1. Law of Contract - Tutorial Consideration
Business Law
Law of Contract - Tutorial
Consideration

2. Question 1
Analyse whether a contract exist in the following situations: -
Cindy sold her car worth RM60,000 to Minah for only RM10,000.
(5 marks)

3. Answer Define consideration – s2(d) CA 1950
Explain the relevance of consideration – s26 CA 1950
Explain on consideration need not be adequate – Explanation 2 to s26 CA 1950, Illustration (f) and (g), Phang Swee Kim v Beh I Hock (1964)
Apply the legal principles to the facts of the question

4. Question 2
If a person accepts part payment for a debt owed to him by another person and he opts to waive the rest of the debt owed to him, can he recover the balance later? Discuss
(7 marks)

5. Answer
S64 CA 1950 reads “promisee may dispense with or remit performance of promise”
The Illustration to s64 covers a number of areas
S64 CA 1950 Illustration (b)
S64 CA 1950 Illustration (c)
S64 CA 1950 Illustration (d)
S64 CA 1950 Illustration (e)

6. Question 3
Pak Mat wants to give his land to his daughter, Minah, for her 21st birthday. As Minah will not be paying any money to her father, her father is worried that since there is no consideration for the transfer of his land to Minah, the transfer may be void by virtue of s26 CA Advise Pak Mat

7. Question 4
C rented a house from D. The paint of the house was in bad condition. After C had finished painting the house, D was so pleased with the painting that he promised to pay C RM500 for the painting. Now D is refusing to pay. Advise C
(10 marks)

8. Question 5
In Dec 1999, Johny borrowed RM10,000 from Tony. Johny promised to repay the loan within a month. However, Johny did not repay the loan and Tony went overseas for further studies. He returned to Malaysia last month and demanded repayment from Johny. He refuses to pay. Advise Tony if he could sue Johny to recover the loan
Would it make any difference to your answer if, when Tony demanded repayment, Johny told him that he would repay the loan the very next day but never kept his word?
(10 marks)

9. Answer Issue Law Application Conclusion
Whether Tony can claim the money?
Law
A creditor cannot recover the loan back if he did not sue the debtor within 6 years from the date of breach (s6 Limitation Act)
Application
Based on the fact of the case, the debt is statute barred as Tony did not sue Johny within 6 years
Conclusion
Tony cannot claim the money

10. Answer Issue Law Application Conclusion
Can Tony recover the money if Johny makes a new promise to pay?
Law
S26 CA 1950 – general rule
S26(c) CA 1950 – exception provided
Fresh promise to pay in whole or in part a statute barred debt
Promise must be made in writing and
Signed by the debtor
Application
Though Johny made a fresh promise to pay but the conditions in s26(c) CA 1950 were not fulled
Conclusion
Tony cannot recover the money

11. Question 6 Advise A on the following:
A owes B $ He cannot pay and offers $50.00 and a pen worth $3.00 in full settlement. B accepts but later sues for the balance.
( 3 marks)
A owes B $ He cannot pay. A’s father offers $ and a watch worth $50.00 in full settlement. B accepts but later sues for the balance.
(3 marks)
A organized a faculty ball and approached the local police to keep out “undesirables”. The station sergeant informed him that he would have a patrol car call in periodically during the night. A however, wanted an officer on duty in the hall. The sergeant informed A that it would cost him $ A agreed to this. He now refuses to pay the police.

12. Q & A