Contract is a voluntary, deliberate, and legally binding agreement between two or

more competent parties. Contracts are usually written but may be spoken or implied, and
generally have to do with employment, sale or lease, or tenancy. The common law of contracts
has been developed in England around 1950. In Malaysia, the Contracts Act 1950 governs the
law of contract. A contractual relationship is evidenced by an offer, acceptance of the offer, and
a valid legal and valuable consideration.
Each party to a contract acquires rights and duties relative to the rights and duties of the
other parties. However, while all parties may expect a fair benefit from the contract, it does not
follow that each party will benefit to an equal extent. Existence of contractual-relationship does
not necessarily mean the contract is enforceable, or that it is not void or voidable. Contracts are
normally enforceable whether or not in a written form, although a written contract protects all
parties to it. Some contracts, such as for sale of real property, installment plans, or insurance
policies must be in writing to be legally binding and enforceable. Other contracts assumed in,
and enforced by law whether or not the involved parties desired to enter into a contract. In
addition, contract can also be formed orally. The remedy at law for breach of contract is usually
called damages or monetary compensation. In equity, the remedy can be specific performance of
the contract or an injunction. Both remedies give the damaged party the benefit of the bargain or
expectation damages.
A legally binding contract needs an offer, acceptance and consideration. There are seven
elements of valid contract. The first element is Offer. Offer or proposal according to Section 2(a)
of the Contract Act 1950 is an expression of willingness to do or abstain from doing anything
with a view to obtaining the assent of that other to the act or abstinence. A person is said to make
an offer when he proposes a set of these terms will form a legally binding agreement when the

offeree accepts them. There are two types of offer which is bilateral and unilateral. Bilateral
means the offer that is made to a specific person or group of persons. Unilateral means offer that
is made to the world at large. The acceptance to a mere invitation to treat is the offer.
The second element is acceptance. According to Section 2(b) of the Contract Act 1950
specifies that when a person to whom an offer is made signifies. The acceptance may be in
writing or oral or it may be inferred from conduct. Besides that, acceptance must be
communicated by the offeree or by someone with his authority. The offeree may expressly or
implied prescribe the method of communicating acceptance.
The third element is consideration. According to Section 2(d) of the Contract Act 1950, a
promise is only legally binding if it is made in return for another promise or an act. In easier
word it is something for something or promise for promise. There are three forms of
consideration. First is executed consideration means the bargain consist of mutual promises.
Next is executor consideration. It is the consideration for the promise is a performed. The third
type is past consideration means if the act put forward as consideration was performed before
any promise of reward was made it is not a valid consideration.
A breach of contract occurs when a party who has signed a contract fails to live up to his
responsibilities as specified in the contract. There is a range of legal remedies for breach of
contract. For example, a monetary compensation in the event that the other party fails to live up
to the terms of the contract. A contract may also be canceled because of a breach or changed to
include the terms the parties desire. In some cases, a judge may even order either party to live up
to the terms of the contract. The content of the contract are made up of terms and or implied.
Terms may be classified as either conditions or warranties. A statement may be an express term

of the contract or a representation inducing its formation. Different remedies are available if a
term is broken or representation is untrue. A warranty is a term in which subsidiary to the main
purpose of the contract, breach of which entitles the innocent party damages.
In this case, Laxshan purchase a car with a local dealer (Super Wheels Sdn. Bhd). The
salesman informs Laxshan that it is a 2011 Honda Civic. The car has a 1.8 litre engine, it has
only travelled 30, 000km and it is a good little runner that will give him no problems or Ill eat
my hat. However, Laxshan soon discovered that it is actually a 2009 model, it has actually
travelled 120, 000km, and it is unreliable and has given him many problems due to its difficulty
in starting and the engine cutting out when the car is idle. This lead to Laxshan experiences a
fraud from the contract between the two as there is clearly a contract between them as there is
agreement, a result of an offer, acceptance and consideration. Thus, he deserves to claim for
damages from the Super Wheel Sdn. Bhd. for not following the contract.
Laxshan may report this case to the police and bring it to the court. One of the damages that
he can claim is by suing the Super Wheel Sdn. Bhd as they breach the contract. He also can be
demand for monetary compensation in the event that the other party fails to live up to the terms
of the contract. A contract may also be canceled because of a breach or changed to include the
terms the parties desire. A judge of this case may even order the blame party to live up to the
terms of the contract.
In conclusion, in my opinion, the judges of the court will be on Laxshan side as he is
innocent party here and order Super Wheels Sdn. Bhd. to pay for the damages to Laxshan as he
incur a loss.
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