LAW 416 - Law of Contract (Part 2)

"when the promisee or any other person has done something, such act is called the consideration for the promisee"

• Section 2 (d) CA 1950

• Section 7 (a)

• Section 7 (b)

• Section 8

" is something of value exchange between the parties to a contract. Consideration can be many things such as money, property, service, work performance, or a promise to not do something."
- as long as the parties to the contract exchange something of value between each other.

• Definition of offer and acceptance

• Definition of revocation

• Definition of consideration

• Definition of Invitation To Threat ITT

• * A promise made in return of a promise. It is the promise to perform an action at some future time.

• * Z offers to sell his smart watch to B for RM100. B agrees to pay Z RM100 in 10 days' time.

• Executory (future) Consideration

• Executed (present) Consideration

• Past Consideration

Case : K. Murugesu V Nadarajah

Facts : The appellant agreed to sell a house to the respondent for RM 26,000 within three months from the date of the written agreement. Later the appellant refused to perform the contract and argued that there was no consideration and therefore the contract is void.

• Executory (future) Consideration

• Executed (present) Consideration

• Past Consideration

"when a promise is made in return for the performance of an act. Sometimes, there is no obligation to pay unless or until the performance is completed"

• Executory (future) Consideration

• Executed (present) Consideration

• Past consideration

Case : Stilk V Myrick

Facts : The defendant was the captain of a ship. During the course of a sea voyage, several of the defendant's sailor's deserted (left the ship). The defendant was unable to find replacements. He promised the remaining sailors that if they stayed, he would share the wages intended for the deserters with them. The remaining sailors agreed. However, when the voyage was complete, the defendant refused to pay the extra money.

• Consideration must be sufficient or must have some value in term of money

• Consideration need to be adequate

• Consideration may move from promisee or from any other person

• Something wholly performed before the promise was made

• Executory (future) Consideration

• Executed (present) Consideration

• Past Consideration

Case : Phang Swee Kim V Beh I Hock

Facts : The promisor offered to sell his land at price of RM500 although the land worth much more. Later promisor changed his mind and refused to transfer his land.

• Consideration must be sufficient and must have some value in term of money

• Consideration need not be adequate

• Consideration may move from promisee or from any other person

Case : Venkata Chinnaya V Verikataramaya

Facts : The defendant promised to pay an annuity of 653 rupees to her aunt, the plaintiff. In exchange, the defendant's mother transferred her property and land to her. Subsequently, the defendant declined to pay the annuity, arguing lack of consideration from the aunt. The aunt sued.

• Consideration must be sufficient and have some value in term of money

• Consideration need not be adequate

• Consideration may move from promisee or from any other person.

1. The promise must be made in writing

2. The promised must be registered, if required

3.The agreement must be made betweeen parties in 'near relation' with each other

• Section 26 (a) : An agreement made on account of natural love and affection between parties standing near relation to each other.

• Section 26 (b) : An agreement to compensate for the past voluntary act

• Section 26 (c) : An agreement to pay a statute-barred debt