“CONTRACT” “CONTRACT”

ESTABLISHMENT: STATUS OF CONTRACTS: STATUS OF CONTRACTS:

# Valid #
Elements: [S 2 (h) Contract Act 1950] 1. Valid
- Offer
- Acceptance [S 2 (h) Contract Act 1950]
- Intention to Create LR 2. Void
IMPLICATIONS:
- Capacity to a Contract [S 2 (g) Contract Act 1950]
# Valid #
- Certainty [S 2 (h) Contract Act 1950:
- Consideration MEANING: “enforceable by law”
3. Voidable
- Consent (Mutuality) – parties have rights to sue & be sued] [S 2 (i) Contract Act 1950]

“CONTRACT” “CONTRACT”
STATUS OF CONTRACTS: STATUS OF CONTRACTS:
1. Valid
[S 2 (h) Contract Act 1950]
2. Void
Implications: [S 2 (g) Contract Act 1950]
 Parties have rights & obligations under the
contract. MEANING: “unenforceable by law”
 The contract has legal effects : MEANING: – parties have no rights to sue &
“enforceable by law” - parties have rights to
sue & be sued be sued
 E.g. normal contracts.

“CONTRACT” “CONTRACT”
STATUS OF CONTRACTS:
STATUS OF CONTRACTS:
2. Void
[S 2 (g) Contract Act 1950]
3. Voidable
Implications:
 Parties have NO rights & obligations under the [S 2 (i) Contract Act 1950] –
contract.
 The contract has NO effects from the very
MEANING: if it is caused by
beginning. COERCION/UNDUE
 E.g. A contract entered by a child (< 18 YO);
A contract of selling drugs in Malaysia.
INFLUENCE/FRAUD/
MISREPRESENTATION/MISTAKE
 “CONTRACT”
STATUS OF CONTRACTS:

3. Voidable
[S 2 (i) Contract Act 1950] –

Implications:
 The contract is valid and binding until the
party whose consent is so caused chooses to
withdraw it.
 If he chooses to proceed with the contract, he
must verify his consent as if it is free from the
very beginning.