CONFIDENTIAL LWIJAN 2018/LAW436/119 UNIVERSITI TEKNOLOGI MARA FINAL EXAMINATION COURSE LAW OF CONTRACT I COURSE CODE LAW436/119 EXAMINATION : JANUARY 2018 TIME 3 HOURS 15 MINUTES INSTRUCTIONS TO CANDIDATES 1 This question paper consists of two (2) parts: PART A (4 Questions) PART B (1 Question) 2 Answer any three (3) questions in PART A and the compulsory question in PART B in the Answer Booklet. Start each answer on a new page. 3 Candidates are allowed to bring in a copy of the Contracts Act 1950 (unannotated). 4, Do not bring any material into the examination room unless permission is given by the invigitator. 5 Please check to make sure that this examination pack consists of i) the Question Paper ii) an Answer Booklet — provided by the Faculty iil) a three ~ page Appendix 1 6 Answer ALL questions in English. DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO This examination paper consists of 4 printed pages {© Hak Cipta Universit Teknologl MARA CONFIDENTIALCONFIDENTIAL 2 LWIJAN 2018/LAW436/119 PARTA QUESTION 4 With reference to the provisions in the Contracts Act 1950 and decided cases, explain the elements required in an action for undue influence, including the burden of proof. In what circumstances would the person alleged to be ‘dominating the will’ of another be able to rebut that presumption. (20 marks) QUESTION 2 a) Ayra owes Fishies Financial Services (FFS) RM10,000. In the loan agreement, it was agreed that Ayra will re-pay the loan in full within 6 months. The six months period have lapsed and Ayra failed to complete the repayments. She received a letter of demand from (FFS) for the full payment of the loan, failing which they will take legal action. Ayra sent a cheque amounting to RM7,500 to FFS. In the accompanying letter, Ayra pleaded to FFS, stating that the amount of RM7,500 was the amount she could come up with and whether that amount could be accepted as a full settlement of her debt. FSS cashed the said cheque. After two weeks, Ayra received another letter of demand from FSS asking her to settle the balance of her loan which is RM2,500. With reference to statutory provisions and decided cases, discuss whether Ayra is obliged to pay the balance of the said loan. (10 marks) b) Simon, an owner of a company, hired Bala as a security guard for the company. There was a spate of robberies going on at the vicinity recently. Simon informed Bala that he will increase his salary to RMS50O if he is extra alert and becomes his bodyguard since he goes home late at night. Bala agreed, Simon was walking home one night when he was confronted by a group of men who wanted to rob him. He called out to Bala to rescue him. Bala rushed to the scene and drove off the assailants. Unfortunately, when Bala inquired about the salary increment of RM500, Simon refused to fulfil his promise. With reference to relevant authorities, advise Bala whether he can enforce the promise, (10 marks) (© Hak Cipta Universiti Teknologi MARA, CONFIDENTIAL,CONFIDENTIAL 3 LWIJAN 2018/LAW436/119 QUESTION 3 Generally, a minor has no capacity to enter into a contract. With reference to relevant authorities, discuss the validity of a contract entered into by a minor, the exceptions and the remedies available to the respective parties. (20 marks) QUESTION 4 Din is a graduate from UPM. His ambition is to operate his own plantation. Din is lucky to have a trust fund to his name and he plans to use the money to purchase a plantation. He recently saw an advertisement in a newspaper for the sale of a sugarcane plantation. Interested, Din went to negotiate the sale with the owner, Velo, After a few meetings, both parties agreed to the purchase price. Before signing the agreement, Din was made to believe that 500 tons of sugarcane was produced annually at the plantation. However, when Din examined the accounts of the plantation, it shows that only 400 tons of sugarcane was produced. Despite the facts discovered, Din still proceeded with the sale and signed the said agreement. Two weeks later, Din wants to terminate the agreement. Meanwhile, Din also wish to sell his father's car. On Monday, he proposed to Zizan that he would sell the car for RM15,000. Zizan was very pleased and assured Din that he was interested but he needs to consult his mother first. Din told Zizan that he assumed Zizan wants to purchase the car, unless he hears otherwise by Saturday. On Thursday, Zizan put a letter in the post addressed to Din informing him that he accepts Din's proposal to sell the car for RM15,000. On Friday, Din changed his mind and now wished to revoke his proposal to Zizan. He mailed a letter via express mail informing Zizan that he wished to withdraw his proposal to Zizan as he has managed to obtain a better offer for the car. Din received the letter from Zizan on Tuesday the following week. With reference to relevant authorities, advise Din: i) whether he can terminate the agreement with Velo ii) whether he is liable to sell the car to Zizan. (20 marks) (© Hak Cipta Universiti Teknologi MARA. CONFIDENTIALCONFIDENTIAL 4 LWIJAN 2018/LAW436/119 PARTB. QUESTION 1 Lam js in the construction business. He owns his own construction company but his company is not performing at its best. Recently, Lam went into negotiations with College RMT to construct two blocks of student hostel for their new campus in Kuala Terengganu. After reviewing Lam's proposals, College RMT sent him a letter accepting his proposal but subject to certain terms and conditions that will be incorporated in the agreement. In reliance to the letter, Lam proceeded to perform some preliminary works for the student hostel, although no formal agreement in writing had been executed. Subsequently, College RMT instructed Lam to cease all works, stating their intention to discontinue negotiations and any work done was entirely at Lam’s risk. Lam has incurred cost for the preliminary works. Lam and his wife, Audrey have mutually agreed to separate. They have been living separately for 4 years. Before moving out from their home, Lam executed an agreement in writing wherein he promised that during the separation period he would give Audrey a monthly maintenance allowance of RM1000. Lam has not been able to give Audrey the monthly allowance for the past two years. Being aware of his financial instability, Lam is afraid that his wife will sue him for the money. Meanwhile, Lam decided to venture into other businesses. He managed to obtain a loan and entered into an agreement to purchase two pieces of land totalling 8 acres in area at the purchase price of RM980,000 from Sulaiman. After paying a deposit of RM98,000 and executing the said sale and purchase agreement, Lam discovered that certain portions of the land were used by Tenaga Nasional Berhad for transmission cables. Lam argued that the purchase price ought to be reduced for the said encumbrances will restrict the usage of the lands. However, Sulaiman refused and claimed that he is unaware of the encrumbrances. Based on the above facts, advise Lam on the following matters: a) whether there is a valid contract between Lam and College RMT. b) College RMT's liability to compensate Lam for the cost incurred. ©) whether Audrey can enforce Lam's promise. d) Lam's right to rescind the sale and purchase agreement with Sulaiman and to claim his deposit (40 marks) END OF QUESTION PAPER (© Hak Cipta Universiti Teknologi MARA, CONFIDENTIALCONFIDENTIAL, APPENDIX 1(1) LWIJAN 2018/LAW436/119 CASE LIST A Abdul Rashid v Island Golf Properties Sdn Bhd [1989] 3 MLJ 376 Abduk Razak bin Datuk Abu Samah v Shah Alam Properties Sdn Bhd [1992]2 MLJ500 CA Aberfoyle Plantations Ltd v Khaw Bian Cheng [1960] MLJ47,PC. Adams v Linsell (1818) 1B & Ald 681 ‘Ayer Hitam Tin Dredging Malaysia Bhd v. YC Chin Enterprises Sdn Bhd (1994]3CLJ133 Allcard v Skinner (1887) 36 Ch D 145 ‘Ang Hiok Seng @Ang Yeok Seng v. Yim Yut Kiu [1997] 2MLJ 45 B Balfour v Balfour [1919] 2KB 571 Barton v. Armstrong [1975] 2WWLR 1050 Bisset v. Wilkinson [1927] AC177 Boustead Trading Sdn Bhv. Arab-Malaysian Merchant Bank Bhd [1995] 3 MLJ 331.FC. c Carli v Carbolic Smoke Ball [1892] 20B 484 Chapple v. Cooper 13 M &W 252 Chemsource (M) Sdn Bhd v. Udanis bin Mohamed Nor [2002]6MLJ273 Choo Tiong Hin & Ors v. Choo Hock Swe (1959) 25 MLJ67 CA Chuah Tong Yeong v. Kuala LumpurGolf & Country Club [2003] 6 MLJ577 [2003] 7¢LJ180 Collins v Godefroy (1831) Currie v Misa (1875) Couturier v Hastie (1850) SHLC 673 Chan Yoke Lain v Pacific & Orient Insurance Co Sdn Bhd [1997] Central London Property Trust v. High Trees House [1947] 1KB130 Chop Ngoh Seng v. Esmail & Ahmad Bros [1948-1949] supp MLJ 93 Chin Nam Bee Development Sdn Bhd v. Tai Kim Choo & Ors [1998] 2MLJ 117 D Datuk Jagindar Singh & Ors v Tara Rajaratnam [1986] 1MLJ 105, PC Derry & Ors v. Peek (1889) De Francesco v. Barnum (1890) 45 Ch D 430 Double Acres Sdn Bhd v.Tiara Setia Sdn Bhd [2001]1 AMR 111 E Eckhardt Marine GMBH v. Sheriff, High Court of Malaya, Seremban & Ors [1974] 2MLJ 114 F Felthouse v. Bindley (1862) Fisher v Bell[1961] 1 QB 394 G Government of Malaysia v Gurcharan Singh & Ors [1971] 1 MLJ 211 (© Hak Cipta Universiti Teknologi MARA CONFIDENTIALCONFIDENTIAL ‘APPENDIX 4(2) LWJAN 2018/LAW436/119 H Hoddinott v Hoddinott (1955) 3 All ER 10 Heslop v Bums [1974] 1241, CA Hyde v. Wrench J JM Wotherspoon & Co Ltd v Henry Agency House[1962] 1MLJ86 K Karuppannan Chellapan v. Chong Lee Chin [2000] 7 CLJ 265 Kheng Chwee Lian v. Wong Tak Thong [1983] Kepong Prospecting Ltd & Ors v. Schmidt [1968]1 MLJ 170, PC L Lim Kim Hua V Ho Chui Lan & Anor [1995] 3MLJ165 Low Kon Fatt v. Part Klang Golf Resort (M) Sdn Bhd [1998] 6MLJ448 Lee Chin KOK v, Jasmin Arunthuthu Allegakoen & Ors[2000] 4MLJ 481 Leha binte Jusoh v Awang Johari Bin Hashim[1978] 1 MLJ202, FC M Malayan Flour Mills Bhd v. Saw Eng Chee [2001]3MLJ69 Mui Plaza Sdn Bhd v. Hong Leong Bank Bhd & Ors [1998] 7 MLJ 122 Merritt v Merritt (1970]1WLR1211 Mohori Bibee v Dharmodas Ghose [1903] 1 LR 30 Cal 539 N Nash v Inman [1908] 2 KB 1 Pp Partridge v. Crittenden [1968] 1 WLR1204 Phang Swee Kim v. Beh | Hock [1964]MLJ 383, FC Pharmaceutical Society of Great Britain v. Boots Cash Chemist [1953]1 QB401, CA Preston Corporation Sdn Bhd v. Edward Leong & Ors (1982]2 MLJ 22, FC Pettitt v Pettitt [1969]2 All ER385, HL R R v Clarke (1927) 40 CLR 227 Ramsgate Victoria Hotel v. Montefiore (1866) LR 1 Exch 109 Rose & Frank Co v JR Crompton & Bros [1925]AC455, Ryder v Wombwell (1968) LR 4 ex 32 Roberts v Gray [1913] 1KB 520, CA s ‘Sim Thong Reality Sdn Bhd v. The Kim Dar @ Tee Kim[2003] 3 MLJ 460 CA ‘Simpkins v Pays (1955) 3 All ER 10 Stilk v. Myrick [1809] 2 Camp 317 Sheikh Brothers Ltd v Ochsner & Anor (1957]AC136, PC Stevenson, Jaques & Co v. Mc Lean( 1879- 1880)5 QBD 346 ‘© Hak Cipta Universiti Toknologi MARA, CONFIDENTIALCONFIDENTIAL APPENDIX 1(3) LWAN 2018/LAW436/119 ig Tan Soh Sim V Tan Saw Keow [1951] 1MLJ 16. FC Tay Tho Bok & Anor v. Segar Oil Palm Estate Sdn Bhd [1996] 3MLJ 181 Taylor v. Johnson (1983) 15 CLR 422 u United Asian Bank Berhad v Chun Chai Chai [1988]2 CLJ39 w Wong Hon Leong David v. Noorazamn bin Adnan [1995]3MLJ283, CA Wei Tah Construction (B) Co Sdn Bhd & Anor v. Law Wun Ing [1981] 2 MLJ 157 (© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL,