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Contract Law: Allan's Sales Disputes

Allan made two promises to sell items without proper contracts. He promised to sell his iPhone to Sally for RM200 but later refused because the price was too low. He sold his car to Abu for RM20,000 but the odometer reading was higher than what Allan had stated. The elements of a valid contract are: 1) Allan's promise to Sally regarding the iPhone was not valid as there was no consideration. 2) Allan's sale of his car to Abu was voidable, as Allan had committed fraudulent misrepresentation about the car's mileage, violating the requirement of free consent. Abu could avoid the contract by returning the money and car to Allan.

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101 views1 page

Contract Law: Allan's Sales Disputes

Allan made two promises to sell items without proper contracts. He promised to sell his iPhone to Sally for RM200 but later refused because the price was too low. He sold his car to Abu for RM20,000 but the odometer reading was higher than what Allan had stated. The elements of a valid contract are: 1) Allan's promise to Sally regarding the iPhone was not valid as there was no consideration. 2) Allan's sale of his car to Abu was voidable, as Allan had committed fraudulent misrepresentation about the car's mileage, violating the requirement of free consent. Abu could avoid the contract by returning the money and car to Allan.

Uploaded by

nur syafiera
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd

CHAPTER 6

JUNE 2016

QUESTION 3a

Situation I :

Allan intend to sell his iphone to sally and his car and his car to Abu. Originally Allan
promised to sell iphone for RM200 but in the end he refused to sell because the price to
cheaper and no contract involved.

Situation ii :

Abu paid RM20 000 for Allan car but found out odometer had been adjusted and the mileage
was higher than what Allan said.

3 basic elements of contract reference to above cases:

i. Allan and Sally


 According contract Act 1950, section 26 state that agreement without
consideration is void, unless it is writing and registered or is a promise to
compensate for something done or it is a promise to pay debt barred by
limitation law
 Explanation on section 26, promisor not a bid merely because
consideration inadequate, inadequacy may take consideration
 Court concern is that whether promisor making good or not (bad bargain)
 Contract valid

ii. Allan and Abu


 Allan conducting fraudulent misrepresentation based on section 17
Contract Act 1950.
 Contract is voidable under section 19(1) Contract Act 1950 voidable if
agreement without free consent
 Abu should avoid contract immediately
 Allan returns RM20,000 to Abu and Abu return Allan car
 Abu can avoid contract if it is proved fraud.

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