Pharmaceutical Society of Great Britain v Boots Cash Chemist ltd (1953)

Plaintiff : Pharmaceutical Society of Great Britain

Defendant : Boots Cash Chemist ltd
*Under section 18(1) of the Pharmacy and Poisons Act 1993 an offence to sell
certain meds unless the sale is affected by, or under supervision of a registered
pharmacist.
Boots Cash Chemist was a self-service chemist. They had their products on
shelves and customers would pick drugs off the shelves, put it in their basket and
pay for them at the cash register under the supervision of a qualified pharmacist.
There was no supervision until the customer went to the register where the
registered pharmacist would supervise the transaction, and could intervene, if
necessary. Pharmaceutical objected and argued that under section 18(1) of the
Pharmacy and Poisons Act 1933, that was an unlawful practice. Therefore, Boots
was charged under the said Act.
The court held that the display of goods was an invitation to treat not an offer.
The customers make an offer to buy when they took the goods off the shelves
and handed them to the pharmacist at the cash register. This offer could be
either accepted or rejected by the pharmacist at the cash desk. The cashier is
under the shopkeepers authority to make acceptance, hence a contract has not
been made until the cashier accepts the purchase. Therefore, Boots Cash was not
in breach of the law.

Caelho v The Public Services Commision

Plaintiff : Caelho
Defendant : The Public Services Commision (PSC)
Plaintiff applied for a position in response to a newspaper advertisement placed
by the defendant. He was later informed that his application was accepted.
Subsequently, the defendant tried to terminate his employment on the basis that
the plaintiff was appointed on probation.
The plaintiff then sued the defendant for breach of contract. Plaintiff was
informed that the defendant had decided that he should not be dismissed but his
appointment on probation be terminated forthwith by payment of one months
salary in lieu of notice.
Therefore, there was a valid contract between the plaintiff and defendant. AND
the purpoted termination of the plaintiffs employment was not valid.

Malay mail advertisement invitation to treat (any qualified persons to

apply)
Applications from applicants offer (could be accepted with or without
conditions)
Appointment letter given to plaintiff unconditional acceptance.

TO WHOM CAN A PROPOSAL BE MADE

1) To a particular person Boulton v Jones
Plaintiff : Boulton
Defendant : Jones
Jones used to have business dealings with Brockle Hurst.
He sent an order (offer) to Brockle Hurst for the purchase of certain goods.
By the time the order reached Brockle Hurst, he had sold his business to
Boulton.
Boulton then sent all the goods as per the order without informing Jones
that the business had changed hands.
When Jones found out that the goods were not supplied by Brockle Hurst,
he refused to pay for them.
Jones was then sued by Boulton for the price.
Court held; Jones was not liable to pay for the goods a rule of law that if a
person intends to contract with A, then B cannot give himself any right
under it.

2) To general public - Carlill v Carbolic Smoke Ball

Plaintiff Carlill
Defendants Carbolic Smoke Ball (CSB)
CSB advertised in several newspapers that a reward of 100 pounds would
be paid to any person who bought one of their smoke balls, used it as
directed and still suffer from influenza.
Also announced that a sum of 1000 pounds had been deposited with the
Alliance Bank as a proof of their sincerity.
Mrs. Carlill had seen the advertisement, then used the smoke balls as
directed for a period as specified but still had influenza.
She then claimed 100 pounds from the company.
The company argued that the advertisement does not amount to an offer
which could turn into a contract by acceptance.
Court held; the statement in the advertisement created a binding
obligation.
It was an offer addressed to the public at large which could be accepted by
anyone who fulfills the conditions attached to the offer.
*similarly, an advertisement to give reward for the return of lost goods or
property would be considered as an offer to a public at large or a general offer.

COMMUNICATION OF PROPOSAL R v Clarke

Plaintiff : R
Defendant : Clarke

Australian Government made an offer to pay a reward for any information

leading to the arrest and conviction of persons responsible for the murder
of 2 police officers.
Mr. A and Clarke were arrested for the crime.
Clarke then gave information which led to the arrest of another person, Mr.
B.
Mr. A and Mr. B were later convicted for the crime.
Clarke was released as he was not found guilty.
He then brought an action to claim for the reward.
Clarke was failed in his action because he gave the information only to
release himself and not in response to the offer of reward.
Although Clarke had seen the offer but at the time of giving the
information, that reward was not present to his mind, he had forgotten it
and was so excited to be released.

ACCEPTANCE AND COUNTER OFFER

1. Request reduce price Hyde v Wrench
Plaintiff : Hyde
Defendant : Wrench

Defendant offered to sell his farm to the plaintiff for 1000 pounds.
Plaintiff said that he would give 950 pounds for the farm.
Defendent refused and later, the plaintiff said that he agreed to pay 1000
pounds.
Upon the refusal of defendant to sell the farm, plaintiff brought an action
for specific performance.
Court held; the plaintiffs response to the offer was counter-offer which
rejected the original offer so there is no contract created.

2. Request for further information Stevenson, Jacques & Co v McLean

Plaintiff : Stevenson, Jacques & Co
lDefendant : Mc Lean

D offered to sell iron at 40s per ton.

P sent a telegram to D saying please answer whether u would accept
payment for delivery over 2 months or if not, the longest limit that u would
give.
There was no response from D and the D then sold the iron to another
purchaser thinking that the P had rejected the offer.
Court held; P did not make a counter-offer.
The telegram was only an inquiry which should have been answered by the
D and could not be treated as a rejection of the offer.
A distinction must be made between a counter-offer and a mere request
for further information.
An inquiry does not reject the original offer and hence, the offer still
stands.

3. In the process of negotiation Lau Brothers & Co v China Navigation Co.

Ltd
Plaintiff : Lau Brothers & Co
Defendant : China Navigation Co. Ltd

Negotiations for the delivery of logs were conducted through a series of

telegrams and letters.
Whilst still in the negotiating stage, the defendant withdrew.
Court held; the parties were still in a state of negotiation and no
agreement was formed. Therefore, the defendants were justified in
withdrawing.

COMMUNICATION OF ACCEPTANCE Felthouse v Bindley

*silence and absence of response/ total disregard is not acceptance.
Plaintiff : Felthouse
Defendant : Bindley
P offered by letter to buy his nephews horse.
He said if i hear no more about it, i shall consider the horse is mine.
The nephew did not give any answer but told B, the auctioneer to keep the
horse out of the auction sale.
However, B sold the horse to someone by mistake.
P sued B claiming that he should not have sold the horse to someone else
as there was already a binding contract between him and his nephew.
Court disagreed and held; there was no contract because there was no
communication of acceptance by the nephew.
Silence does not amount to acceptance and hence, there was no contract
created.

ACCEPTANCE THRU POST Ignatius v Bell

Plaintiff : Ignatius
Defendant : Bell
D offered to sell his land to plaintiff on condition that if the P would like to
accept the offer, the acceptance must be made on OR before the 20th
August 1912.
P sent an acceptance by registered post on the 16th August but the letter
only reached the D on 25th August.
The dispute whether there was a contract created as there was a delay.
Court held; the acceptance was exercised by the plaintiff when letter was
posted on 16th August even though it arrived much later.
Contract is created once the letter of acceptance is posted and hence, the
D was bound by the contract.

*when a letter of acceptance is posted, it binds the offeror from the

time that it is posted and not when it is received. Known as postal
rule.

*under this exception, the offeror is bound by the offerees acceptance

eventho he has no knowledge of the acceptance being made. Hence, a
valid contract is created when the acceptance is posted.

REVOCATION OF PROPOSAL to cancel or withdraw

S6 (b) Ramsgate Victoria Hotel v Montefiore
Plaintiff : Ramsgate Victoria Hotel
Defendant : Montefiore

D offered to buy shares in the Ps company in June.

D had paid a deposit into the companys bank.
D received no further news from P until November.
Share had been alloted to him (Ds offer been accepted) and D should pay
the balance.
D refused to accept the shares.
Court held; refusal by D was justified because such offer should have been
accepted within a reasonable time.
The period between June and November was clearly unreasonable.

CONSIDERATION
a) Executory consideration when one promise is made in return for another.
Example; illustration (a) Section 24.

A agrees to sell his house to B for RM10,000.

Bs promise to pay the sum of RM10.000 is the consideration for As
promise to sell the house.
And vice versa.

b) Executed consideration when a promise is made in return for the

performance of an act.
Example;

A agrees to pay RM200 to anyone who finds and returns his lost
handphone.
In response to the offer, B put some effort and finally finds the
handphone.
B returns it to A.
In this situation the act of B in finding and returning the handphone is
the executed consideration for As promise to pay.
As promise is a contract.

c) Past consideration when a promise is made subsequent to & in return for

an act that has already been performed (Kepong Prospecting Ltd v A.e
Schmidt & Marjorie Schmidt)
S, a consulting engineer, had assisted Mr. X in obtaining a prospecting
permit for mining iron ore in the state of Johore.
Also helped in the formation of the company, Kepong Prospecting Ltd.
Then was appointed as the Managing Director.
After company was formed, a contract was entered into between S and the
company under which the company promised to pay S 1% of the value of
all iron ore sold from mining land.
Company failed to pay to S.
S claimed on the amount promised.
ISSUE; whether there was a valid consideration from S for the promise of
the company??

Services given by S before the promise was made were sufficient to

constitute a valid consideration eventho those services were clearly past.

S26 AGREEMENT W/O CONSIDERATION IS VOID UNLESS;

(a) In writing and registered.
Expressed in writing.
Registered under the law.
Standing in a near relation to each other.
Re Tan Soh Sim
TSS in her last illness had expressed a wish that her estate should be
divided among her 2 adopted sons & 2 adopted daughters.
The legal next-of-kin of TSS, 3 sisters & 7 half sister and brothers,
respecting this wish, made an agreement renouncing all their rights in
favour of the 4 adopted children.
ISSUE; Whether the agreement was made on account of natural love &
affection AND whether the legal next-of-kin of TSS are in near relation to
their adopted nephews and nieces.
Held; Chinese adopted children are related to the adoptive parents and
brothers.
H/e they are not nearly related to the family of their adoptive mother.
Therefore, the legal next-of-kin of TSS were not in near relation to the 4
adopted children.
Contract was not valid not in writing and there was no natural love and
affection between parties standing in near relation to each other. `
(e) Consideration need not move from promisee Venkata Chinnaya v
Verikataramaya
A sister agreed to pay annuity of Rs 653 to her brothers who provided no
consideration for the promise.
H/e on the same day, their mother had given the sister some land
stipulating that she must pay the annuity to her brothers.
When the sister subsequently failed to fulfill her promise to pay the
annuity, her brothers sued her on the promise.
The sister claimed that there was no contract between her and the brother
since they did not give any consideration for her promise to pay the
annuity.

 Held; she was liable on the promise, for there was a valid consideration for
the promise eventho it did not move from the brothers.

WAIVER OF PERFORMANCE S64

i)

Payment of smaller sum in discharge of a larger sum.

Example: Illustration (b)

ii)

iii)

A owes B RM5000.
A pays to B and B accepts, in satisfaction of the whole debt RM2000 paid
at the time and place at which the RM5000 were payable.
The whole debt is discharged.

Payment by a 3rd party in discharge of a debt Kerpa Singh v Bariam

Singh
B owed K $8869.
Bs son wrote a letter to K offering $4000 in full satisfaction of his fathers
debt.
Bs son endorsed a cheque for the amount, stipulating that if K refused to
accept his offer, K must return the cheque.
Ks legal advisor cashed the cheque and retained the money.
They then proceeded to secure the balance of the debt.
Court held; acceptance of the cheque from Bs son in full satisfaction
precluded them from claiming the balance.

If a person accepts an agreed sum in satisfaction of an unscertained

debt, the debt is discharged.

Example: Illustration (d)

A owes B under a contract, a sum of money, the amount of which has not
been ascertained.

iv)

A without ascertaining the amount, gives to B.

B in satisfaction thereof. Accepts the sum of RM2000.
This is a discharge of the whole debt, whatever may be its amount.

A composition with creditors for the payment of a smaller sum.

Example: Illustration (e)

A owes B RM2000 and is also indebted to other creditors.

A makes an arrangement with his creditors including B to pay them a
composition of fifty sen in the ringgit upon their respective demands.
Payment to B of RM1000 is a discharge of Bs demand.

ADEQUACY OF CONSIDERATION Phang Swee Kim v Beh I Hock

Consideration need not be adequate as long as it is freely given.
R agreed to transfer to the A a parcel of land on payment of $500 although
the land was worth much more.
R later refused to perform the contract claiming that the promise was
unenforceable because of inadequacy of consideration.
Held; by virtue of Explanation 2 to S26, the inadequacy of consideration is
not important.
Contract is valid.
*h/e, if the issue of consent not freely given is raised, perhaps due to fraud or
misrepresentation, for the party to enter into a contract, the inadequacy of
consideration would be taken into account by the court.

CAPACITY TO CONTRACT
Contract by minors or infant Mohori Bibee v Dhurmodas Ghose
Plaintiff/Appellant : Mohori Bibee
Defendant/Respondent : Dhurmodas Ghose

A lent the R (a minor) the sum of Rs20,000.

The loan was secured by way of mortgage on some houses belonging to
the R.
The A knew that the R was a minor.
Later, the R brought an action for a declaration that the agreement was
void because he is still a minor and lack of capacity.
It was held that the agreement is void and therefore it is not binding on the
R.

Exceptions;
(ii)

Rajeswary & Anor v Balakrishnan & Ors

A marriage agreement was made on behalf of the P & the D by their
fathers.
Under the agreement, it was agreed that the dowry is Rs3000.
If there is any breach of the agreement by either party, the penalty is
Rs6000.
Subsequently, the D refused to perform the ctt.
P then brought an action for damages against the D for the breach of
promise of marriage.
The D pleaded that the ctt is not binding because at the time of the ctt,
the P was a minor.
It was held; the ctt was binding as the ctt of promise of marriage
entered into by minors is valid.

(iv)

Necessaries S69

1. Nash v Inman
Plaintiff : Nash
Defendant : Inman

P had supplied to the D clothing to the value of 145 pounds at a time when
the D was a Cambridge student.
The clothes were supplied included 11 fancy waistcoats.
P claimed for the payment from the D.
The D contended that at the time the clothes were supplied to him, he was
still a minor and that the clothes were not necessaries.
Furthermore, the Ds father had amply supplied him with proper clothes
according to his condition in life.
It was held that the clothes supplied to the D were not necessary to the
Ds requirement because the D was sufficiently supplied with suitable and
necessary clothes by his father.
Therefore, the D was not bound by the contract.

2. Govt of Malaysia v Gurcharan Singh

Plaintiff : Govt of Malaysia
Defendant : Gurcharan Singh

P sued the D for breach of contract.

The claim was for 11,500 pounds which was actually spent by the P in
educating the D.
At the time of the contract, the D was a minor.
It was held that the contract was void.
H/e since education was necessary, the defendant was liable for the
repayment of a reasonable sum spent on him.
The contract becomes valid due to necessaries.

INTENTION TO CREATE LEGAL RELATION

1) Business agreement Rose & Frank Co v Crompton Bros
The P and D entered an agreement for the supply of some carbonised
tissue paper.
Under the agreement the Ps were to be the Ds sole agents in the US until
March 1920.
The ctt contained an honourable pledge clause which stated the
agreement was not a formal or legal agreement and shall not be subject to
the jurisdiction of the courts in neither England nor the US.
The Ds terminated the agreement early and the P brought an action for
breach of ctt.
Held; the honourable pledge clause rebutted the presumption which
normally exists in commercial agreements that the parties intend to be
legally bound by their agreements.
The agreement therefore had no legal affect and was not enforceable by
the courts.

2) Social, domestic and family agreement Balfour v Balfour

Plaintiff : Balfour
Defendant : Balfour
D was a civil servant stationed in Sri Lanka.
He had promised to pay his wife a monthly allowance as maintenance.
His wife had to stay in England and unable to follow the D to Sri Lanka
because of her poor health.
Later the D failed to keep his promise and therefore the wife sued him for
breach of contract.
Court held; the Ds promise was not a legally binding and enforceable
contract because the agreemant was a family and domestic agreement

and therefore it is presumed that the parties did not intend the promise to
be legally binding contract.

UNCERTAINTY OF CONTRACT S30 Guthing v Lynn

Plaintiff : Guthing
Defendant : Lynn
D bought a horse from P under a term that if the horse brings good
fortune, D will pay another 5 pounds.
D broke his promise.
Held; the term bring good fortune is too vague. Thus the contract is void.

FREE CONSENT S10

S14 consent is said to be free if it is not caused by:
(a) Coercion S15

1. Kesarmal s/o Letchman v Valiappa Chettiar

Plaintiff : Kesarmanl s/o Letchman
Defendant : Valiappa Chettiar
A transer of property which was made under the orders of Sultan, issued in
the ominous presence of 2 Japanese officers during the Japanese
occupation of Malaysia was held to be not valid.
Because the consent given was not free and therefore the transfer became
voidable at the will of the party whose contract was so caused.

2. Chin Nam Bee Development Sdn Bhd v Tai Kim Choo

Plaintiff : Chin Nam Bee Development Sdn Bhd
Defendant : Tai Kim Choo
R purchased houses to be constructed by the A.
Each of the R had signed a contract to purchase a house at 29,500 pounds.

 H/e the Rs were forced later to pay an additional 4,000 pounds under a
threat by the A to cancel the Rs booking for their houses.
Court held; the payment was not voluntary but had been made under
threat. Thus, there was coercion in the agreement of paying the additional
4,000 pounds to the A.

Economic Duress Universe Tankships of Monrovia v International Transport

Workers Federation
The ITWF blacked a ship, The Universe Sentinel, to prevent it from leaving
port.
They made several demands in relation to pay and conditions and also
demanded the ship owners to pay a large sum of money to the Seafarers
International Welfare Fund.
The ship owners agreed in order that the ship could leave port and then
sought to recover the sum paid to the welfare fund.
Held; the money had been extracted under economic duress and could not
be recovered.

(b) Undue influence S16

1. Salwath Haneem v Hadjee Abdullah

Plaintiff : Salwath Haneem
Defendant : Hadjee Abdullah
Ps husband made a conveyance of property belonging to himself and the
P to his brother, B and C.
The P initially agreed to the conveyance the said property but after her
husbands death, she brought an action seeking to set aside the
agreement on the ground of undue influence.
Held; there was a confidential relationship existed between P and B and C.
Therefore, the burden of proof was on B & C to show the P was fully
understood to the agreement that made and the consent was freely given.
Since both B and C failed to discharge the burden, the said contract was
set aside.

2. Datuk Jaginder Singh & Ors v Tara Rajaratnam

Tara was the owner of one piece of land.

 Jaginder as the lawyer to Tara had used his position to influence Tara to
tranfer his land to the 3rd party.
Held; the consent was not freely given and the transfer become voidable
as it was caused by undue influence.

3. Chait Singh v Budin b. Abdullah

Plaintiff : Chait Singh
Defendant : Budin b. Abdullah
P is a sikh moneylender sued the D who was an illiterate Malay
agriculturist upon a pro-note.
The note provided for interest at the rate of 36%.
D has charged his land as security and the interest charged exceeded
18%.
The circumstance raises in the opinion of the court that the said
transaction was unconscionable.
The interest rate is too high for a loan with security.
It shows that the contract is advantageous to one party only.

(c) Fraud S17

Weber v Brown
Appellant : Weber
Respondent : Brown
R sued the A for false and fraudulent misrepresentation relating to the
number of rubber trees on an estate which the R purchased from the A.
The A relied on the Exception to S19 of the Contract Enactment 1899.
Court of Appeal held; the defense that the R had the means of discovering
the number of trees with ordinary diligence could not be set up because
the Exception to S19 does not apply to cases where misrepresentation was
made by a false and fraudulent statement.

His silence is, in itself, equivalent to speech Kheng Chwee Lian v Wong Tak
Thong

Plaintiff : Kheng Chwee Lian

Defendant : Wong Tak Thong
The D had bought half a share in a land that he then built a biscuit factoy.
Later he was induced by the P to to enter into a new agreement that made
him to let go his share on the land he built the factory in exchange for the
new land that in fact was smaller.
He alleged that the P had made a false representation in inducing him to
enter the contract.

(e) Mistake S21.22.23

S21 both parties are under mistake as to matter of fact, the agreement is void.
Raffles v Wichelhaus
P agreed to sell D 125 bales of Surat cotton to arrive via the ship called
The Peerless from Bombay.
D believed the shipment would arrive on the Peerless that are arrived from
Bombay in Oct.
H/e, P was unaware of such a ship, as P intended that the cotton would
arrive via The Peerless from Bombay in Dec.
When the December Peerless arrived with the cotton, P was ready and
willing to deliver the cotton to D but D refused to accept the cotton or pay
P for it.

S23 mistake by one party as to matter of fact not voidable.

Tamplin v James
A bidder made a bid at an auction for sale of a public house under a
mistaken belief that a certain field was included in the lot when in fact, it
was not.
The bid was a successful and a contract was concluded.
Held; the contract was valid.

Mistake as to document Subramaniam v Retnam

D had signed a written acknowledgement in the English language of a loan
when he was ignorant of the language.
Court applied the general rule that he is bound by what he signed, seeing
that there was no fraud/misrepresentation.

Awang b. Omar v Haji Omar & Anor

1st D was induced by 2nd D, his brother to sign a document a contract in
which the 2nd D guarantees the performance of contract.
1st D did not know English and was persuaded to sign in the mistaken
belief that he was merely witnessing his brothers signature.
Court held; there was a mistake as to the nature of the document signed
and the 1st D was not liable.

LAWFUL OBJECT/LEGALITY
S24 the consideration and object of an agreement is lawful, unless;
(a) Forbidden by a law Hee Cheng v Krishnan
Plaintiff : Hee Cheng
Defendant : Krishnan
P and D entered into an agreement for the sale and purchase of the Ps
house built upon a land in respect of which the D was the holder of a
temporary occupation license.
P claimed specific performance of the agreement or alternatively damages
for the Ds breach of contract.
Court held; the contract entered into was an attempt to sell and to
purchase the Ds rights under the Temporary Occupation License (TOL)

which is contrary to Rule 41 of the Land Rules 1930 which stated that no
license for the temporary occupation of State Land shall be tranferable.
As such the contract was unlawful as it is being of such nature to defeat
the provision of any law (S24 of Contract Act) and therefore is void.

(d) Court regards it as immoral or opposed to public policy Pearce v Brooks

Involves a contract of hire of vehicle for purposes of prostitution and in
general way, in the words of Lord Wright, those involving an immoral
promise, such as a promise between a man and a woman to live together
without being married, or to pay a sum of money or give some other
consideration in return for personal association.

DISCHARGE OF CONTRACT
a) By performance
Performance by 3rd party Chinn Swee Onn v Puchong Realty Sdn Bhd
Supreme Court held that the respondents, by accepting payments from a
3rd party, had impliedly accepted the performance by the 3rd party of the
Appellants obligation to pay his debt.
Therefore, based on S42, the respondents were precluded from enforcing
their claims against the appellant.

b) By agreement
i)
Remission Kerpa Singh v Bariam Singh

Discharge by Impossiblity Allowed

1. Destruction of the subject-matter
Taylor v Caldwell
A music hall was rented by the P from the D for a series of concert.
H/e the hall was accidentally burnt down before date of the concert.
It was held that the ctt was void due to the frustration.

Berney v Tronoh Mines

A ctt of employment was discharged by frustration on the outbreak of war
when Japan invaded Malaya.
Due to the invasion of Malaya by the Japanese Forces, the European staff
of the D company was evacuated from Tronoh, Tanjung Tuallang and other
places.
As a result of this, the P, one of the staff in the company, brought an action
against the D company for breach of ctt of service.

 Court held; the invasion of Malaya by the Japanese frustrated the

performance of the ctt.
Hence, there was no breach of ctt by the D.
The claim by the P was, therefore dismissed.

2. Supervening events defeat the whole purpose/object of the ctt Krell v

Henry
Henry hired a room for the sole purpose of watching the coronation
procession of King Edward VII.
H/e, owing to the Kings illness, the procession was cancelled.
It was held that Henry could be excused from paying the rent for the room
because the ctt was frustrated.

c) By breach S40