESTIONS

1.

Jenny was out shopping when she saw a display of a well - known brand of T – shirt in a shop window. Beside the display was a large card with the words, “Special offer. RM 10. For today only”. Jenny immediately went into the shop and chose a T – shirt. However, when she wanted to pay at the payment counter, she was told that the T – shirt was not for sale. Jenny wishes to know whether she could legally insist on purchasing the T – shirt at the price of RM 10. Required: Analyse the problems from the perspective of contract law, and advise Jenny on the legal position.

2.

On 1 June 2018 Mohan wrote to Chee Seng offering to sell his prized painting for RM3000. The letter reached Chee Seng on 3 June 2018. Chee Seng immediately replied stating that he was willing to pay RM2000 for it. Mohan received this letter on 7 June 2018 but did not give any further reply. On 14 th June 2018, Chee Seng wrote to Mohan accepting Mohan’s original offer. Mohan now refuses to sell the painting to Chee Seng. Chee Seng wishes to sue Mohan for breach of contract. Advise Chee Seng

3.

On 2 January 2014, Ali wrote a letter to his friend, Bakar, offering to sell to him (Bakar) his durian orchard for RM 1 million. The letter expressly stated that Ali would keep the offer open for 7 days. This letter reached Bakar on 3 January 2014. On 4 January, 2014, Ali changed his mind and sent a letter to Bakar revoking his offer. On the same day Bakar sent a

letter to Ali accepting his offer. Ali’s letter of revocation reached Bakar on 6 January 2014. Upon receiving the letter Bakar immediately telephoned Ali informing him that he accepted Ali’s offer and reminded Ali that Ali could not revoke his offer as Ali had promised to keep the offer open for 7 days. Required: Advise Bakar whether a valid contract has arisen between him and Ali. Question 4 Linda, the 16 year old daughter of a wealthy businessman, who is currently a college student, seeks your advice in respect of the following matters: (i) One week ago, her friend Jonathan had offered to sell her his motorcycle for RM2500. Considering it would be a very convenient mode of transport to go to college and back she agreed to purchase it and took delivery of it. Jonathan is threatening to sue her for the purchase price, which she still has not paid Advise Linda. Support your answer with relevant cases or examples

(ii) Two years ago Linda was granted a loan for RM80000 by the Selangor State Government to pursue her education in one of the local institution of higher learning. Unfortunately, she did not complete her studies and returned to Malaysia. The Selangor State Government is now suing her for the repayment of the loan. Advise Linda whether she is legally bound to pay the Selangor Government? Support your answer with relevant cases.

(b) In June 2009 Jane borrowed a sum of RM 8,000 from Shah. She promised to repay the money by the end of September 2009. However, Jane did not

repay the amount as promised. On 1 November 2016 Shah wrote to Jane reminding her of the outstanding debt. In response, Jane telephoned Shah and told him that she (Jane) would settle the debt by December 2016. However, Shah has still not received any repayment from Jane. Advise Shah whether he can successfully sue Jane to recover the debt. Question 5 Surinder, a famous racing driver, agreed to sell his racing car to Ben for RM 80,000. Although the price was very high, Ben was willing to pay because there were only ten such cars which were ever produced by the manufacturer, and also because it had been used for racing by such a celebrity. He paid a deposit of RM40000. The car was to be delivered to him the following week. However, he has just been informed by Surinder that he has changed his mind about selling the car and that the deposit of RM40000 would be refunded. Ben is unhappy about this. It would be almost impossible to buy a similar car elsewhere. He wishes to sue Surinder for breach of contract. Required: Explain to Ben the remedies available to him against Surinder for breach of contract and advise him as to which of those remedies is most suitable for him.

Question 6 Whilst at work Cindy always parked her car in a car park operated by Metro Parking Sdn. Bhd. At the entry to the car park just in front of the payment machine there was a large sign which states: “Clients use these facilities strictly at their own risk and Metro Parking Sdn. Bhd. accepts no liability whatsoever for any damage or injury sustained by those using this car park”. Cindy was aware of the sign but never paid much attention to it. Last week when she returned to her car to go home after work, she was shocked to find her car badly damaged. Cindy is not sure if she can sue Metro Parking Sdn Bhd for damages. She wants to know to what extent can Metro Parking Sdn Bhd be held responsible for the damages to her car. QUESTION 7 Ali entered into the following contracts with Buildwell &Co, a firm dealing in realty and construction: (a)

A contract to purchase a piece of land from Buildwell at a price of RM10,000, a price very much below the market price.

(b)

A contract for the lease of an office building at a price of RM1,500 per month, a price which reflects the current market price. The term of the lease is stated as “for as long as the lessee wishes” Buildwell now refuses to complete the contract for the sale of the land on the ground that the price is too low. Further, it refuses to proceed with the grant of the lease claiming that the contract is not valid.

Required: Advise Ali on the legal position in respect of the aforementioned contracts, (a) and (b) QUESTION 8 Darul wanted to renovate his house and entered into a contract with AB Contractors Sdn Bhd for this purpose. Under the terms of the contract the contractors agreed to do the following renovations according to given specifications: (i)

Extend the kitchen

(ii)

Re – tile the floor of the entire house

(iii)

Construct an additional room

The total cost of renovation was agreed at RM80,000. After the construction of the additional room and the extension of the kitchen, the foundations of the house gave way due to poor soil conditions causing the entire house to collapse. The contractors are now demanding payment for the work already done, amounting to RM50,000. Darul refuses to pay. Required Advise: AB Contractors Sdn Bhd