MOOTING SCRIPT
SEE YI VONNE
FIRST GROUND OF APPEAL
The learned High Court Judge erred in law in holding that MUB – (the respondents) was
entitled to accept ABC’s offer of RM 240 million although MUB was aware of ABC’s – (the
appellants), mistake.
SCRIPT FOR THE FIRST GROUND OF APPEAL – MISTAKE
May it please the court, the counsel acting for the respondents seeks permission to proceed
with our submissions.
Much obliged, your lordship / ladyship.
My lords / ladies, the counsel contends that the respondents are entitled to have accepted
the offer of RM 240 million made by the appellants, irrespective of the appellants mistake.
This contention of the counsel, is supported by 4 authorities:
1. Firstly, may I refer your lordship / ladyship to TAB 8, PAGE 50 of the bundle of
authorities. My lords / ladies, according to Section 23 of the Contracts Act 1950, it
is stated that ‘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’. This provision is particularly
relevant to the present case, where we find ourselves dealing with a unilateral
mistake made by the appellants. In the context of our case, as outlined in
PARAGRAPH 5 of the moot problem, the appellants mistakenly omitted cost entries
for items stipulated on PAGE 21 of the Invitation for Tenders. As such, my lords /
ladies, the counsel submits that the contract made on 1st September 2021, is not
voidable, by any means.
2. Secondly, may I refer your lordship / ladyship to TAB 9, PAGE 52 of the bundle of
authorities. My lords / ladies, Dato Seri Professor Visu Sinnadurai has taken the
liberty to interpret the effect of Section 23 of the Contracts Act 1950 where he has
stated that the use of words ‘not voidable’ under this provision is taken to mean
that an agreement falling within the ambit of Section 23 is valid. Furthermore, Dato
Seri Professor Visu Sinnadurai went on to submit that the scope of Section 23
includes cases where the mistake is one that is not ‘a matter of fact essential to the
agreement’. If your lordships / ladyships could please refer to PARAGRAPH 4, UNDER
THE INVITATION FOR TENDERS, TERM 3 of the moot problem, the respondents have
clearly stated under these terms that in the event that the tenderer does not specify
a figure for the items from pages 1 to 23 of the Invitation for Tenders, the
respondents are entitled to imply from such conduct that the tenderer does not
wish to charge the respondents for such items. As such, my lords / ladies, the pivotal
issue at hand revolves around the appellants omission of cost entries on page 21,
amounting to RM 10 million. However, it is crucial to assert that this mistake, as
significant as it may seem, it is not a matter that is essential to the agreement. This
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is because, the respondents are well within their rights to believe that the
appellants, by failing to insert cost entries for the items on page 21, have signalled
a clear intention not to charge the respondents for those particular items. This aligns
with the terms explicitly outlined in the Invitation for Tenders. Furthermore, if your
lordships / ladyships could please refer to PARAGRAPH 1 of the moot problem, the
respondents adherence to a frugal spending policy, reflects a principled approach to
business. Therefore, when confronted with the appellants oversight in inserting cost
entries, the respondents, in good faith, reasonably interpreted this omission as a
clear indication that the appellants did not wish to charge for the items. The
respondents, by no means, have snapped up the offer with the intentions of taking
advantage of the appellants. Instead, the respondents have acted in accordance
with the terms listed out in the Invitation for Tenders. They are entitled to interpret
such omission as a deliberate choice by the appellants not to seek payment for the
items.
3. Thirdly, may I refer your lordship / ladyship to TAB 7, PAGE 46 of the bundle of
authorities. My lords / ladies, the proposition of Dato Seri Professor Visu Sinnadurai
has been exercised in the case of Tham Khong v Oh Niam & Others, where his
lordship, Ong Hock Thye, Federal Court Judge citing the case of Tamplin v James in
TAB 6, PAGE 37 of the bundle of authorities held that ‘If a man will not take
reasonable care to ascertain what he is contracting about, he must take the
consequences. Even if the mistake is such as a reasonably diligent man might fall
into, he has made a mistake where there has been no misrepresentation and where
there is no ambiguity in the terms of the contract’. The counsel seeks to submit that
there is no evidence of misrepresentation, nor were there any ambiguities as to the
terms of the contract on the part of the respondents. Moreover, if your lordships /
ladyships could please refer to PARAGRAPH 4, UNDER THE INVITATION FOR
TENDERS, TERM 4 of the moot problem, the respondents had even taken one step
further in ensuring and reminding the tenderers that before they signed the
declaration, they were fully aware of the items that they had listed in the
Specifications in the Invitation for Tenders. Despite the respondents already stating
in TERM 3 of the Invitation for Tenders that in the event the tenderer does not list
the cost for the items, the respondent is able to interpret such behaviour as free of
charge. As such, my lords / my ladies, the respondents are not obliged to ensure that
the appellants have meticulously reviewed the terms of the contract; rather, it is the
duty of the appellants to ensure a thorough understanding of the contract they are
entering into and to exercise necessary precautions before binding themselves.
Thus, since the appellants have failed in this regard, the onus rests upon the
appellants to bear the consequences.
4. Moving on, may I refer your lordship / ladyship to TAB 1, PAGE 10 of the bundle of
authorities. My lords / ladies, an invitation to tender is an invitation to treat, the
offer is made by the tenderer, in this case the appellants, and the acceptance is
made when the body inviting the tender accepts the offer. This general principle of
the law was observed in the case before you of Cheng Keng Hong v Government of
the Federation of Malaya. If your lordships / ladyships could please refer to
PARAGRAPH 4, PARAGRAPH 5, AND PRAGRAPH 6 of the moot problem, it can be
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seen that the respondents on 1st September 2021, invited tenders for the
construction of the project and received a bid from the appellants of RM 240 million,
which the respondents accepted on 30th September 2021. If your lordships /
ladyships could please refer to TAB 2, PAGE 20 of the bundle of authorities, the
courts in Chin Well Fasteners Co Sdn Bhd v Sampath Kumar Vellingiri & Ors have
pointed out that in the absence of fraud or misrepresentation, a person is bound by
a writing to which he has put his signature, whether he appreciated its contents or
has chosen to have them unread. If your lordship / ladyship could please refer to
PARAGRAPH 5 of the moot problem, the appellants had signed the declaration on
page 23, indicating the appellants intention to be bound by the declaration. As such,
my lords / ladies, this chain of events, specifically the unconditional acceptance of
the tender by the respondents, and the signature of the appellants has resulted in
an enforceable contract between the appellants and the respondents, essentially
binding both parties to uphold and execute their respective obligations.
Your lordships / ladyships, before I proceed with the next issue, perhaps, there are some
issues on which I may be of further assistance?
If the judge say no – Much obliged your lordship / ladyship.
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SECOND GROUND OF APPEAL
The learned High Court Judge erred in law holding that on 30th August 2022, there had been
no valid variation of the 30th September 2021 contract increasing the contract price for the
project to RM 250 million on the ground that ABC did not provide any consideration for the
promise.
SCRIPT FOR THE SECOND GROUND OF APPEAL – CONSIDERATION
My lords / ladies, the counsel seeks permission to begin with the submission for the second
issue at hand.
Much obliged, your lordship / ladyship.
My lords / ladies, the counsel contends that the events on 30th August 2022 to vary the
initial contract of 30th August 2021, is unenforceable due to the lack of consideration on the
part of the appellants. This contention of the counsel is supported by the following
authorities:
1. My lords / ladies, consideration is a necessary ingredient for a valid contract,
essentially, it is the value given for a promise. Accordingly, Section 26 of the
Contracts Act 1950 provides that all agreements made without consideration is void.
If your lordship / ladyship could please refer to PARAGRAPH 4 UNDER THE
INVITATION TO TREAT, TERM 2 of the moot problem, the facts of the case shows that
in the event that the tenderer agree to the following terms, the tenderer is bound
to complete the project no later than 30th September 2022. The appellants in
agreeing to be bound are obliged to comply with these terms of the contract.
However, if your lordship / ladyship could please refer to PARAGRAPH 10 of the moot
problem, the appellants had threatened the respondents that they intend to
abandon the project, should the respondents not adhere to the appellants
additional payment of RM 10 million. My lords / ladies, the general principle of
consideration dictates that performance of an existing contractual duty owed to a
promisor is not consideration. If your lordship / ladyship could please refer to TAB
10, PAGE 54 of the bundle of authorities, this principle was reiterated in the case of
Stilk v Myrick. If your lordship / ladyship could please refer to TAB 11, PAGE 77, the
courts in the case of Ong Tiaw Kok & Anor v Bian Chiang Bank Ltd, citing Stilk v
Myrick, pointed out that performance of an existing duty owed to a promisor is
unreal consideration. As such, my lords / ladies, the appellants are merely
performing their pre-existing contractual duty as agreed upon on 30th September
2021 to duly complete the project no later than 30th September 2022. Moreover, if
your lordship / ladyship could please refer to PARAGRAPH 4 UNDER THE INVITATION
TO TREAT, TERM 3 of the moot problem, it is clearly stated that if the tender bid is
accepted by the respondent, the sum will not be varied under any circumstances.
Once again, if your lordship / ladyship could please refer to PARAGRAPH 5 of the
moot problem, the appellants signed the declaration affirming their intentions to be
bound by such terms. Hence, my lords / ladies, it is absurd for the appellants to
demand an additional payment of RM 10 million when the appellants have agreed
and possess adequate knowledge that the contract price of RM 240 million will not
be varied. Therefore, it is submitted that the appellants promise to complete the
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stadium no later than 30th September 2022 in exchange for the additional payment
of RM 10 million is not valuable consideration as the appellants are under the 30th
September 2021 contract, obliged to uphold their end of the bargain.
2. My lords / ladies, the counsel acknowledges that there is an exception to this general
principle that ‘performance of an existing contractual duty owed to a promisor is
not consideration’. This exemption is illustrated in the case of Williams v Roffey Bros
and Nicholls (Contractors) Ltd. If your lordship / ladyship could please refer to TAB
12, PAGE 90, the case of Williams v Roffey, suggests that if one party’s promise to
perform an existing contractual duty to supply goods or services confers an
additional practical benefit on the other party, then, providing that no duress is
involved, it will be sufficient consideration to make a promise given in return
binding. However, the case of Williams is distinguishable from the current scenario.
In the case of Williams, Roffey’s agreement with the owners of the flats contained
a penalty clause, which Roffey would lose out if the project was not completed on
time. Roffey then voluntarily promise to increase the original contract price in return
for finishing the job on time. The courts in this case held that the promise made was
enforceable as it was not provided for under duress. Contrastingly, in the present
case, if your lordship / ladyship could please refer to PARAGRAPH 10 of the mooting
problem, it can be seen that the appellants threatened the respondent that they
would abandon the project if the respondents do not comply with their request for
an additional payment of RM 10 million. The promise made by the respondents on
30th August 2022 for the completion of the project in return for an additional
payment of RM 10 million, was extracted on the basis of economic duress. The
appellants took advantage of the situation as they knew that by threatening to
abandon the project just a month before handing it over to DBKL, the respondents
would feel trapped and compelled to meet the appellants' demand for an extra RM
10 million. The appellants strategically used the project's critical timing to force the
respondents into agreeing to their terms. Hence, the respondents promise to pay
the additional RM 10 million, is not sufficient consideration and cannot be enforced
as the promise was extracted through economic duress, contradicting the principle
of Williams v Roffey.
