C5 Void agreements

5.1 Void s.2(h)

S.2(h) provides that a void agreement is not enforceable by law.
Void agreement 不 enforceable by law 所以也不是 contract.

(h) an agreement enforceable by law is a contract

可以被 law enforce 的 agreement 才是 contract

5.2 What agreements are void.

Agreement are void where
A. The consideration or object is unlawful: s.24
Consideration/object 是非法的

B. The considerations and objects are unlawful in part s.25

部分的 consideration/object 是非法的

C. There is no consideration: s.26.

Note the section goes on to provide certain exceptions.
For example, in illustration (a) to s.26, A promises, for no consideration, to give to B RM1000/- The agreement is void.
没有给 consideration 那么也是 void 的
但是是有 exception

D. There is restraint of marriage (other than a minor during his or her minority): s.27
阻止婚姻的就是 void
除非是 minor 就不是 void@@

E. There is a restraint of trade : s.28

阻止别人做生意

F. There is a restraint of legal proceedings : s.29

In Asia Commercial Finance (M) Bhd v Leong Chong Shin 1997, the court held that the agreement to withhold proceedings
was void under s.29.
阻止别人提出诉讼

G. There is uncertainty in the agreement: s.30.

Agreement 里面有不肯定性也是 void 的

illustration (a) to s.30

A agrees to sell to B “100 tons of oil”. The agreement is void for uncertainty as there is nothing to show that kind of oil
was intended.
没有写是什么种类的油所以 uncertainty 所以 void

illustration (c) to s.30

A, who is a dealer in coconut oil only, agrees to sell B “100tons of oil”. The nature of A’s trade gives the meaning of the
words and A has entered into contract for the sale of 100tons of coconut oil.
A 是只卖椰油的
同意 sell B 100 吨的油
因为 A 的做生意的 nature----> 只卖椰油
所以虽然没有说什么油 但是也是没有 uncertainty 的 因为你都是只卖椰油

H. There are made by way of merger: s.31.

The expectation is where there are certain prizes for horse-racing.
用 merger 的方式来弄的合约
除非是有特定的奖品给赛马@@ **
I. There is a contract by minors: Mohori Bibee v Dhurmodas Ghose 1903
小孩子的合约就是 void 的

J. There are strangers to an agreement: Badiaddin bin Mohd Mahiin & Anor v Arab Malaysian Finance Bhd 1998. This
follows the English Law on privity of contract.

如果你不是 contract 的 party@@ 那么就是 void 因为你是 stranger

这个是跟着 uk 的 privity concept

5.3 Relief or effect of void agreement: s.66 [general for all type of void agreement]
S.66 provides that when agreement is discovered to be void, any person who has received any advantage must restore it or
make compensation for it
如果被发现 void 的 agreement 任何人收到了好处都要 restore 或者做 compensation
不管你是 innocent party 还是 guilty party

Indian case of Harnath Kaur v Inda Bahadar Singh 1922

the Privy Council held that the agreement discovered to be void must be at its inception I.e, it is void ab initio.
如果是 void 就是 void ab initio 像什么都没有发生过 合约从来就没有存在过

Innocent party 一定要 Good faith; 然后就可以 restore

This was endorsed in the Malaysian case of Public Finance Bhd v Ehwan bin Saring 1996. When the agreement is void, there
is restitution under s.66 but the innocent party must go to court in good faith.
如果 agreement 是 void 那么就是 court 会给 remedy 是 restitution 回到原点一样
但是前提就是 innocent party 也是要 act in good faith 的来 court
Innocent party 如果耍什么诈可能就不可以了

Ng Siew San v Menaka (FC) 1973

the Federal court held that s.66 is only applicable where the parties were not aware of the illegality at the time the
contract was made. Ie: not in pari delicto
parties 一定要是不知道有 illegality
Pari delicto= 两个人都知道有错 然后不可以 claim damages
Not in pari delicto 意思= invoke s.66 不能是 pari delicto 的情况 就是双方都知道自己有错

Menaka v Lum Kam Choon 1973

there was no license in money lending business and both parties did not know of the illegal contract. The house held that
s.66 could be invoked where the parties had to restore any advantage received.
两个人都不知道是 illegal contract
Held: s.66 invoked 然后 parties 要还回去收到的好处

However, in Hashim Aduan, where both parties knew there was no license to extract timber, the court held that s.66 could
not be invoked.
双方都知道是非法的 那么就不可以用 s.66 才来怪是 void 的
有 mistake 就会 void.
5.4 Mistake s.21-23
At common law, mistake has been divided into 3 categories:
A. Common mistake-where both parties to the contract make a mistake as to a fact which is fundamental to the agreement.
For example the horse, which was the subject matter of the agreement, was already dead at the time the contract was
entered into but the parties were unaware of this.
当合约的双方都做错东西 as to fact 然后是对合约很重要的东西
比如 horse 是 agreement 的 subject matter
已经在签约的时候就已经死了
就是签约的时候 已经没有 subject matter 了
双方都不知道
那么就是 common mistake.

B. Mutual mistake- where the parties misunderstand each other and are at cross purposes.
For example- A agrees to sell his house in Bangsar to B, A wants to sell his house on Jalan Bukit Pantai but B thinks he is
referring to his on Jalan Taman Pantai.
双方误会对方 一人以为一个 purpose
比如 A 同意卖屋子给 B
A 要卖的是那间
B 以为是另外一间
互相误会了的 叫做 mutual mistake

C. Unilateral mistake-where only one of the parties has made a mistake.

For example, A agrees to buy a painting which he believes to be paintings is not by Michael Angelo. There is no
misrepresentation by B. It turns out that the painting is not by Michael Angelo. The agreement is not voidable or void.
只有一方弄到 Mistake
比如 A 同意买一幅画 他相信不是米开朗基多画的
那么 B 就没有 misrep 因为 A 都是本来就不相信
@@ 不会 void 或者 voidable

5.4.1 Mistakes made by both parties.

1. S.21 oF the CA 1950 provides that when both the parties to an agreement are under a mistake as to a matter of fact
essential to the agreement, the agreement is void. A void agreement is not enforceable by law.
双方都弄错 agreement 的 essential term.
agreement 就是 void. X enforceable

criteria
2. For the mistake to render the contract void;
A. It must be made by both parties and
B. It must be on a matter of fact essential to the agreement,

Criteria:
你要说 contract 被 mistake 弄到 void
一定要 1 两个人做的 2 一定要是 essential fact.
Agreement void where both parties are under mistake as to
matter of fact
21. Where both the parties to an agreement are under a mistake as
to a matter of fact essential to the agreement, the agreement is void.

Explanation—An erroneous opinion as to the value of the thing which forms

the subject-matter of the agreement is not to be deemed a mistake as to a matter
of fact.
错误的 opinion 对于一个东西的 value
是不算 mistake as to matter of fact 的
Opinion of the value 是不算 matter of fact 的

ILLUSTRATIONS
(a) A agrees to sell B a specific cargo of goods supposed to be on its way
from England to Kelang. It turns out that, before the day of the bargain, the ship
conveying the cargo had been cast away and the goods lost. Neither party was
aware of the facts. The agreement is void.

A 同意卖 B 特定的 goods

从英国到 Klang
结果当天 船 cast away 了.东西不见了
两房都不知道东西不见了
这个 agreement 是 void 的

(b) A agrees to buy from B a certain horse. It turns out that the horse was
dead at the time of the bargain, though neither party was aware of the fact. The
agreement is void.
A 同意跟 B 卖特定的马
在 bargain 的时候 马死掉了
两个 party 都不知道马死掉了
这个 agreement 是 void 的

(c) A, being entitled to an estate for the life of B, agrees to sell it to C. B was
dead at the time of the agreement, but both parties were ignorant of the fact. The
agreement is void.
A being
A 是可以拿到 estate 的 如果 B 去世了 可是 A 卖给 C @@ [这个我没有很确定]
B 死了在签约的时候
但是双发都不知道 所以 agreement 是 void

Criteria 2 ---> essential

Sheikh Brothers Ltd v Ochsner 1957
PC held: the mistake as to matter of fact must be essential to the agreement.
mistake 一定要是 agreement 的最重点才可以 essential

Criteria 2 ---> 这些算是 Mistake of fact

5. A mistake of fact made by both parties to the agreement be:
A. A mistake as to the existence of the subject matter of the contract.
B. A mistake as to the identity of the subject matter
C. A mistake as to the quality of the subject matter.
D. A mistake as to the possibility of performing the contract.

这些算是 mistake of fact: 【下面是更详细的】

1. 双方不知道/弄错 subject matter of the contract 都不存在了
2. 弄错 subject matter 的 identity
3. 弄错 subject matter 的 quality
4. 没有可能 perform contract 的可能性. 基本不可行 但是双方弄错了 不知道 所以会 void

5.4.1.1 A mistake as to the existence of the subject matter.

1. Applies where unknown to both parties, the subject matter of the contract had ceased to exist or has never been in
existence at all the time of the contract. The 3 illustrations in s.21 are clear examples of this. The existence of the
subject matter of the contract would be a matter of fact essential to the agreement.

Subject matter 已经不存在了或者根本没有存在过

5.4.1.2 A mistake as to the identity of the subject matter

1. Arises where one party intends to deal with one thing and the other with a different thing.
For example-A agrees to sell his house in Bangsar to B, B wants to sell his house on Jalan Bukit Pantai but B thinks he is
referring to his house on Jalan Taman Pantai. Here both parties made a mistake as to the identity of the subject matter
of the contract. S.21 may also apply here to make the contract void as the party never really reached an agreement.

一方要 deal with 1 个东西 然后另外 1 方要 deal 的是不同的东西

比如 A 说要卖给 B xxx
但是 A 是 aspect xxx
B 以为 A 要卖的是 yyy
所以弄错了 这个算是 mistake of identity
这是 common law 的 mutual mistake
所以是 void 的 因为从来没有达成任何协议过

5.4.1.3 A mistake as to the quality of the subject matter

1. Where there is a contractual description- if quality not met can go for breach of a term of the contract.

Where the subject matter of the contract lacks some quality which it is believed to have,
the first question is whether the quality forms part of the contractual description of the thing.
If it does and the article does not answer the description of that which is sold, the contract is valid and the party who
gave the description is in breach of a term of the contract.
当合约是有 description 的
如果没有达到 description 的要求.
那么可以去 sue for breach of term of the contract
当 contract 的 subject matter 少了应该有的 quality
第一个问题= quality 算不算是 contractual description 里面的一部分?
如果 quality 算是 contractual description 的一部分
然后不达标, contract 是 valid 然后是可以去 sue for breach of the term of the contract.

Where there is no contractual description 如果不算是 contractual description 的一部分

mistake as to the quality of the subject matter generally does not nullify the consent under English Law. The position
under the Act may be the same.
弄错 subject matter 的 quality gr 是不会 nullify consent to the contract 意思可能就是 agreement 不会 Void 【english】
我们的 act 的 position 应该是一样 GR= 不会 void; valid (The explanation to s.21)

Explanation—An erroneous opinion as to the value of the thing which forms the subject-matter of the agreement is not to
be deemed a mistake as to a matter
of fact.
错误的 opinion 对于一个东西的 value
是不算 mistake as to matter of fact 的
Opinion of the value 是不算 matter of fact 的

Example
if A buys B’s car under the belief that the car is accident free and pay the price for an accident free car, A would not have
bought the car if it was not accident free. If B did not present the car was accident free and has not contracted on the
basis that the car was accident free, the contract is valid and A cannot recover the purchase monies he has paid.

例子: 如果 A 买了 B 的车 相信车是从来没有发生过车祸的 还的钱也是这种 quality 的车

如果不是从来没有发生过车祸的车 A 也是不会用这个价格去买这个车
如果 B 没有去讲这个车是从来没有发生过车祸的话 也没有签约来 on 这个 basis 的话
contract 还是 valid 的 A 不能拿回已经付款了的钱
主要还是看 B 有没有去拿这个来讲 然后 base on 这个来签约
如果没有就不能说 void 因为没有达成你 expect 的 quality/你的 opinion 不会弄到你没有 consent to contract
5.4.1.4 A mistake as to the possibility of performing the contract.
Sheikh Bros Ltd v Ochsner
PC held that the very basis of the contract was the sisal area should be capable of producing an average of 50 tons a
month throughout the term of the agreement and since that could not be done, the mistake was to a matter of fact
essential to the agreement and the agreement was therefore void for mistake.

合约写那个 area 应该要可以生产 50 吨每个月

可是之后发现根本没有办法生产那么多
Mistake=弄错 根本没有 perform contract 的可能性
所以 agreement 是 void.

5.4.1.5 Mistake made by one person only.

1. S.23 Therefore the contract would still be valid.

2. Mistake as to the identity of the person with whom the contract is made is a mistake of one party only. Under s.23 of
the Act, such a contract is valid and enforceable.
跟谁签约 一边弄错签约人的身份 不会让合约变 void 还是 valid 的

Contract caused by mistake of one party as to matter of fact

23. A contract is not voidable merely because it was caused by one
of the parties to it being under a mistake as to a matter of fact.

contract 不会变 void 因为是一方弄错东西 就算是 matter of fact

是要双方都不知道的才会让 contract 变 void.
一方弄错 contract 还是 valid 的

5.4.1.6 Mistake as to law

S.22 of the CA1950
Hence if there is a mistake as to Malaysian law the contract is valid.

Effect of mistake as to law

22. A contract is not voidable because it was caused by a mistake
as to any law in force in Malaysia; but a mistake as to a law not in
force in Malaysia has the same effect as a mistake of fact.
如果你是弄错 malaysia in force 的 law 那么是不会吧 contract 弄到 voidable 的
但是如果你是弄错 not in force 在 malaysia 的 law 那么就是=mistake of fact 那么就是 void 的

ILLUSTRATION
A and B make a contract grounded on the erroneous belief that a particular
debt is barred by limitation: the contract is not voidable.

A B 做了一个 contract 的原因是因为错误的相信 某个 debt 已经被 limitation barred 掉了

可能因为这个是 malaysia in force 着的 law
所以这个合约是 not voidable.

Indian case of Shiba Prasad Singh v Chandra Nandi 1949

the Privy Council held that the restoration of money paid under the mistake also includes money paid under mistake of law
as provided for under s.22.

However, in English law of Bilbie v Lumley 1802, the court held that the payment under mistake of law is recoverable.

But in Kiriri Cotton Co Ltd v Dewani 1960, Lord Denning said that recovery is
permissible where the transaction is rendered illegal under a statute which has been enacted to protect the pt.

Shiba 因为 mistake 而要 restore 钱回来 包过 mistake of law s.22 这个错误的钱也是要 restore 的

Bilbie v Lumley [英国的 case]
如果是因为 mistake of law 的 payment 是可以 recover 回来的.
Kiriri 讲 recovery 是可以被允许的 当交易 under statute 是非法的 然后是 enacted 来保护 pt.
5.4.3.1 Relief
S.21 of the CA 1950 provides that when both the parties to an agreement are under a mistake as to a matter of fact
essential to the agreement, the agreement is void. A void agreement is not enforceable by law.
有 Mistake 就是 void.

S.66 provides that when an agreement is discovered to be void, or when a contract becomes void, any person who has
received any advantage under the agreement or contract is bound to restore it, or to make compensation for it, to the
person from whom he received.
不管是 innocent party 还是 guilty party 总之两个都不懂所以两个都没有错
都应该要 restore 回去 如果有什么好处 或者作出赔偿如果已经变不回去了

5.4.3.2 Where money paid or anything delivered under coercion.

s.73, ,

Liability of person to whom money is paid, or thing delivered, by

mistake or under coercion
73. A person to whom money has been paid, or anything delivered,
by mistake or under coercion, must repay or return it.
如果是因为 mistake 跟 coercion 之前学的一样 一定要还回去!!

ILLUSTRATIONS
(a) A and B jointly owe RM100 to C. A alone pays the amount to C, and B,
not knowing this fact, pays RM100 over again to C. C is bound to repay the
amount to B.
A B 一起欠 100 from C
A 之前还了给 C
B 不知道 A 已经还了 又去还 100 给 C
C 必须还回 100 给 B
这是 mistake 你不能收多的钱的好吗!!!

5.4.3.3 Rectification
S.30 SRA provides that rectification is allowed for a mutual or common mistake but not for an unilateral mistake.
如果是 mutual 或者 common mistake 不是单方 mistake
可以做 rectification 应该就像改正错的东西

When instrument may be rectified

30. When, through fraud or a mutual mistake of the parties, a
contract or other instrument in writing does not truly express their
intention, either party, or his representative in interest, may institute
a suit to have the instrument rectified: and if the court find it
clearly proved that there has been fraud or mistake in framing the
instrument, and ascertain the real intention of the parties in executing
the same, the court may in its discretion rectify the instrument so
as to express that intention, so far as this can be done without
prejudice to rights acquired by third persons in good faith and for
value.

Southwind Development Sdn Bhd v Hass Plantations Sdn Bhd 1996

held that before rectification is allowed for a mutual mistake, it must be satisfied that the parties intended to make an
arrangement. The court will enquire into the intention of the parties and not the language used.
但是要做 rectification 的前提意思是 parties 有意思签约的
会问 parties intention 而不是看字面上合约写什么字来断定 intention

5.5 illegality
S.10 of the CA 1950 provides that for an agreement to be a contract it must be made by the free consent of the parties
competent and that the consideration and object of the agreement must be lawful and are not expressly declared to be
void.
Consideration 要是 lawful 的 agreement 的 object 也要是 lawful 的 不然就是 void 就不算是 contract x enforceable by law

What agreements are contracts

10. (1) All agreements are contracts if they are made by the free
consent of parties competent to contract, for a lawful consideration
and with a lawful object, and are not hereby expressly declared to be
void.
(2) Nothing herein contained shall affect any law by which any
contract is required to be made in writing or in the presence of
witnesses, or any law relating to the registration of documents.

Where the parties enter into an agreement where the consideration of the agreement or the object of the agreement is
unlawful, the agreement is void and is unenforceable
s.2 (g) states that a void agreement is an agreement not enforceable by the law.

What considerations and objects are lawful, and what not

24. The consideration or object of an agreement is lawful, unless—
(a) it is forbidden by a law;
(b) it is of such a nature that, if permitted, it would defeat any
law;
(c) it is fraudulent;
(d) it involves or implies injury to the person or property of
another; or
(e) the court regards it as immoral, or opposed to public
Policy.

unlawful 的 consideration/object 有
1. 被 law 禁止的
2. 如果允许会 defeat law
3. 诈骗的
4. 会弄到或者间接弄到一个人受伤或者别人的 property
5. court 觉得是 immoral 的东西 违背 Public policy 的东西

Examples of lawful considerations

Illustration to s.24
(a) A agrees to sell his house to B for RM10,000. Here, B’s promise to pay
the sum of RM10,000 is the consideration for A’s promise to sell the house, and
A’s promise to sell the house is the consideration for B’s promise to pay the
RM10,000. These are lawful considerations.

A 同意卖屋子给 B rm10k
10,000 是 consideration
屋子也是 consideration
这些都是 lawful 合法的 consideration

(b) A promises to pay B RM1,000 at the end of six months, if C, who owes
that sum to B, fails to pay it. B promises to grant time to C accordingly. Here
the promise of each party is the consideration for the promise of the other party,
and they are lawful considerations.
A 答应给 B RM1000 在最后 6 个月
如果 C 没有还钱给 B 因为 C 欠 B 钱

B 就同意给 C 更多时间
互相的 promise 就是 consideration
这些都是 lawful 合法的 consideration

(c) A promises, for a certain sum paid to him by B, to make good to B the
value of his ship if it is wrecked on a certain voyage. Here A’s promise is the
consideration for B’s payment, and B’s payment is the consideration for A’s
promise, and these are lawful considerations.
A 答应 B 给他一些 amount 的钱
让 B 的船有好的 value 如果坏在哪里
A 的 promise 就是 consideration
B 的 payment 就是 consideration
这些都是 lawful consideration

(d) A promises to maintain B’s child, and B promises to pay A RM1,000

yearly for the purpose. Here the promise of each party is the consideration for
the promise of the other party. They are lawful considerations.
A 答应帮 B 养孩子
B 答应给 A 每年 1000
互相的 promise 就是 consideration
这都是合法的 consideration

Examples of unlawful considerations

(f) A promises to obtain for B an employment in the public service, and B
promises to pay RM1,000 to A. The agreement is void, as the consideration for
it is unlawful.

A 答应要给 B 找到一份公务人员的工作
B 答应给 A1000
这个 agreement 是 void 的
因为是 unlawful 的

Examples of unlawful objects

(e) A, B and C enter into an agreement for the division among them of gains
acquired, or to be acquired, by them by fraud. The agreement is void, as its
object is unlawful.

A B C 签约 分赚来的钱 是诈骗赚来的
这个 agreement 是 void 的
因为 object 就是那个钱是诈骗来的 是非法的
Object=合约里交易的”东西”

(h) A promises B to drop a prosecution which he has instituted against B for

robbery, and B promises to restore the value of the things taken. The agreement
is void, as its object is unlawful.

A 答应 B 撤销对 B 的诉讼 -打抢

B 答应还给他 枪了的东西
这个 agreement 是 void 的
因为 object=那些被抢的东西是非法的

Lim Kar Bee v Duofortis Properties (M) Sdn Bhd

The Supreme Court held that the agreement was void as its object was to defeat the law.
agreement 是 void 的因为 object 违法了

Examples of contracts involving fraud

E-刚刚讨论过了 fraud 得来的 gain 不行 那个 object 会是 fraudulent 的所以是 void.

(g) A, being agent for a landed proprietor, agrees for money, without the
knowledge of his principal, to obtain for B a lease of land belonging to his
principal. The agreement between A and B is void, as it implies a fraud by
concealment, by A, on his principal.
A 是 一个 Landed proprietor 的 agent
同意收钱 交换帮 B obtain 这个 principal 的 land 的 lease
Land proprietor 就是 A 的 principal 是不知道的
然后不是 A 自己的 land 是 principal 的 land
A B agreement 是 void 的
因为这个就是跟诈骗没有差别 implies 了 fraud 用 concealment 的方式

[分清楚!!!]
S.24 “fraudulent”
这边的 implied fraud 用 concealment 的方式骗来的 object= money 是 fraudulent 的=unlawful 的 object----> agreement 是 void
因为是要分这个 illegal 的 gain
***交易着的 consideration 就是关系到 fraudulent 的

虽然这个也是 agent

C/f
刚刚的 fraud voidable 的--------------> 就是可能是 fraudulent misrep 的那种/by silence 骗人家签约?
那个是 s.17 的 “fraud”
***讲/代表别人讲不实的东西

Examples of contract which are immoral or against public policy

(j) A, who is B’s advocate, promises to exercise his influence, as such, with
B in favour of C, and C promises to pay RM1,000 to A. The agreement is void,
because it is immoral.

A 是 B 的 advocate A 答应用他的影响力对 B 去让他做对 C 有好处的东西

C 答应给 RM1000 给 A 如果你帮我在 A 的面前讲好话
这个 agreement 是 void 的 因为是 immoral 的 利用关系走后门的概念

(k) A agrees to let her daughter to hire to B for concubinage. The agreement
is void, because it is immoral, though the letting may not be punishable under
the Penal Code.
A 同意让她的女儿做 B 的妾
这个 agreement 是 void 的 因为是 immoral 的违背道德的
虽然可能不是犯法 但是还是 immoral 喽 可能就是社会大众不能接受的

Theresa Chong v Kin Khoon & Co (FC) 1976

the Federal court held that a contract is against the public policy if it
A. Prejudices the State- eg: making a contract with the enemy during war or
B. Abuses justices- eg: pay money not to report to the police or
C. Imposes restrictions on freedom- eg: restrains in marriage or in trade

Thereby, from Theresa Chong, we know that the category of public policy is very limited. It must be those
category that recognized by the court before.

FC 说 contract 是违背 public policy 的如果

1. 对国家有不公平 prejudice 比如跟敌国签约在打仗的时候
2. 滥用 justice 给钱要让对方不要报警之类的
3. 限制了别人的自由 比如不给别人结婚或者不给别人做生意

Ooi Kiah Inn, Charles v Kukuh Maju Industries Sdn Bhd (SC) 1993, the Supreme Court held that the agreement to
withdraw the police report was against public policy and hence was void.
同意去撤回报警的 agreement 是违背 public policy 的 所以是 void 的
Defraud bank purpose of loan x illegal
Pang Mun Chung v Cheong Huey Charn 2018**VVI

Facts
Pang- foreigner bf. Chiong gf
Pang is a foreigner who is not able to get loan in msia, but pang got property in malaysia.
He transfer his land to Chiong on trust with the arrangement that make it look like a sale.

So that Chiong using Sales and Purchase to obtain a loan from the bank.
So, Chiong will get the loan from the bank as if buying property from Pang.
Once she get the loan, she will then give Pang the money for his business

It is like a way to defraud the bank, otherwise Pang will not be able to get the loan.

Many years later, Pang defaulted for the loan. Bank went for foreclosure.
A lot of surplus after repay the bank. The surplus went to Chiong because she is the owner of the land on paper.
Now, Then broke up.
Pang said you holding trust from me. Thereby, you need to repay me the surplus.

High court
Chiong’s defence is based on illegality. The whole transaction is about to defraud the bank. High court agreed and decided
in favour of the defendant.

2018, case go to court of appeal.

CA ordered surplus to be returned to Pang as there is a trust.
2 principles used by CA to allow the appeal by Pang.
1. Whatever that the bank said about not lending to foreigner about this transaction in order to by pass the bank’s
internal requirement, there is nothing wrong with the transaction. This is not against public policy and it is not
illegal.

5.5.1 Consequences of illegality

1. General rule- the courts will not enforce an illegal contract-Menak v Lum Kam Choon 1973
GR: courts 不会去 enforce illegal contract

2. S.24 provides that an illegal contract is void and unenforceable. However, in s.66 of the Contract Acts provides the
remedy of restitution to parties of a void contract.
虽然 s.24 讲 illegal contract 是 void 的 就是一开始就没有 valid 过 而且不可以被 enforce
但是 s.66 讲如果是 void contract, court 会给 restitution 当 remedy 就是帮你变回原本的样子.

3. Ahmad bin Udoh & Anor v Ng Aik Chong- suggests that the test for the application of s.66 to an unlawful agreement
under s.24 is whether the parties were aware of the illegality, can they seek restitution under s.66. Otherwise no remedy
will be granted to the guilty party under s.66. In each case, therefore, the courts have to examine the facts of the case to
determine whether the party was aware of the illegality at the time the agreement was entered into.
这个 case 说 test= parties 有没有 aware illegality 来决定他们可以不可以拿到 restitution 当做 remedy
如果你们已经是 aware 这个 Illegality 你不可以之后又用 s.66 来 claim restitution
所以在每个 case, courts 都需要去 examine facts 来决定 party 有没有 aware illegality 当签约的时候

4. Where a contract contains an illegal term, the lawful part of the contract can be served from the unlawful part thus
enabling the pt to sue on a promise unaffected by any illegality. Murugesan v Krishnasamy.
如果一份合约只是一部分有非法的东西
party 还是可以 enforce 那一部分是没有 illegality 的

5.6 Restraint of trade s.28

1. A contract in restraint of trade is an undertaking where one party agrees not to trade or conduct his profession or
business in a particular area for a specified period.
- In English Law, a contract which is in restraint of trade is void unless it can be shown to be reasonable in the interest of
the parties and in the interest of public.

一个合约是有 阻止别人 trade: 比如一个 party 同意不会 trade/做什么他的专业/在哪个地方做生意 在特定的时刻

English position: restraint of trade 就是 void 的 除非可以证明 他们对 public 的 interest 或者对 party 的 interest 是合理的
In Nordenfelt v Maxim Nordenfelt 1894, the HOL held that the reasonableness of a clause in restraint of trade depends
on all the facts in each case. In this case, the HOL upheld a worldwide restraint because the number of manufacturers in
that particular business of manufacturing guns and ammunitions was limited.
Held: 这种阻止别人做生意的 clause 合理不合理是 case to case basis 的
在这个 case, HOL 同意是全世界 restraint 因为做这种生产枪支的生意的人在全球都非常少

In Malaysia, s.28 The position under the Act is different from the common law position. Under s.28, all contracts is
restraint o trade are void unless it comes within one of the 3 exceptions. If there is a restraint of trade clause, the
contract is only void to the extent of that clause.
S.28 的 position vs common law 是非常不一样的
S.28 是 restraint 什么类型的 trade 都是 void 的 除非是在 exception 里
Common law 是只要是对 public interest 或者 party interest reasonable 就可以了
如果一个合约里有这个 restraint 的 clause, 这个 contract 也只有那一部分是 void 的!!

Agreement in restraint of trade void

28. Every agreement by which anyone is restrained from exercising
a lawful profession, trade, or business of any kind, is to that extent
void.
Saving of agreement not to carry on business of which goodwill is sold

Exception 1—One who sells the goodwill of a business may agree with the
buyer to refrain carrying on a similar business, within specified local limits, so
long as the buyer, or any person deriving title to the goodwill from him, carries
on a like business therein:

Provided that such limits appear to the court reasonable, regard being had
to the nature of the business.

Gr:
每个合约 如果有谁被阻止 去做律师的工作/交易/做任何的生意 都是 void 的

Exp: goodwill
除非是是不可以卖一个公司的 goodwill----> 那真的是不可以 不然都是 void
如果谁是卖 business 的 goodwill 可能可以同意 Buyer 不能做一样的 business [关系到 goodwill 的 restraint 是不会 void]
在特定的 local limits 地点限定 只要有任何人从他这边拿走 goodwill 然后是做差不多一样的生意

但是也要是 court 觉得是 reasonable 的 limit 在那个 business nature.

3exceptions
3. However, there are 3 exceptions to this rule. I.e the clause in restraint of trade is not void where there is.
A. An agreement not to carry on business of which goodwill is sold: here, one party who sells the goodwill of a business may
agree with the buyer to refrain from carrying on a similar business within specified local limits. The limits must appear to
the court to be reasonable regard being had to the nature of the business. This exception only applies where there is a
contract between a vendor and a purchaser and the vendor is selling the goodwill of the business.
如果我们的 agreement 是 不卖 business 的 goodwill 那么这个 agreement 不会 void 的
我卖给你 goodwill 就是也不能让你抢走我的生意
所以你都是要同意不能进行一样的类似的生意在我讲的范围里面 specified local limits
但是这个 Limit 也是要 court 觉得 reasonable 的才可以 看是什么 business nature

这个 exception 只能用在 一个商家还有一个卖家 然后卖家是卖 business 的 goodwill

B. An agreement between partners prior to dissolution: not to carry on a business similar to that of the partnership within
specified the local limits.
如果是 partner 之间在拆伙前的 agreement 是 不能做跟 partnership 类似的生意 在特定的 local limits 里面
这个也是不会 void 的

C. An agreement during continuance of partnership: partners may agree that some one or all of them will not carry on any
business, other than that of the partnership, during the continuance of the partnership.
在继续经营 partnership 的时候
partner 可能会同意不能进行任何的 business 除了这个 partnership 在还在这个 partnership 的时候

4. The 3 exceptions are interpreted very narrowly by courts and are restricted to only sale of goodwill of the business and
in cases involving partnerships.
exception 是非常难被允许的
只被允许在 goodwill 还有 partnership 上面罢了

Wrigglesworth v Wilson Anthony (1964)

the dt was a legal assistant in the pt’s legal firm, he could not open his own law firm within a 5-mile radius of Kota Bahru.
The dt left the firm and opened his own legal firm in Kota Bahru. The pt sued. The dt argued that the clause was void
under s.28. The pt invoked the 2nd exception to the s.28 is: an agreement between 2 partners not to carry on a business
similar to that of the partnership within specified local limits. The court held that the 2nd exception is only for partners.
In this case, the dt was not a partner and hence the restraint was illegal and the contract was void. Further, the court
held that the 3 exceptions are very strict.
dt 是律师在 pt 的律师楼
dt 不能开自己的律师楼 5 mile 里面
dt 离开了 firm 还是开了律师楼在 kota bahru.
Pt 就告他咯
dt 就 argue 这个是 restraint of trade 所以说 void 的 under s.28

Pt 用 s.28 的 exception 来说就是 partner 不能再特定的 local limits 里面开一样的 Business

Held: 2nd exception 只是给 partners 罢了 dt 不是 partner 所以这个 restraint 就算是 illegal 的 所以 contract 是 void 的 就是答应
不在哪里哪里开
court 也说了 exception 是非常严格的

Polygram Records Sdn Bhd v The Search

The court held that the clause prohibiting the rock group Search from making any records after the expiry of the
contract with the pt was void ab initio.
阻止团队去录音在合约结束后 这个是 void 的

6. Negative covenants during currency of the contract

Negative covenants operating during the period of the contract of employment when the employee is bound to serve the
employer are generally not regarded as restraint or trade and therefore do not fall under s.28 of the Contracts Act 1950.

Negative covenant 在有员工合同的时候 operates 的 被逼只能 serve employer 就是可能有规定不能做什么

这个不算是 restraint of trade 也不会 fall under s.28

Polygram Records Sdn Bhd v The Search

The court held that the covenant whereby the dt undertook to provide exclusive recording rights to the pt during the
currency of their recording contract, is not a covenant in restraint of trade and is therefore not rendered void under s.28
of the Act. The court held that s.28 only strikes at post-contract restraints and not to those during the currency of the
contract.
covenant 在还发生着的录音 contract 里的 只可以跟 pt 录音罢了的这个 covenant 不算是 restraint of trade 不会 fall under s.28
S.28 只是 for 合约结束后的限制
而不是那些正在合约期间的 restraints.

Prevent livelihood
Stamford College Group Sdn Bhd v Raja Abdullah bin Raja Othman 1991
the dt was a lecturer in the pt’ college. One of the clauses in the contract of employment provided that if the dt left the
college, then he couldnot lecture in any other college for 2 years unless he obtained the pt’s written approval. The dt left
and lectured in another college within the 2 years. The pt sued. The dt argued that the clause was void under s.28. The pt
argued that the period was only 2 years which was not lifelong and was agreed by the dt. The High court held that the test
or criteria is to see whether the clause restricts the dt’s livelihood. If it restricts his livelihood, as in this case, then s.28
and the contract is void and the pt cannot enforce.
如果是影响 livelihood 阻止别人讨饭碗 那么就是 void 的

Specified manner to carry out his trade

Hua Khiow Steamship Co Ltd v Chop Guan Hin 1930
the dt agreed to use the pt’s ship and if the dt were to use any other ship, he would pay a fine to the pt equivalent to 3
times the cost of the freight. The dt shipped the goods in some other ship and the pt sued. The dt argued that under s.28,
the clause was void as it restricted the manner. The court held that s.28 did not apply because the contract did not
prevent the dt from carrying out his trade. It merely specified the manner to carry out his trade. Although it was a
disadvantage to the dt, it was still a valid clause.
S.28 不 apply 因为 contract 没有 prevent 她 carry out trade
只是要求他要怎么样进行 trade
没有阻止你完全不能做
只是说你要做可以 你必须这样做
虽然这样对 dt 是没利
但是还是算 valid trade @@

restrained the dt from disclosing the pt’s confidential information

Schmidt Scientific d v Sdn BhOng Han Suan 1997
the pt was supplier of medical scientific equipment and appointed the dt to be its distributor. A clause in the distribution
agreement provided that the dt should not disclose the pt’s confidential trade secrets but the dt breached this
agreement. The pt sought an injunction to stop the dt from disclosing trade secrets concerning the scientific equipment.
The dt argued that the clause was a restrain in trade under s.28 and hence the contract was void. The High court held that
the clause was not in restraint of trade. It merely restrained the dt from disclosing the pt’s confidential information to
the pt’s detriment. Thus, an injunction was granted.
clause 没有 restraint of trade 只是阻止他把隐秘的资料泄露出去 所以 injunction granted

11. Another issue is whether a contract is void if it contains 100 clauses and one is illegal.
Carney v Herbert 1985
the Privy Council held that it depends on the construction as a whole. If the illegal clause is merely subsidiary to the main
purpose of the contract then it may be severed leaving the whole contract valid.
如果 contract 有 100 个 clauses 有一个是 illegal 的话 contract 会 void 吗
held 要看整个的构造 如果只是一个小小的附属 clause 那么可能不会 void
如果是 main purpose of contract 可能就会 void

Maxim Nordenfelt Guns & Ammunition Co v Nortenfelt English case

HOL: the clause was severed, part of the clause was valid and enforceable and the other part was void.
clause 有几个部分
部分的 clause 是 valid,可以被 enforce
其他 part void
可以这样分 part 来 valid

5.7 Minors.
5.7.1 Contracts with minors s.10,11,69

What agreements are contracts

10. (1) All agreements are contracts if they are made by the free
consent of parties competent to contract, for a lawful consideration
and with a lawful object, and are not hereby expressly declared to be
Void.

只要是 free consent of parties

又是 competent parties
有 lawful consideration
有 lawful object
没有 void
那么就是 contract

Who are competent to contract

11. Every person is competent to contract who is of the age of
majority according to the law to which he is subject, and who is of
sound mind, and is not disqualified from contracting by any law to
which he is subject.

如果到达 age of majority 成年

又是 sound mind
没有 disqualified by 任何 law
那么他就是 competent 的 可以签约的

S.2 of the Age of the Majority Act 1971 provides that the age of majority is 18.
合法年龄是= 18 岁

Mohori Bibee
the court held that the effect of s.10 and s.11 of the Malaysian Contract Acts 1950 is to render all such agreements void.
The decision of the case has been applied in Tan Hee Juan v Teh Boon Kiat and Government of Malaysia v Gurcharan Singh.
It follows that in Malaysia all contracts entered into by minors are generally void and that a minor cannot sue or be sued in
contract.

Mohori
S.10 还有 s.11 的 effect 就是要让全部 agreement by minority void

Tan Hee Juan: 在 malaysia 全部合约 entered by minors 小孩子 就是大部分都是 void 的
minor 不可以 sue 也不可以被 sue in contract

Although all contracts entered into by minors are void, including a contract for necessaries, s.69 of the Contract Act 1950
allows a person who has supplied necessaries to the minor to be reimbursed from the property of the minor’s condition of
life.

虽然全部被小孩子签约的合约都是 void 的 包过 contract for necessaries 就是必须签的

但是有 exp: s.69 CA 允许 提供给 minors necessaries 的 supplier 可以 reimburse claim 回钱这样 从 minor 的生活情况

Claim for necessaries supplied to person incapable of contracting,

or on his account
69. If a person, incapable of entering into a contract, or anyone
whom he is legally bound to support, is supplied by another person
with necessaries suited to his condition in life, the person who has
furnished such supplies is entitled to be reimbursed from the property
of such incapable person.

如果一个没有 capacity enter contract 的人

或者任何是法律规定要 support 的
被人家提供任何的 necessaries 的东西 为了他的生活情况

那个提供的人可以 claim 回钱的

GOM v Gurcharan Singh

the court held that each case had to be decided on the facts pertaining to it and whether what is supplied is a necessary
suited to the infants’ condition becomes as much as question of law as of fact.

Held, in the circumstances if the provision of professional or vocational training for the minor in a Teacher’s Training Ubs
tution to enable him to qualify for the appointment as a teacher is a provision of necessaries.
Q=什么才算是 necessary 的 supplies 然后是适合 minor 的 condition
这个是 question of facts
提供在职训练 然他可以成为老师 这个算是 necessaries.

Mohori Bibee
the Privy Council held that an adult who contracts with a minor not only cannot enforce it but if he has transferred any
property to the minor, it cannot be recovered under s.65 and s.66 of the CA 1950.

如果已经转了什么 property 给 minor 不可以 recover under s.65 s.66 的

不是不可以 enforce 罢了 是转了的 property 都拿不回来呢
c/f
However, in Leha v Awang Johari, FC applied section 66 and ordered the adult to refund the purchase price to the infant
upon the infant vacating the lands occupied by him. The decision appears to conflict with Mohori Bibee.

但是 FC 用 S.66 叫 adult 去退款 purchase price 给 minor 当 Minor 还 property

4. The present law:

It appears as though the minor who has transferred his property can get the transaction declared void and remains the
owner of the property and does not have to return the money.
虽然 minor 转了 property 可以让 transaction 变 void
然后还是 Minor 自己是 owner of property 不必退还钱. 就是收到钱==又 keep property

Whereas if it is the minor who paid the money in pursuance of the contract. The FC decision in Leha enables the minor to
recover the money upon returning the property transferred to him.
但是如果 minor 是因为 contract 而去还钱
Leha 的决定是可以让 minor recover 拿回钱 当 Minor 还 property.

Minor 自己骗年龄就自己保重
Where an infant has falsely misrepresented himself full age and thereby induced a person to contract with him, no action
could be maintained against the infant and he can still plea infancy to avoid the contract; Mohamed Syedol Ariffin v Yeoh
Ooi Gark.

当一个 minor 就是 infant 错误说自己是满岁了的 够岁了的 来 Induced person 签约的话

那么不可以说自己是 minor 所以 void 来 avoid contract
你要吹你就要负责

5.7.2
Contracts with minors s.10; s.69
Exception that contract with minor are void.
1. Contract to marry: Rajeswary v Balakrishnan 1953, the court held that the agreement to marry was valid notwithstanding
the fact that the marriage partners were minors as it was customary for the parents to agree to marry off their minors.

结婚的合同是 valid 的 不会因为是 minor 就没有效

因为 custom 就是父母同意就可以了

S. 4(a) of the Age of Majority Act 1971 now provides that nothing in the Act shall affect the capacity of any person to act
in the following matters, namely marriage, divorce, dower, or adoption. A minor may therefore sue or be sued for such a
breach.
没有 act 可以影响 任何人的 capacity 在 结婚 离婚 嫁妆 领养
minor 如果有 Breach 也是可以被告或者告人的

B. Scholarship agreements
S.4(a) of the Contract (Amendment)Acts 1976 provides that no scholarship agreement shall be invalidated on the ground
that the scholar entering into such agreement is not of majority age.
未成年 也不会弄到 enter 的奖学金合约 void 的
C. The Employer Act 1955 and the Children & Young Persons (Employment) Act 1966 enables a minor to enter into a
contract of service or apprenticeship.

S.13 of the 1966 Act provides that notwithstanding to the contrary contained in the CA1950 or any other written law, any
child or young person shall be competent to enter into contract of service under this Act, other than as an employer, and
may sue as pt without a guardian ad litem. A child is defined as any person below the age of 14 and a young person is one
between 14 and 16.

不管 CA1950 说 minor 不 capable

还是其他 law 说 minor 不 capable
儿童就是可以 competent under 这个 act
Enter contract 【不是做 employer 哈哈是做 apprentice】
不是说 child/young person 可以开始做老板不会 void 哈哈!!
可以 sue pt 本人 不需要 sue 父母

child 是 14 岁以下
Young person 14-16