SECTION B

1. Ali, the neighbour of Badrul, hearing cries for help from Badrul's home, jumped over the
fence and saw Badrul's son, Effendi, struggling in the swimming pool of the house. He
quickly jumped into the water and saved Effendi from drowning.

When Badrul returned home and heard how A1i had saved Effendi's life, Badrul promised Ali
a reward of RM5,000. However, to date Badrul has not fulfilled his promise.

Ali wishes to sue Badrul for breach of contract. Advise him on the following;

a) Define consideration? [1 mark]

b) Are there any exceptions to the general rule of consideration? [3 marks]

c) Would Ali be successful in his claim? [2 mark]

[Total :6 marks]

2. On 3 March 2018, Azman wrote to Benny offering to sell to Benny his yacht, Lightning, for
RM1 million. The letter expressly stated that if Benny did not reply by 10 March 2018, he
would be deemed to have accepted the offer.

On 9 March 2018, Azman sent a letter to Benny revoking his offer. On 10 March 2018 Benny
posted a letter to Azman accepting Azman’s offer. Azman’s letter of revocation reached
Benny on 11 March 2018. Benny’s letter of acceptance reached Azman on 12 March 2018.

Benny wishes to know whether there is a valid contract between him and Azman for the sale
and purchase of the yacht, Lightning.

Advise Benny under the law of contract on the following issues:

a) Define an offer, acceptance under the Contracts Act 1950? [2 marks]

b) Would mental acceptance be effective in the above case? [2 marks]

b) Is there a binding contract between the contracting parties? [2 marks]

Total: [6 marks]

3. Samy entered into a sale and purchase agreement with a housing developer, ‘Superhomes
Sdn Bhd’, for the purchase of a medium cost apartment (to be built by the developer), for a
consideration of RM90,000. He paid an initial deposit of RM9,000.

Later however, the developer was unable to construct the apartment at that price due to an
increase in the cost of bricks and cement. He therefore required each purchaser for an
additional RM5,000 failing which he would forfeit their deposit and abandon the project.
Fearing the loss of his deposit, Samy agreed to pay the additional amount of RM5,000. Now
however, he feels that it was unfair of the developer to demand the additional amount and
does not wish to pay the developer.

Advise him on the following issues:

a) Must Samy pay the additional amount; is there any area of law that could assist him? Discuss
the relevant area of law and the effect of it? [4
marks]
b) Does the developer’s excuse that he was ‘unable to construct the apartment at that price
due to an increase in the cost of bricks and cement’ be justified in law? [2
marks]

Total [6 marks]

4. In relation to the law of contract:

(a) Explain the remedy of specific performance ; [2

marks]

(b) State two circumstances in which the court may grant specific performance of a contract;
and

(2 marks)

(c) State two circumstances in which the court may NOT grant specific performance of a
contract.

(2 marks)

[Total 6 marks]

5. In January 2019, Amy started a business as an independent website designer.

To give her a start in her career, her brother Ben, who ran a retail business, said he would
give her RM1000 if she updated his business website. However, by the time Amy had
completed the two projects her design business had become a huge success and she had
lots of other clients. When Ben discovered how successful Amy’s business had become, he
felt that he should not be asked to pay for the work done for him. Ben said he would not pay
anything as he had only offered the work to help his sister out.

Required:

(a) State the presumptions that are applied in relation to parties’ intentions to create legal
relations.

(2 marks)

(b) Explain whether Amy can insist that Ben pays the full amount of his initial promise.

(4 marks)

(Total: 6 marks)