TUTORIAL 3

1. Jerico had promised his wife, Mei Mei that he will transfer his land to her after her
birthday in March. Mei Mei was so happy with this news. Sadly, on Mei Mei’s birthday,
Jerico changed his mind and decided not to transfer the land to Mei Mei but postponed his
intention to do so during her next birthday. Mei Mei wants to know whether Jerico is
bound by his promise to her. Advise Mei Mei.

ISSUE:
The issue in this situation is whether Jerico is bound by his promise to transfer his land to Mei Mei
after her birthday in March.

LAW:
The relevant section is Section 2(h) states that the contract can be defined as an agreement
enforceable by law and legally binding between the parties under governing contract which is
Contract Act 1950.
This law falls under intention to create legal relation. For an agreement to be a contract, there must be
intention between the parties that they want to enter into a legal relationship. By Jerico case, its falls
into domestic agreement. A domestic agreement normally does not constitute a legally binding
agreement. This is because the parties have no intention to create legal relation.
This illustrated in the case of Balfour V Balfour (1919) 2 K.B. 571. The defendant was a civil
servant stationed in Ceylon. When he was in England, he had promised the plaintiff (his wife) that he
will pay her monthly allowance as maintenance. The wife was unable to accompany the husband to
Ceylon due to ill health. But the Defendant did not pay any allowances. The plaintiff sued but there
was no legally enforced agreement. The Court held that there was no legally binding agreement
because parties did not intend to create legal relations.
APPLICATION:
By applying the relevant laws in this case, Jerico is not bound to his promise to transfer the land to his
wife, Mei Mei as there no intention to create legal relation like a business agreement because the
agreement is between husband and wife. Referring to the case of Balfour v Balfour, the defendant
defaulted the promise, so the court held that the agreement was not legally enforced because parties
did not intend to create legal relations. Pertaining to the current situation, there was no intended to
legally enforceable between family agreement. Thus, there is no legally binding agreement between
Jerico and Mei Mei.
CONCLUSION:
In conclusion, Jerico is not bound by his promise to transfer the land to Mei Mei after her birthday in
March because the is no legally binding agreement between them and they did not have intended to
create a legal relation.
2. Abu have financial difficulties and he was so over the moon when Lina appointed him as her
agent to sell her house for RM500,000. Abu is so keen to start his work as an agent to look
for a prospect buyer. 2 weeks later, Abu successfully secured for a sale contract on behalf of
Lina with a buyer named Khadeejah for a sale value worth RM400,000. Abu felt so lucky
when Khadeejah decided to buy Lina’s Honda City. Without any delay, Abu also make an
arrangement for Khadeejah to sign a sale contract to buy Lina’s Honda City by cash.
Lina was shocked with the arrangement made by Abu in regards of the house purchase price
and also the selling of her Honda City. Referring to the Law of Agency, advise Lina on her
situation and Abu’s status as agent.

ISSUE:
The issue in this situation is whether the contract made by Abu is valid.

LAW:
The relevant section is Section 165 states that an agent has to exercise care and diligence in
doing his principal house.
This illustrated in the case of Keppel v Wheeler (1927) 1 KB 577. An agent was appointed to
sell his principal’s house. There are two offers, namely the first one the principal’s already
accepted with a condition, but the second offer was for a higher price. The agent did not
communicate about the second offer to the principal. The court held that the agent had to pay
the different between the first and the second offer.
APPLICATION:
By applying this law in this case, Abu is not bound to his promise to sell his principal house.
Lina can sue Abu and terminated Abu as her agent.
CONCLUSION:
In conclusion, there is no legally binding agreement between them.