Element of Contract

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Element of Contract by Mind Map: Element of Contract

1. 3. Consideration

1.1. The price one party pays for the other's promise.

1.2. general rule

1.2.1. both parties must give consideration

1.3. Section 26

1.3.1. an agreement without consideration is void

1.4. Section 2(d)

1.4.1. When, at the desire of the promisor, the promisee @ any other person:

1.4.1.1. i. has done or abstained from doing

1.4.1.2. 11. does or adstain from doing

1.4.1.3. 111. promises to do or to abstained doing

1.4.2. something, such act or abstinence or promise is called a consideration for the promise

1.5. Type of consideration

1.5.1. 1. executory

1.5.1.1. is promise in returnfor a promise

1.5.1.2. cases : K. Murugesu v Nadarajah

1.5.2. 11. executed

1.5.2.1. is a promise for an act

1.5.2.2. when act is performed in return to a promise

1.5.2.3. cases : Carlill v Carbolic Smoke Ball Co

1.5.3. 111. past

1.5.3.1. is a promise made subsequent to & in return for an act that has already been perfomed

1.6. Element of consideratioin

1.6.1. a. Consideration need not be adequate

1.6.1.1. section 26 explanation 2

1.6.1.1.1. an agreement to which the consent of the promisor is freely given is not void merely because of the consideration is inadequate, but the adequacy of consideration may be taken into account by the court in determining the question whether the consent of the promisor was freely given

1.6.1.2. cases : Phang S wee K Im v Beh I Hock

1.6.2. b. past consideration is a good consideration

1.6.2.1. section 26 explanation 2

1.7. exception to the general rule

1.7.1. 1. is made out of natural love & effection

1.7.1.1. Section 26(a)

1.7.1.1.1. the agreement must fill the following condition

1.7.1.2. cases : Re Tan Soh Im (1951)

1.7.2. 2. is to compensate for past voluntary act

1.7.2.1. section 26(b)

1.7.2.1.1. the promisor promises to give something to the promisee because the promises has done something voluntarily before the promise was made

1.7.2.2. condition

1.7.2.2.1. a promise to compensate either wholly or partly to promisee

1.7.2.2.2. promisee did the act voluntarily

1.7.3. 3. is to compensate an act the promisor was legally compelled to do

1.7.3.1. section 26(b)

1.7.3.1.1. the promisee has voluntarily done an act

1.7.3.1.2. the act was an act the promisor was bound/compelled to do

1.7.3.1.3. it must be to compensate,wholly/partly the promisee for the act

1.7.4. 4. it is to pay a statute-barred debt

1.7.4.1. section 26 (c)

1.7.4.1.1. although a debt cannot be recovered because of the statute-barred, it can be recovered if

2. 2. Acceptance

2.1. Section 2(b)

2.1.1. when the person whom the proposal is made signifies his assent, the proposal is said to be accepted, becomes a promise

2.2. Section 2(c)

2.2.1. The person accepting the proposal is called promisee

2.3. Elements of Acceptance

2.3.1. 1. Acceptance must be absolute and unqualified

2.3.1.1. section 7 (a)

2.3.1.1.1. to become a promise an acceptance must be absolute & unqualified

2.3.1.2. if parties still negotiating, an agreement is not yet formed

2.3.1.3. the promisee must accept the term proposed by the promisor without any modification @ variations.

3. 1. Proposal

3.1. there must one party make the proposal (offer) and one party make the acceptance.

3.2. Section 2(a)

3.2.1. When one person signifies to another his willingness to do or abstain from doing anything he said to make proposal

3.2.2. Section 2(b)

3.2.2.1. When the person to whom the proposal is made, signifies his accent thereto, the proposal is said to be accepted

3.3. type of proposal

3.3.1. Unilateral proposal

3.3.1.1. one sides where only one party make promises to offer payment in exchange of an act

3.3.1.2. eg. advertisement of lost cat

3.3.1.3. one party is obligated to reward the other party on performing an agreed duty

3.3.1.4. not bind the person who read the advertisement

3.3.1.5. when this agreed duty is performed as agreed upon on the contract, the other party is required to fulfill their part by making the agreed payment

3.3.2. Bilateral Proposal

3.3.2.1. a contract of agreement involving 2 @ more parties

3.3.2.2. binds all the parties to bond with their obligation

3.4. How offer can be made

3.4.1. Section 9 CA

3.4.1.1. So far the proposal or acceptance of any promises is said to be express. so far as the proposal or acceptance is made otherwise than in words, the promise is said to implied

3.5. communication of proposal

3.5.1. proposal must be communicated & complete

3.5.2. Section 4(1)

3.5.2.1. a communication of proposal is only complete when it comes to the knowledge of the person to whom it is made (offeree)

3.6. to whom can proposal be made

3.6.1. particular person

3.6.1.1. When the offer is made specially to a person to whom it is addressed, only that person can accept the offer and no one else can take his/her place to accept the offer

3.6.1.2. case : Boulton v Jones

3.6.2. General public

3.6.2.1. the offer is made to the public at large and is addressed to anyone who can and would satisfy all the terms or condition of the offer stipulated by the offer

3.6.2.2. cases : Carlil v Carbolic Smoke Ball Co

4. 4. Legal capacity

4.1. section 10 CA

4.1.1. all agreement are contracts if they are made by free consents of parties competent to contact

4.2. section 11 CA

4.2.1. Every person is competent to contact if

4.2.1.1. 1, who is of the age of majority according to the law to which he is subject

4.2.1.2. 11. sound mind

4.2.1.3. 111. not disqualified from contracting by any law to which he is subject

4.3. age of majority

4.3.1. Age of Majority Act 1971- 18 years oald

4.3.2. a major of 18 can enter valid contract

5. 5. Intention

5.1. purpose

5.1.1. 1. social and domestic arrangement

5.1.1.1. there is presumption that the parties do not intend to create legal relation

5.1.1.2. cases : Balfour v Balfour

5.1.2. 11. commercial arrangement

5.1.2.1. there is strong presumption that the parties do intent to create legally binding contact unless otherwise stated

5.1.2.2. cases : Rose Fank v Crompton Bros,

6. 6. Cetainty

6.1. section 30 contaracts act

6.1.1. agreement, the meaning of which is not certain or capable of being made certain are void.

6.2. uncertainty issue

6.2.1. 1. language used is too vague where normally it will be not concluded agreement

6.2.2. 11. fail for incompleteness/failure to reach agreement on a vital or fundamental term of an agreement

7. 7. Free Consent

7.1. basis of the contractual relationship

7.1.1. section 10(1) CA

7.1.1.1. all agreement re contarct if they are made by the free consent of parties competent to contract

7.1.2. section 14

7.1.2.1. consent is said to be free when it is not caused by

7.1.2.1.1. coercien - section 15

7.1.2.1.2. undue influence - S.16

7.1.2.1.3. Fraud - S. 17

7.1.2.1.4. misrepresentation - S. 18

7.1.2.1.5. mistake - S. 21, 22 & 23