2.

Based on (Duhaimes Law Dictionary), a company is a legal entity,

allowed by legislation, which permits a group of people, as shareholders, to apply to

the government for an independent organization to be created, which can then focus

on pursuing set objectives, and empowered with legal rights which are usually only

reserved for individuals, such as to sue and be sued, own property, hire employees or

loan and borrow money. Besides that, according to (DPHU.ORG), a company is liable

for its own debts. This means that the shareholders are not liable for the debs and

liabilities of the company and cannot be sued by the companys creditors. A

shareholder can be a debtor or creditor of the company and can sue or be sued by the

company. Thus, Niki should sue Sashas company being Comfort Sdn. Bhd., and not

the person which is Sasha as Sasha has incorporated her business into a company.

Only after a year that the incorporation took place that Sasha borrowed money from

Niki.

According to Companies Act 1965, Section 16(5), on and from the date

of incorporation specified in the certificate of incorporation but subject to this Act, the

subscribers to the memorandum together with such other persons as may from time

become members of the company shall be a body corporate by the name contained in

the memorandum capable forthwith of exercising all the functions of an incorporated

company and of suing and being sued and having perpetual succession and a common

seal with power to hold land but with such liability on the part of the members

contribute to the assets of the company in the event of its being wound up as is

provided by this Act.

 Based on the effect of the corporation mentioned above, once a company

is incorporated by complying with the prescribed procedure, it comes into being and

is a separate legal entity from its members and officers. But only the company as a

separate person is responsible for the debts incurred in carrying on its business. It will

be qualified to sue or being sued by others for any wrongs committed against it. Based

on the case, given the situation that Comfort Sdn. Bhd. has financial difficulties and is

unable to pay back its debts, the company may go bankrupt or in another words,

insolvent. Even when Comfort Sdn. Bhd. goes insolvent, Niki can demand back what

she had borrowed to Sasha s company.

This scenario is best described in the case of Salomon v Salomon & Co

Ltd (1897). In this case Mr. Salomon established a company where he was the

managing director and owned about 95% shares in the company. The business was

not successful and the company was wound up. The liabilities of the company

exceeded its assets. A liquidator was appointed for the company. The liquidator stated

that Mr. Salomon was the sole owner of the company and he himself conducted all the

businesses of the company. So, he will be personally liable to pay all the debts to the

creditors of the company. The court held that in this case, the company is a legal

person distinct and separate from the members of the company and therefore only the

company will be liable for its debts.

In addition, in the case of Lee v. Lees Air Farming Ltd, Mr. Lee was

the governing director of his company and a pilot of the aeroplane of the company. He

was killed while he was piloting the aeroplane for the company. The issue was
whether he was a worker in the company. The Court held that he was a worker (an

employee) of the company, because the company could appoint its employees as it

enjoyed the status of a legal entity which is considered as distinct and separate from

its members and directors.

In conclusion, Niki could sue Sashas company and not Sasha herself in

court with the right legal procedures as clearly mentioned in the Company Act 1965.

Niki can definitely claim back the money she borrowed to Sasha for her company,

Comfort Sdn. Bhd. given that she follow the right procedures.

3. According to the Sale of Goods Act 1957, the buyer means a person

who buys or agrees to buy goods, and seller means a person who sells or agrees to

sell goods. In the case mentioned, Ahmad is the buyer and Bakar is the seller of

the second-hand reaping machine. To add on, Sale of Goods Act 1957 also defines

goods as every kind of movable property other than actionable claims and money;

and includes stocks and shares, growing crops, grass and things attached to or forming

part of the land which are agreed to be severed before sale or under the contract of

sale. Since there is a transaction of a sale of goods between two parties, Ahmad as the

buyer and Bakar as the seller, there is a contract of sale between the both of them.

Based on Section 4(1) of the Sale of Goods Act 1957, a contract of sale of goods is a

contract whereby the seller transfers or agrees to transfer the property in goods to the

buyer for a price. To add on, Section 5(2) of the Sale of Goods Act 1957 states that a
contract of sale may be made writing or by word of mouth, or partly in writing and

partly by word of mouth or may be implied from the conduct of the parties. This

means that should there be any breach to the contract of sale between Ahmad and

Bakar, both parties have the legal rights to claim for compensation.

According to Section 15 of the Sale of Goods Act 1957, which deals

with sale of goods on description, states that where there is a contract for the sale of

goods by description there is an implied condition that the goods shall correspond

with the description; and, if the sale is by sample as well as by description, it is not

sufficient that the bulk of the goods corresponds with the sample if the goods do not

also correspond with the description. This best describe the situation where, Ahmad

purchased a second-hand reaping machine from Bakar, without having to see it and

Bakar the seller had describe it as new the previous year and used it to cut only 60 or

70 acres, but in reality the machine is very old. In addition, Section 16 (1)(b) of the

Sale of Goods Act 1957 states that where goods are bought by description from a

seller who deals in goods of that description, whether he is the manufacturer or the

producer, there is an implied condition that the goods shall be of merchantable quality,

provided that if the buyer has examined the goods, there shall be no implied condition

as regards defects which such examined ought to have revealed. Thus, Ahmad can

seek legal compensation from Bakar since the sale of the reaping machine is only

made by description and it is not of merchantable quality and does not related with the

sellers description at all.

 There is a similar case that can be related to the situation between

Ahmad and Bakar, which is the case of Varley v Whipp (1900) 1 QB 513. In this

case, the defendant agreed to buy a second-hand reaping machine then owned by a

third party, which the defendant had never seen, but which the plaintiff seller stated to

have been new the previous year and very little used. On discovering that the

machine did not comply with this description, the defendant returned the reaper to the

plaintiff. The court held that this is a sale by description, the machine did not

correspond to its description and therefore, the seller was in breach.

Furthermore, there is also a case that relates to Ahmad and Bakar, which is

Harlingdon & Leinster Enterprises Ltd v Christopher Hull Fine Art Ltd [1991] 1

QB 564 the sale of a painting, attributed to a German expressionist, from one art

dealer to another was held not be a sale by description as the description was not so

essential as to become a term since the buyer did not rely on the description. The

requirement of reliance on the description may be of greater importance in sales of

unique objects than in ordinary consumer sales.

In conclusion, with no doubt I will advise Ahmad to sue Bakar under

Section 15 of the Sale of Goods Act 1957 given that Ahmad goes through the right

legal proceedings.
1. Public Law is the law governing the relationship between individuals and

the state. There are two categories in public law which is constitutional law and

criminal law. Constitutional law deals with rights of individuals in the state while

criminal law deals with offences committed by individuals against the state such as

murder, cheating and forgery. As for constitutional law under public law, the

relevant case study is:

Case: R Rethana v The Government of Malaysia & ANOR [1988] 1 MLJ 133

Facts: The plaintiff sought declarations to the effect that sections 31 & 43 of the

Employees Social Security Act 1969 (SOCSO) were ultra vires the Federal

Constitution. The plaintiffs contention was that these sections violated Article 8(1) of

the Federal Constitution which provided for equal protection of the law for all persons

and for equality for all persons before tje law. The two sections of SOCSO were

discriminatory because employees, in industries covered by SOCSO, were precluded

from suing their employees under the common law for damages arising from injuries

sustained in the course of employment.

Held: The court dismissed the plaintiffs claim as the classification by SOCSO was

fair and reasonable and therefore did not offend Article 8(1) and therefore was not

void under Article 4(1)

 Private law or also known as as civil law is matters that affect the rights and

duties of individuals amongst themselves. It covers contract, tort and trust.

Contracts are based on agreements. The law of contract is the branch of private law

which determines when a set of promise is legally enforceable. Few of the examples

are must be an offer, must have acceptance, both parties making the contract must

have capacity to contact, no mistake, misinterpretation or undue influence, must be

lawful, both parties must intend to enter into legal relations and also must have

consideration. Tort is based on legal obligation and it is a civil wrong. It is also the

breach of a general duty imposed by law and do not have contract between parties. A

person whose legal right is infringed may sue the wrongdoer and may be granted

remedies such as liquidated damages. Trust is an equitable obligations. It binds a

person [trustee] who deals with property over which he has control [the trust property]

for the benefit of persons [beneficiaries] He may himself be one of the beneficiaries

and may enforce the obligations.

As for tort law case under private law, the relevant case study is

Case: AC Billings & Sons LTD v Rodem

Facts: the defendant contractors blocked the usual approach to the building on which

they were working and advised people that the entrance to the building should be

made through an adjoining property. The plaintiff was injured when she fell through a

hole on the adjoining property while using the right of way at night. The issues was

whether there was a duty on the contractor to ensure that there was safe access to and

from the site?

Held: Although the contractor had no right to interfere with the adjacent property,

there was a duty to provide a reasonably safe approach. Therefore, he could be held

liable to a person seeking to enter or leave the building if, as here, the person is forced

into the danger on an adjoining property.

References

http://www.duhaime.org/LegalDictionary/C/Company.aspx) (Duhaimes Law

Dictionary

http://www.dphu.org/uploads/attachements/books/books_3955_0.pdf

Table of contents
Details Page

Question 1 1-3

Question 2 4-6

Question 3 6-8

References 9