...CONFIDENTIAL ALD 2013 / JULY-NOVEMBER 2010 SECTION A (20 marks) Multiple choices 1. Maniam who is 20 years old, was fully drunk when he agreed to sell his 2008 model Perdana to Sim for RM15, 000.00. Maniam can rescind the contract because A. he is illiterate B. terms of the contract are uncertain C. he was confused. D. he was of unsound mind 2. A house is put on auction by James a licensed auctioneer. The reserve price has been fixed at RM95, 000.00. Under the law of contract, James is making A. an offer B. an acceptance C. an invitation to treat D. a special offer 3. When the seller is in breach of the Contract of Sale, a number of remedies are available to the buyer. The following are the remedies EXCEPTA Damages for non-delivery of goods B Specific performance C Breach of warranty D Arrest warrant 4. The law on negotiable instruments in Malaysia is covered by the A. Hire Purchase Act 1967 B. Civil Law Act 1956 C. Employment Act 1955 D. Bills of Exchange Act 1949 1 CONFIDENTIAL ALD 2013 / JULY-NOVEMBER 2010 5. Bob sold his diamond ring worth RM10, 000.00 to Ali for RM100.00. There is a contract between them. This is an issue under: A. certainty of terms B. inadequacy of consideration C. capacity of contract D. intention to create legal relations 6. The purpose of crossing a cheque is A. to give a cheque more value B. to signify to the bank that it is a special cheque C. to prevent fraud D. to make a cheque...
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...CAPACITY TO MAKE CONTRACTS The capacity of certain persons to conclude contracts is restricted by law. The law recognizes that certain people are either wholly or partly incapable to make a contract. The aim of this assignment is to explain and consider the critical legal matters the individuals and organisations have to consider when entering into a contract with these people. Contracts are part of everyday life and every business will need to make a contract and most businesses will have to make very many. Therefore it is necessary for an organisation as well as for individuals to understand that a contract is a legally binding agreement. In order for a contract to be legally enforceable the law demands agreement, consideration and intention to create legal relations (Maclntyre, 2008). It is generally believed that every person can make a binding contract as they wish (Maclntyre, 2008). But because the contract is a legally binding agreement, the law recognises some specific groups who either have not reached the maturity or do not have the capacity to fully understand the nature and extend of agreements that they make with others. Therefore it is important for every organisation and individual to understand that a number of persons have a restricted capacity to contract. These are minors, persons of unsound mind, drunks and corporations (Owens, 2001). All others can make a binding contract as they please. Beale, Bishop and Furmston (2008) argue that the law of minors`...
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...legally binding agreements, certain people are always considered to lack the legal ability (or "capacity") to contract. As a legal matter, basically they are presumed not to know what they're doing. These people--legal minors and the mentally ill, for example--are placed into a special category. If they enter into a contract, the agreement is considered "voidable" by them (as the person who lacked capacity to enter the agreement in the first place). Voidable means that the person who lacked capacity to enter the contact can either end the contract or permit it to go ahead as agreed on. This protects the party who lacks capacity from being forced to go through with a deal that takes advantage of his or her lack of savvy. Let's look at some situations in which a person might lack the legal capacity to enter into a legally binding contract. Minors Have No Capacity to Contract Minors (those under the age of 18, in most states) lack the capacity to make a contract. So a minor who signs a contract can either honor the deal or void the contract. There are a few exceptions, however. For example, in most states, a minor cannot void a contract for necessities like food, clothing, and lodging. Also, a minor can void a contract for lack of capacity only while still under the age of majority. In most states, if a minor turns 18 and hasn't done anything to void the contract, then the contract can no longer be...
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...to understand what the meaning of the term contract is and what and what the requirements are for the formation and dissolution of one. A contract is an agreement between at least two parties giving rise to legal obligations within the limits of the law. The rights and obligations arising from a contract entitle parties involved to receive and demand performance and actions are enforceable by law. Rights and duties are created by the formation of contracts- a right is an advantage entitling the holder to demand that another person should act or refrain from acting. A duty- is a responsibility imposed by law and obliges a person to act or refrain from performing. There are different types of contracts in our legal system which have certain special elements and legal requirements. One of these elements being the capacity to act by each party; which means that the parties involved in the contract must be legally capable of performing the particular act which gives rise to the formation of the contract. According to South African law every legal subject , irrespective of whether he or she is a natural person or a juristic person legally has the capacity to be the bearer of rights and duties, it’s important to note that not every person who has legal capacity has capacity to act. According to (Havenga ,2007:p71) Capacity to act refers to the capacity to perform juristic acts, to participate in legal dealings and to conclude valid contracts, it then becomes clear that only natural...
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...000. The car has now been delivered but she is unable to pay for it. Discuss. First of all, the Law of Contract has been defined as an agreement which is legally binding between the both of parties. A contract simply means an agreement between the parties however the agreement has some important element within as it alone does not stand to have a binding contract. In a contract, there should have all the elements as proposed which will be offer, acceptance of offer, consideration, intentions to create legal relations, capacity, consent, legality and possibility of performance. In this particular situation, the element of capacity is lacking in this contract. Capacity to a contract defines us that parties in a contract must have the capacity to make a contract. In a simpler way, capacity is referred as legal ability to enter into a contract and the law generally states that everyone has the capacity to a contract except for certain circumstances which will be discussed in the following paragraph. Phing is 17 and underage, which makes her legally ‘incapable of capacity’ due to her minor status, and therefore any contracts made by Phing would be void ab initio except for certain exceptions, such as contracts for necessaries, scholarship contracts and insurance contracts. Section 11 of the Contracts Act 1950 is about contracts entered into by those who have no capacity. This section states that a person must satisfy the age of majority according to the Section 2 of the Age...
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...A contract can become a very important and essential part of any agreement between people. “A contract is a legally enforceable agreement that is created when two or more competent parties agree to perform or to avoid performing, certain acts that they have a legal right to do and that meet certain legal requirements”. (Anthony L. Liuzzo, 2010) Capacity means that “in the law sense, denotes some ability, power, qualification or competency of persons, natural or artificial, for the performance of civil acts, depending on their state or condition, as defined or fixed by law; as the capacity to devise, to bequeath, to grant or convey lands; or to take and hold lands, to make a contract and the like”. (The 'Lectric Law Library, 2011) The capacity matters when a contract is going to be written. It can become crucial to know the ability of the other party involved in the contract, this way you have a better understanding of how the agreement will function in the future. The wide-ranging belief of the law is that all individuals have a capacity to contract. A person who is trying to escape a contract would have to plead his or her lack of capacity to contract against the party who is trying to enforce the contract. For example, he would have to prove that he was a minor, adjudged incompetent or drunk or drugged, and so forth. Often this is the most difficult burdens of proof to overcome due to the presumption of one's ability to contract. “In most states, the standard for mental...
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...| Natural Blends Inc. | IE5107 CASE STUDY II | | | 3/21/2013 | 6. Which set of contracts in Table A would you recommend that Natural Blends accept? (a) and (b) * Filtration step determines the cycle time in the system with 90 minutes operation time and 30 minutes set-up time. So, CT = 2 hours (1.5 hours running and 30 minutes idle time). * The bottleneck of the system, Extraction: 20,000 /1 hour + 10,000 /30 min = 30,000 pounds / 2 hours Filtration: 20,000 /1 hour + 10,000 /30 min = 30,000 pounds / 2 hours Concentration: 18,000 /1 hour + 9,000 /30 min = 27,000 pounds / 2 hours So, the concentration is the bottleneck. It can be concluded that hourly capacity of the system is 13,500 pounds. Then, 13,500 x 8 = 108,000 pounds/day 108,000 x 6 = 648,000 pounds/week (weekly production capacity) 6 x 8 = 48, 48 x 60 = 2880 minutes (weekly time capacity) * Hence, the total capacity of contracts should be less than or equal to the weekly capacity and also should satisfy the time limit capacity. * It is known that blending capacity is 22,000 pounds/ hour and needs 40 minutes set-up time. Depending on this, process time for all contracts is presented in Table I: Contract | Quantity per order/pounds | Time for 1 order/minutes | Time for total orders/minutes | A | 8,000 | (8,000/22,000)x60+40=61.6 | 61.6x24=1466 | B | 16,000 | (16,000/22,000)x60+40=83.6 | 83.6x18=1504.8 | C | 24,000 | (24,000/22,000)x60+40=105.4 | 105.4x15=1581 | D | 18...
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...enter into a legally binding agreement, consideration and capacity to contract. If any of the five elements are missing from any contract, then it is either void or voidable. Rules of intention to enter into a legally binding agreement, and consideration are two elements which need to be apparent before a contract will be seen as legitimate in front of the law. Consideration is the idea of value in law. It can be a promised action or the omission of an action that the parties to a contract agree upon. Consideration can take the form of money, physical objects, or a forbearance of action. In this example, EC sells the stove and the stereo for Rp 20 million. The consideration from EC is the stove and the stereo and the consideration from Gabriela is the Rp 20 million which is on credit. Consideration alone is not enough to create a legally binding contract; the parties must also have the intention to create legal relations. Rules of intention refer to the final element necessary for a contract. This intention to enter into a legally binding agreement needs to be established because when contracting parties don't consent to the legally binding relationship the contract is not enforceable. Often, the intention to create legal relations is expressly stated by the contracting parties. In other situations, the law will readily imply the intention, because of the nature of the commercial dealings between the parties. Legal capacity of persons refers to their status or capability to enter...
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...Elements of a Contract Week 3 Assignment Bus: 670 Legal Environment Micah Blount Prof. Jennifer Stephens February 17, 2014 Introduction The goals of a contract are to ascertain the concord that the parties have prepared and to allot their privileges and responsibilities in accordance with that contract. The legal courts should implement a legitimate contract as it is created, unless there are basis that affect its enforcement. It is the purpose of the decree to promote the development of contracts between capable parties for legal rationales. As a universal statute, contracts by able parties, justifiably prepared, are compelling and enforceable. The provisions to which they have settled force persons to a contract. The purpose of this paper is to determine whether the contract in question is legally bidding. Many people call contracts “agreements”; however, I prefer the term contract, because it can mean one or more agreements within the contract. In contract, word “agreement” sounds as though only one agreement was made. A contract is formed when two or more persons or “parties” (hereafter party) agree to do, or to refrain from doing, something; and each party has some sort of stake in the outcome. In other words, one party cannot provide all the benefits while the other party provides nothing. For a valid contract to be formed that is enforceable by a court, each of the following criteria must be present: offer, acceptance, consideration, capacity, and legality...
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...INTRODUCTION The contract law principles in Shariah Law are not different from English contract law principles. In English law, ‘contract is an agreement enforceable by law’. According to Islamic law, a promise may not be legally enforced although it is strongly recommended by religious and moral values to be fulfilled.[1] In Islamic law, contract is known as ‘aqd’ which means tie or bond. It means a contract binds the parties together. From the definition, the term ‘aqad is more or less of the equivalent of the technical term of contract in Western Jurisprudence. However, ‘aqad does not necessarily involve agreement (which is a necessary element in a conventional contract) because the term is also used to describe a unilateral juridical act which is binding and effective without the consent of the other party. Islam emphasizes on fulfilling contractual obligations. Allah says in the Quran, “O ye who believe, fulfil all of your obligations”[2] and also similarly in this surah which is stated “…So fulfil your engagement with them to the end of their term, for Allah loves the righteous”[3] Under Islamic law, to be a valid contract, there must have some elements in the contract. Those elements are sighah (ijab and qabul), contracting parties and subject matter. The first element is sighah (ijab and qabul) or offer and acceptance. There are three kinds of offer which are verbal offer (kalam), offer by conduct (‘amal’) and offer in writing...
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...TOPIC 4: INTRODUCTION TO CONTRACT LAW — ESSENTIAL ELEMENTS OF A CONTRACT — STEPS 3, 4 AND 5 Please remember to check your Bulletin Board. • Chapters 5 and 6 of Turner. • Chapters 5 and 6 of Gibson (optional). Learning objectives After you have completed the readings for this topic you should be able to: > define consideration and be able to identify when it is present; > explain and apply the legal principles relating to consideration; > explain the difference between past, executed and executory consideration; > explain and apply the doctrine of promissory estoppel; > identify contracts which must be in writing; > recognise the classes of persons who have limited contractual capacity and describe the effect that each has on simple contract; > outline the common law rules regarding contracts entered into by infants and which can be valid, voidable or void; > summarise statutory changes to the common law made in NSW and SA in relation to infants; and > outline the common law rules with regard to capacity to contract with respect to corporations and bankrupts, the mentally ill and those under the influence of alcohol. Graduate School of Business 4:2 Step 3: Consideration Consideration is something for something. Put another way, it is the price the promisee pays for the promise. For example, in the case of the purchase of a house, it is that house in exchange for the purchase price. Consideration makes the agreement in a commercial bargain. A person...
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...“Contracts made by minors are void”. Explain this statement and discuss its exceptions. Contracts entered into by a minor, one below the age at which state law deems persons to possess capacity to contract, currently 18 years old in most states are generally voidable by the minor-party, even if he misrepresented his age. A minor can furthermore avoid contractual obligations for a reasonable time after attaining the age of majority. However, if he fails to disaffirm within a reasonable time, the contract will become binding against him. Disaffirmance: Disaffirmance is a contractual obligation, setting aside, or a legal avoidance. For a minor to disaffirm, he or she must declare in words or in oneself, a reason not to be destined in to an agreement of a contract. They must stop the whole agreement, not just a small part of it. Minors must return all of the products that they have, not just the ones they do not want. If there, is a third party (adult) involved and have some of the products, the minor can ask for it back to return it to where he or she bought it. Once a minor reaches, the age of maturity, the court will give them two months or in some states one year to disaffirm. If the minor refuses to disaffirm, the courts will ratified it. Ratification is the act of accepting and giving legal force to an obligation that previously was not enforceable. If an adult is in this court case, they will have to be bound to it and pay. In...
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...This issue is governed under the Law of Contract, under the formation of contract and the revocation of a contract specifically under contractual capacity. Contractual capacity states that young persons aged sixteen and seventeen have full legal capacity. This protects young persons against ‘prejudicial transactions’ until they turn 18 and any contracts like this can be put aside by the court. However, there are exceptions to the rule: if under 18 and running your own business; if ratified before turning 18; if age is misrepresented when entering contract. In this case, Jean is seventeen, running her own business and wants to get out of a legally bounding contract for an object in which has already been ordered. However, Jean cannot get out of the contract just because she is under eighteen years of age because she is running her own business and therefore she is not subject to the protection anymore. Therefore, this puts her in the same legal position that any other adult would be in, in her situation. She could attempt to revoke the offer by emailing or writing to the seller but she is still legally bound by the contract made. Q2) This issue is governed under the Law of Contract, under the formation of contract and specifically contractual capacity. Contractual capacity states that generally children under sixteen years of age have no capacity and the contract is void. However, the exception to this rule that would make the contract valid; if transaction is commonly entered...
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...question 3.5 Page 12- referance Question 1 A minor or referred to as a child is any natural person which is any human being under the age of 18 years, this used to be till the age of 21 but has change to the child act38 of 2005. Minor under the age of 7 have no capacity to act this means that they cannot enter into any form of agreement of contract, because a minor under the age of 7 has an inadequate level of development which allows the minor to form sound judgement of contractual obligations, a minor under the age of 7 years cannot even accept an offer of a donation, guardian must act for the child (Peter Havenga, 2010) (Anon., 2014), Mthuli is 6 years old therefor she has no capacity to act an cannot enter into any contract or agreement. A minor over the age of 7 and under the age of 18 year, is capable of the mind they have understanding but no judgement and have limited capacity to act, this means that a minor over the age of 7 and under the age of 18 year have limited capacity to enter into a contracts to because he or she may normally perform juristic act only with the assistance of a guardian with full capacity to act (Peter Havenga, 2010). The children’s act implement that a guardian or parent must help or represent the child in administrative, contractual and other legal matters, also provides that the guardian of a minor must safeguard the minors property and property interest, if there are more than one person who...
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...European Business Law 1! ! Introduction to international business law and elements of contract formation! ! ! ! ! Useful for :! • Business relationships depend upon legally binding agreements! • Being aware of contract traps (avoid business troubles)! Law > Contract Law > French contract Law > International Contract Law (comparative law / Unidroit principles / Vienna Convention) > Common Law ! What is a contract law?! 3 main ideas = A contract is act of Freedom / of Willingness / of Foreseeability! 2 main principles = Principle of obligatory force / of good faith! Problems when negotiating a contract :! Is the negotiator empowered?! Severability or not?! Confidentiality or Non-disclosure agreement! ! A Contract is an agreement between 2 or more parties that is binding in law! ! When does a contract come into force? => Agreement on essential terms! ! BEFORE : Elements of contract formation! ! Offer and Acceptance ! ! ! An offer accepted is a contract / A statement of willingness to contract on specified terms! • Express / implied offer! • Adressed to one particular person, a group of persons, or the world at large! • Offer and Invitation difference to treat (= advertising)! Revocation of an offer : ! • Withdrawal of the offer : An offer may be withdrawn at anytime before acceptance! • Lapse of time :! • Where a time-limit : the offer automatically falls on the expiry of that time-limit! • Where no time-limit : An offer only remains open for a reasonable time! • Rejection...
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