Running head: BUSINESS LAW 1

Business Law

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Business Law

1. In a negligence action, the plaintiff must prove that the accused:

 Owed him a duty

 Breached the duty

 Made him suffer damages

2. A valid contract must have:

 An offer from one party

 An acceptance by the other party

3. Three types of remedies for the buyer against the seller in case the seller breaches the

sales of goods contract are:

 Specific performance

 Damages for non-delivery

 Remedy for breach of warranty

4. The rights of Sheila as a hirer (s9 to s15 HP Act 1967)

 Obtaining any information

 Obtaining a copy of the HP agreement.

 Requesting a statement of the balance.

 Continuing hiring

 Settling the full amount before the agreed date

 Terminating the agreement

5. A collective agreement is a deal between the employer and the union showing the terms

and conditions of employment.

6. Sources of written law in Malaysia

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 Federal and state constitutions

 Legislation

 Subsidiary legislation

7. Condition is the arrangement that must be there during the sale while a warranty is a

written guarantee that the seller uses to commit himself to the buyer about repairs or

replacement (s12(2),(3) SOGA 1957).

8. Defenses under Defamation Act 1957

 Justification by evidence

 Fair comment

 Absolute privilege

9. According to s14 of the Contracts Act 1950, situations with no free consent include the

ones caused by:

 Fraud

 Coercion

 Undue influence

10. Implied terms under SOGA 1957

 The seller has a right to sell

 The buyer to enjoy possession of what is purchased

 What is sold cannot be legally claimed by a third party

11. The seller can only repossess goods if the hirer has defaulted on two successive payments

[s16(1) HP Act]. He must first submit a 21-days’ notice of repossession.

The implied terms under the HP Act (s7)

 The right of the owner to sell the goods at the right time.
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 All good must be of merchantable quality.

 The goods must be reasonably fit for the intended purpose.

 The hirer must enjoy the quiet possession of the goods.

12. “Consideration need not be adequate but must be sufficient” means consideration must

have the values necessary to meet the agreement’s return (Koay, Khanum & Mohd,

2008). If the other party agrees to the exchange, it becomes adequate; though it is not a

must that they agree.

13. Duties of an employer to the employees

 Keeping records of the workers’ information

 Providing the terms of the employment service

 Allowing the employees to register, establish or participate in trade unions

 Serving sufficient notice

14. Judicial precedent

Advantages:

 Consistency – Similar cases are treated like the previous ones

 Predictability – Easy to know the outcome of a case

 Flexibility – Enables to judges to update the law

 New precedent – Judges can make rules for the case and make it serve as a

precedent for future cases.

Disadvantages:

 Complexity – Similar previous cases with different judgments may be confusing.

 Uncertainty – The result of the case may not be clear until the final judgment.
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 Rigidity – Some rules can still be used even if they are outdated.

 Retrospective effect – Some decisions can be made unfairly.

15. Elements of a contract

 Offer – A legal suggestion by one party to the other

 Acceptance – The offeree must agree to the proposal

 Consideration – The value given to another person in return for the promise

 All agreements must have an intention to create legal relations.

 Certainty – All parties must know what is contained in the contract

 All parties must have the capability to form an agreement.

16. Nemo dat rule means one cannot give out what he does not have. Its exceptions include:

 Estoppel [s27(1) SOGA]

 Sale by a joint owner

 Sale by a buyer who is in possession of the goods

17. Characteristics of a partnership:

 Persons

 “Carrying on business”

 “in common”

 “view of profit”

18. ‘Capacity to contract’ refers to the capability of parties to form a legal agreement.

19. The issue is whether Mike’s widow can recover the sum promised to Mike incase he

completed the voyage.

According to the Contracts Act 1950, Paul and Mike formed an agreement where they

agreed he would only get the pay in case he sailed from Penang to Auckland. However,
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they did not agree that Paul will compensate him for any loss. Therefore, Mike’s widow

cannot recover the money because Mike did not complete the voyage as agreed.

20. The issue is whether Apple can claim the $50,000 extra amount that Mango got from

selling her boutique.

Section 38(1) of the Contracts Act provides that is complete performance when the

parties perform their obligations exactly as agreed. The contract then becomes

discharged.

Therefore, Apple cannot do anything about it because Mango gave her the money

according to the agreement and the contract was discharged.

21. The issue is whether Meena can sue her boss for dismissing her from work without notice

and without reason.

From section 11 to 14 of the Employment Act, the employer has no right to terminate an

employee except in situations when there is a reasonable and just cause.

Therefore, Meena has a right to sue her boss because it is against the Employment Law

for an employer to dismiss the employee whenever he pleases (Koay, Khanum & Mohd,

2008).

22. The issue is whether Chee Seng can sue Mohan for breach of Contract alleging he had

accepted his initial offer to purchase the Persian cat at $3000.

There is a difference between an acceptance and a counter proposal. Chee Sang wrote his

first letter with a counter proposal saying he was willing to purchase the cat at $2000. In

case a person gives a counter-proposal to the proposer, the original proposal gets

terminated (Hyde v. Wrench). As a result, the offeree cannot accept the original proposal

again because it does not exist anymore.

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Therefore, Chee Seng cannot sue Mohan for breach of contract because Mohan’s

proposal lapsed when Chee first replied showing he does not accept the proposal.

23. The issue is whether it is legal or not for PP Bank to immediately repossess its car

following two successive defaults of instalments.

According to subsection 16(1) of the Hire-Purchase Act 1967, the seller must provide a

written notice of repossession of at least 21 days to the hirer only if the hirer has

defaulted on two successive installments or in the last payment.

Therefore, it is illegal for PP Bank to repossess the car without notice (Koay, Khanum &

Mohd, 2008).

24. The issue is the buyer who gets a better title.

According to section 30(1) of the Sales of Goods Act, the second buyer who acts in good

faith and purchases the same goods without notice that it had been sold to another buyer,

gains a better title.

Therefore, the second buyer gets a better title because he purchased the clock in good

faith and he was not aware of the first sale to Peter.

25. The issue is whether Smith can sue Steve on 22 May for breach of contract being that

Steve had promised Smith to commence his duty as a courier for Malaysian travel on 1

June but changed his mind on 11 May before the date of commencement.

Section 40 of the Contracts Act provides that incase one party fails to fulfill the promise

according to the contract; the other party can decide to end the contract or continue with

it and claim for the damages caused.

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Smith can therefore continue with the contract and claim damages for not working as a

courier. Date of performance will not apply because already Steve has breached the

contract and is expected to pay for the damages caused to Smith.

26. According to section 28 of SOGA, if one of the joint owners sells a good without the

knowledge that he is not allowed to sell it, the buyer will still get a good title if he acted

in good faith. Thus, Soo Lee is the true owner of the watch because he purchased it in

good faith without the knowledge that Mehinder had purchased it first.

27. The issue is whether Menon can recover his rent from Nair since he was no longer going

to use the room because the King was no longer attending the coronation procession

because he fell sick.

The Contracts Act 1950 clearly puts it that when a contract becomes void, it cannot be

enforced.

Therefore, under s66 and s57(2) of the Act, Menon can recover the rent by raising the

defense of impossibility or frustration (Koay, Khanum & Mohd, 2008).

28. Section 38(1) indicates that there is complete performance when both parties perform

their duties as agreed in the contract (s38(1) Contracts Act). Therefore, Ranjit cannot do

anything because John did as they agreed.

29. According to the law, there must be communication of acceptance to the proposer.

(section 4(2) of the Contracts Act). With regards to the postal rule in section 4(b), the

communication of acceptance will only be complete when the accepting party posts the

letter or when the proposer receives the letter.

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Therefore, Ahmad can compel Ali to sell him the car because he had already accepted the

offer and formed a contract. Ali’s refusal to sell the car to him will be a breach of

contract.
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References

Contracts Act 1950

Defamation Act 1957

Employment Act 1955

Hire Purchase Act 1967

Koay A., Khanum Z. & Mohd C. N. (2008). Business Law. Wawasan Open University.

Sales of Goods Act 1957 (SOGA)