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MATERIAL FACTS

A contract was made between Mrs Yap and Kemas Sdn Bhd (Kemas) in January 2016
whereby they provide a night patrol service whereby a patrolman would visit and check
the stable enclosure four times a night between the hours of 9.00 pm and 7.00 am for
RM 70 per week which is also a fixed charge.

First Issue

The issue is whether there is a valid contract between Mrs Yap Ah Kow and Kemas Sdn
Bhd?

Law
● Elements to a valid contract shall be established.
Section 14 of Contracts Act 1950 states that “Consent is said to be free where it
is not caused by one of the following: coercion, undue influence,
fraud,misrepresentation, and mistake.”

Application
➔ Valid contract shall consist of free consent by the parties, a lawful consideration
as well as the subject matter in contract is in a lawful form.
➔ Kemas agreed for a fixed charge of RM 70 per week to patrol thus, consideration
has been established between Mrs Yap and Kemas and there is a contract.

Second Issue
The issue is whether the damage was within the parties contemplation at the time when
the contract was made?

Law
● Section 74(1) and (2) of the Contracts Act 1950, if a contract is broken, the party
who suffers by the breach is entitled to claim for damages.
● In Malaysian Rubber Development Corp Bhd v Glove Seal Sdn Bhd, Courts
have treated position under second limb of section 74(2) to be similar to second
limb of Hadley v Baxendale, where party may recover damages which may
‘reasonably be supposed to have been in contemplation of both the parties, at
the time they made the contract.’

Application
➔ The loss of three horses which were Pinang, Petai and Peanuts was within the
contemplation of both parties when they made the contract.
➔ Mrs Yap had informed Mr Samy to be particularly vigilant the night when he had
seen prowlers near the perimeter fence thus the situation where the prowlers
might have broken into the stables was communicated to the defendant, Kemas.

Third Issue
What were the terms of the contract insofar as they are relevant between Mrs Yap and
Kemas?
Law
● Terms in fact may be implied by the courts to allow for the
unexpressed intentions of the parties to take effect. This may be needed as
parties may, for whatever reasons, have omitted to include a term which they
would have done so if they had thought about it.
● In the case, Sababumi v Datuk Yap Pak Leong, the Federal Court referred to the
business efficacy test and the officious bystander test and held that both tests
must be satisfied before a term can be implied.

Application
● Mrs Yap telephoned Kemas to provide an all-night security guard at a fixed fee of
RM 95 per night. However, the service was not mentioned in the contract.
● 18 April 2016, telephoned Kemas for all-night patrol. No payment in advance was
requested.

Fourth issue

The issue is whether the loss suffered by Mrs Yap caused by Kemas?