The issue arise here is whether Dr. Albert have rights to claim the house as promises by Ms.

Cade in the court.

Dr. Albert have experience running a clinic that give free medical care to impoverished families.
He run his business in a house that owned by Ms. Cade. He pay the rent expenses to Ms. Cade on
month-to month basis. At some point, he do an offer to Ms. Cade to buy the house. Ms. Cade accepted
his offer and want to sold the house at price of RM 200,000. Dr. Albert ask Ms. Cade to give him six
months to pay for the house. In the meantime, real estate price rose up and she sell the house to
somebody else. When the time that promises by both parties comes, Dr. Elbert presented a cheque with
sum of RM 200, 000 to Ms. Cade. But, Ms.Cade had already sell the house at price of RM 350,000.
This issue can be discussed under Contract Act 1950. Section 2(h) of Contract Act 1950 define
contract as an agreement enforceable by law. Thus, a contract is an agreement which is legally
binding between parties. It also can be simply define as an agreement between 2 or more parties. In
order to bring the contract in to existance there are seven element that must have in the contract.
Firstly is offer, offer or proposal is necessary for the formation of an agreement. Section 2(a)
CA 1950 provides that ' when a person signifies to another his willingness to do or to abstain from doin
anything, with a view to obtaining the assent of that other to the act or abstinence, he is said to make a
proposal. A person who makes an offer is called an offeror, while a person to whom the offer was made
is called offeree. Section 9 of CA provides that if an offer is made in word or writing it is said to
express. If an offer is made by one act or behaviour. It said to be implied. In this case, we can see
clearly that Dr.Albert is an offeree when he ask Ms. Cade to sell the house. The offer was made to Ms.
Cade as she was an offeror.
Second element is acceptance, section 2(b) CA provides that if a person to whom the offer was
made signifies his assent thereto, the proposal is said to be accepted. Once an offer is accdepted it will
become promise. Section 2(c) CA refers to the person accepting the proposal as the 'promisee'. For a
proposal to be converted into a promise. The acceptance of that offer must be absolute and unqualifiedsection 7 of CA. Acceptance must be absolute and unqualified so that there is complete consensus. If
the parties still negotiating, an agreement is not yet formed. Any modification of the offer does not
constitute an acceptance but amounts to a counter offer. A counter offer is treated as a rejection of the

original offer. Acceptance also must be expressed in some usual and reasonable manner, unless the
proposal prescribes the manner in which it is to be accepted. In this issue, Ms. Cade is the one who
accept the offer. The acceptance was made in writing when she gave Dr. Albert a signed note reading as
follows:
In return for all that Dr.Albert has done for our community, I hereby promise that if he
delivers RM200, 000 to me at any time between now and November 1 of this year, I
will give him title to the building that houses his clinic.
Next, intention to create legal relation. Although the Contract Act 1950 is silent on the intention
to create legal relations as one of the requirements of a valid contract, case law clearly dictates
necessity for this requirement parties involve shall have intention to create legal relation agreement. An
agreement does not create a binding contract. Law requires that parties to an agreement intend that it to
be legally enforceable. There are two types of agreement, business Agreement and Family Agreement

The contract which is legally binding between Dr. Albert and Ms. Cade is a business agreement.
As a prove, Ms. Cade was giving Dr. Albert a signed note containing the condition of the contract. In
business agreement, there is a presumption that parties intend to be legally binding. In case of Low Kar
Yit & Ors v Mohd Isa & Anor, the held said even though it is a business agreement, since there is a '
subject to contract' clause, a contract will only come into existance when parties signed a formal
contract.
Fourth is element of consideration, Section 26 CA state that an agreement without consideration
is void. Consideration can be simply defined as the price which one party pays. Generally, there are
three types of consideration executory consideration,executed consideration and past consideration.
In this issue, we can see that the consideration that involved in the contract of Dr. Albert and Ms. Cade
is executory consideration, where Ms. Cade agree to give the property to Dr. Albert if Dr. Albert willing
to pay RM 200,000 for the house.

Fifth element is certainty, the terms of an agreement cannot be vague but must be certain.
Section 30 CA state that 'an agreement which is uncertain or is not capable of being made certain is
void.' At common law, there is two aspects of uncertainty. Language used is too vague and failure to
reach an agreement on a vital term of the contract. In the case of Karuppan Chetty v Suah Thian the
held said that the contract is as parties have agreed to a lease of RM35 per month for as long as he
likes. The contract is void because of the words be used in the agreement. In the issue of Dr.Albert
and Ms. Cade, we can see the overall laguage that used in the signed note is clear and the agreement
can be reach on a vital term of the contract.
Capacity also one of the important element of contract. The parties entering into a contract
should also competent to contract, they must have legal capacity to do so. Section 11 of CA state that
capacity refers to the ability of the parties to a contract to fully understand its terms and obligations. In
Malaysia the age of majority is 18 years (Age of Majority Act 1971). In case of Mohari Bibee v
Dhurmodas Ghose. The appellant lent the respondent the sum of $Rs20,000. Appellant knew that the
respondent is a minor. Later, respondent brought an action for a declaration. The held said that the
contract that entered into by parties is not competent. The contract is void. But, law provides exception
to the rule that minor can enter into a contract by Age of Majority Act 1971. First is Contract of
Necessaries, second is Contract of Scholarship, third is Contract of Insurance and last is Contract of
Marriage.
The last element of contract is free consent, all agreements are contracts if they are made by free
consent of parties. Section 10 of CA 1950 provides inter alia that all agreements are contracts if they
are made by the free consent of parties. Section 13 CA state that two or more persons are said to
consent when they agreed upon the same thing in the same sense. Furthermore, Section 14 CA state
that, consent is said to be free when it is not caused by coercion, undue influence, fraud,
misrepresentation, mistake. Section 19(1) of the said act provides that when consent to an agreement is
caused by coercion, fraud or misrepresentation, the agreement is a contract voidable at the option of the
party whose consent was so caused. Section 19(2) goes on to say that a party to a contract, whose
consent was caused by fraud or misrepresentation, may, if he thinks fit, insist that the contract shall be
performed, and that he shall be put in the position in which he would have been if the representation
made had been true.

As illustration of this legal principle, section 21 of CA provides for cases where there is a
mistake of fact. The basis for rendering agreements void under section 21 is that there has been no free
consent between the parties-section 14. In the case of Dr. Albert and Ms. Cade, we can see clearly there
is a fraud committed by Ms. Cade to Dr. Albert. She promise to sell the house at price of RM200,000
and give Dr. Albert six months to get the money. But, because of some reason she sell the house to
somebody else at price of RM350,000 within the period.
Fraud is defined in section 17 of CA 1950, to include certain acts which are committed with
intend to induce another party to enter into contract. Section 17 then lays down five different acts
which may constitute fraud. As a general rule, it may be stated that whatever a person causes another to
act on a false representation which the maker himself does not believe to be true, he is said to have
committed fraud.
The best action that Dr.Albert can do is by claiming remedies for the breach of contract. '
Remedy'is the method by which an injured party enforces a right or corrects a loss. The remedies
available to the injured party will depend on the nature of the breach and the results will differ between
parties. The usual remedy for a breach of contract is an award of damages, which common law remedy.
In case of Dr. Albert and Ms. Cade , the best remedy that court can apply is damages. The main
purpose of damages is to enable the innocent party to receive monetary compensation from the party
responsible for the breach of contract. Damages not awarded to punish a wrongdoer, but rather to put
the injured party back in the position that they would have occupied if the contract had been performed
originally intended. Therefore, damages are calculated on the basis of looking at what the position
should have been if the contract had been properly performed.
Damages are granted to a party as compensation for the damages, loss or injury he suffered
through a breach of contract. Section 74 of the Contracts Act 1950 sets out the provision for such
compensation. In order words, the general principle for the assessment of damages is compensatory.
The illustration to section 74 clearly indicate that the party may recover damages for other expenses
incurred as a result of the breach, and for the differences between the price of goods as contracted for
and the actual price the goods were sold as a result breach.

Thus, section 74 of CA provides that when a contract has been broken, the party who suffers by
the breach is entitled to receive, from the party who has broken then contract, compensation for any
loss or damages caused to him thereby, which naturally arise in the usual course of things from the
breach, or which parties knew, when they made the contract, to be likely to result from the breach of
contract.
As a conclusion, Ms. Cade need to be responsible for what she have done to Dr. Albert. In the
period of six months, Dr. Albert have try his best to get the money and work hard in order to fulfill the
condition of the contract. But, when Ms. Cade committed a fraud by selling the house to somebody
else, we can see Dr. Albert suffering loss because there is a lot that Dr. Albert had done in period of six
months. In a nutshell, Dr Albert have Rights to sue Ms. Cade in the court and Ms. Cade need to give
some monetary compensation to Dr. Albert as a remedies for breach of contract.

Assignment 1
Name : Mubarak bin Ahmad
Student ID: 201407040020
Subject : Business Law
Lecturer: Ms. Sharvina Bte. Shajahan
Date of Submission: 08/03/2016

City University College of Science and Technology

Business Law BBCL2113
Individual Assignment
Dateline: 8th of March 2016

30 marks (worth 15%)

Please print and bind your assignment prior to submission. Five (5) marks shall be
deducted for each day of late submission.
Problematic Question:
Dr.Albert has for some years run a clinic offering free medical care to impoverished families.
The clinic occupies a house owned by Ms.Cade and leased from her on a month-to-month
basis. As on 1st of May, 2013, Dr. Albert met Ms.Cade to ask if she would like to sell him the
house. Id consider selling it for RM200, 000, she replied.
I think that I can raise RM200, 000 if you give me six months, said Dr.Albert. But I will need
to know potential donors proof that I can buy the house at that price. Ill be glad to help on
that count, smiled Ms. Cade. She gave Dr.Albert a signed note reading as follows:
In return for all that Dr.Albert has done for our community, I hereby promise that if he
delivers RM200, 000 to me at any time between now and November 1 of this year, I
will give him title to the building that houses his clinic.
Dr.Albert thanked Ms.Cade. He took the note and set to work raising the required money. In
the meantime, real estate prices soared. On September 1, Ms.Cade told Dr.Albert that she
was putting the house on the market. Ive raised RM180, 000 and will have the rest soon! he
insisted.
On October 1, Dr.Albert proudly presented Ms.Cade with a cheque for RM200, 000 and
requested the title to the clinic building. With some embarrassment, she told him that she no
longer held the title. I just sold the house for RM350, 000.
Advice Dr.Alberts rights as against Ms.Cade.