Chapter 5 - Void Agreements

Question 1

VOID AGREEMENTS

Overview

Answer 1

1) Illegal agreements
2) Contract with minors
3) Restraint of trade
4) Restraint of legal proceedings

Question 2

ILLEGAL AGREEMENTS

Overview

Answer 2

1) When
2) Test
3) Effect

Question 3

ILLEGAL AGREEMENTS

When

Answer 3

S.24 & 25 CA

Question 4

ILLEGAL AGREEMENTS

Test

Answer 4

1) Factors-based approach - Patel v Mirza:

• underlying purpose of prohibition;
• the relevant public policy which has impact on it;
• whether denial of claim is proportionate response to the illegality.

2) Application - Liputan Simfoni Sdn Bhd v Pembangunan Orked Desa Sdn Bhd:

• effect of infringement of the Act is only punishable by a fine upon a conviction;
• therefore, the effect of holding the agreement void is disproportionate to the effect of illegal act itself.

Question 5

ILLEGAL AGREEMENTS

effect

Answer 5

Airfreight Sdn Bhd v Sistem Penerbangan Malaysia Bhd:

1) Prima facie illegal:

• struck-down for illegality;
• void ab initio;
• No restitution under S.66;
• No damages.

2) Both parties intend to make it illegal:

• Considered as illegal in its inception;
• Struck down for illegality.

3) One party intends to make it illegal:

• Void ab initio;
• Restitution - S.66;
• No damages.

Question 6

CONTRACT WITH MINORS

Overview

Answer 6

1) Effect
2) Fraudulent misrep by minor
3) Relief

Question 7

CONTRACT WITH MINORS

Effect

Answer 7

2) Mohori Bibee v Dhurmodas Ghose:
- Void.

Question 8

CONTRACT WITH MINORS

Fraudulent misrep by minors

Answer 8

Mahomed Syedol Ariffin v Yeoh Ooi Gark:

• No action against minor.

Question 9

CONTRACT WITH MINORS

Relief

Answer 9

1) General - Leha binte Jusoh v Awang Johari:
- court makes order for restitution under S.66.
2) Contract for necessaries - Govt. of Malaysia v Gucharan Singh:

• S.69 & necessaries to be construed widely.
• may be entitled to claim or be reimbursed from the property of the minor.

Question 10

RESTRAINT OF TRADE

The law & application

Answer 10

1) The law:
- S.28
2) Scope - Wrigglesworth v Anthony Wilson:
- Once the contract falls within S.28, distance & place in respect of the restriction is irrelevant.

Question 11

RESTRAINT OF LEGAL PROCEEDINGS

The law & application

Answer 11

1) The law:
- S.29
2) Application - Anthony Bourke v CIMB Bank Bhd:
- The clause that restrict the rights of parties to claim for remedies are not enforceable by virtue of S.29.

Question 12

VOID AGREEMENTS

Relief - quantum meruit claim

Answer 12

THE LAW & CONDITIONS

1) The law:

S.71

2) Conditions - Siow Wong Fatt v Susur Rotan Mining Ltd & Anor:

• The work done must be lawful;
• The work done must be for another person;
• The work must not be intended to be done gratuitously;
• The work done must be such that the other person enjoys the benefit of the act.

SCOPE

Syarikat Binaan Utara Jaya v Koperasi Serbaguna Sungai Glugor:

1) When can be can be claimed:

• there is an express agreement to pay a reasonable sum;
• when there is no price fixed, but entitled to be paid a reasonable sum for work done.

2) Situations where it is usually arise:

• quasi-contractual situation;
• work is performed outside a contract;
• work is done under a void contract.