Elements of contractOfferAcceptanceIntention to create legal relationsConsiderationCertaintyCapacityConsentLegality
Offer Section 2(a) of the Contract Act 1950 Preston Corpn Sdn Bhd v Edward Leong& Ors.  2 MLJ 22 Its terms and its addressee Carlil v Carbolic Smoke Ball & Co.Ltd 1 QB 256 Medical firm advertised that its new wonder drug, a smoke ball. Mrs Carlil used the product and still caught influenza, she sued. Held: an offer can be made to the world. In this case, there was an acceptance of the offer by the plaintiff‟s conduct, Affin Credit (Malaysia) Sdn. Bhd v Yap Yuen Fui  1 CLJ 62 Raffles v Wichelhaus  2 H & C 906 Ahmed Meah & Anor v Nacodah Merican(1890) 4 KY 583. There was an offer in this scenario because of Always Hot Sellers Bhd and Inferno Sdn. Bhd had given an offer to Inferno Sdn.Bhd.
Acceptance Under Section 2 (c) of the Contract Act 1950 state that calls the person accepting the proposal the “promisor”. Acceptance must be communicated; the offeror cannot impose terms on the offeror or stipulate that silence will amount to acceptance. Felthouse v Bindley (1862) 11 CBNS 689 Lau Brothers & Co v China Pacific Navigation Co. Ltd (1965) 1 M.L.J.1 Hyde v Wrench (1840) 49 ER 132 Malayan Flour Mills Bhd v Saw Eng Chee & Anor  1 MLJ 763 HC Based on the scenario, there was an acceptance apply in the process. If there wasnt acceptance exist in the process. Inferno Sdn. Bhd would hadnt purchased oven and figured out the oven couldnt achieve the temperature as the party has claimed.
Consideration Section 2(d)of the Contract Act 1950 Valuable consideration „something for something‟ Three types of consideration (i) executory consideration (ii)executed consideration (iii)past consideration Chappell & Co Ltd v Nestle Co Ltd  AC 87 Nestle purchaed single record of song, which is copyright owned by Chappell & Company Nestle offered a record to customers who sent a certain hunber of chocolate bar wrapper Chappell sued and he offered for not only 1sh 6d but 1sh 6d and three chocolate wrappers Nestle argued that the three wrappers were not part of the consideration Held: The court held that the wrappers were part of the consideration for the chocolates although they were immediately discarded when received.
Phang Swee Kim v Beh I Hock MLJ 383 Thomas v Thomas  114 ER 330 Stilk v Myrick  EWHC KB J58 In this scenario, there was a consideration. Both parties are willing to receive a benefit and suffers a detriment.
Intention to create legal relation An agreement supported by consideration Intention of a party to become legally bound Participants to an agreement intended the agreement to be legally enforceable Domestic and social life agreement Do not intend to create legal relation Balfour v Balfour 2 KB 571 Mr. Balfour had promised to pay her wife £30 a month for maintenance during the time they were live apart. After they separated, Mrs. Balfour sued him breach of agreement Held: The court held that no legal relations had been contemplated and that the wife‟s action must failed. Pettitt v Pettitt  AC 777 Jones v Padavatton  EWCA Civ 4
Commercial and Business agreement Intended to created legal relations Rose and Frank Co v Crompton Bros AC 445 Snelling v John G Snelling Ltd QB 87 In this scenario, there was an intention to create relations. Both parties had provide the consideration and had made an agreement.
Capacity Section 11 of the Contract Act 1950 Prima facie the law assumes that all parties to a contract have the power to enter into that contract Under the Age of Majority Act 1971 stated that every person is competent to contract who is of the age majority according to the law to which he is subject Mohori Bibee v Dhurmodas Ghose (1903) 30 IA 114 And been adopted and applied in Malaysia in the case Tan Hee Juan v The Boon Keat  FSMLR 36 The court held that plaintiff who is a minor transfers of land by minor is said to be void. contract for necessaries under Section 69 of the Contract Act 1950 Imperial Loan v Stone  1 QB 599 Government of Malaysia v Gurcharan Singh @ Ors  1 MLJ 211HC In the scenario, there was no capacity. Both companies are mature enough to do business on their own risks.
Certainty Section 30 of the Contract Act 1950 Every term of an agreement must be certain or capable of being ascertained. If not, the contract may be void. Hillas & Co. Ltd v Arcos Ltd  38 Com Cas 23 the fact is there was an agreement in writing for the wood during 1930, together with an option There was a certainty apply in this case, because Always Hot Sellers Bhd agreed to sell and given a guarantee that the oven would have a temperature of not lower than 1500º c.
LegalitySection 24 of the Contract Act 1950 state that the consideration or object of an agreement is unlawful if falls within any of the subsections of the section.Based on the scenario, there was legality. During the whole process, they were dealing in proper way and doing legal business which selling cooking oven.
Consent Section 10 of the Contract Act 1950 states that consent must be freely given Section 13 of the Contract Act 1950 defines consent to mean two or more persons are said to consent when they agree upon the same thing in the same sense Section 14 of the Contract Act 1950 states that consent is free when it is not caused by one or more of the following: Coercion Undue influence Fraud Misrepresentation Mistake
Misrepresentation Section 18 of the Contract Act 1950 states that misrepresentation is an untrue statement of fact A statement made without the intention to perform A statement of fact if the maker of the statement did not hold it Derry & Ors v Peek (1889) LR 14 App Cas 337 Nocton v Lord Ashburton  AC 932 Hedley Byrne & Co Ltd v Heller & Partners Ltd AC 465 In this scenario, there was a misrepresentation because of Always Hot Sellers Bhd is a public limited company for doing business which they were authorized to transact and it is professed to sell its products. On the other hand, which a reasonable man would know that it was being trusted or judgment was being relied on. However, it transaction object is corporation company. Which is not good for it if it is the intention to be cheat.
Mistake Section 21 of the Contract Act 1950 Where both parties to an agreement are under a mistake as to a matter of fact essential to the agreement, the agreement is void. Mistake as to identify of the subject-matter Falck v Williams  AC 176 In this scenario, there was a mistake as to the identify of the subject-matter when Always Hot Sellers Bhd had given a guarantee that the oven would have a temperature of not lower than 1500ºc. However, Inferno Sdn.Bhd received the oven, it could not be reach a temperature of 1000ºc, so the mistake occurred on Always Hot Sellers Bhd.
Remedies Damages under Section 74 of the Contract Act 1950 Defines as compensation for damages, loss or injury he has suffered through a breach of contract. Can divided into 2 parts:(i) Remoteness Hadley v Baxendale  EWHC J70 The court held that the jury awarded of £25. Victoria Laundry ( Wisdsor ) Ltd v Newman Industries Ltd  ALL ER 997(ii) Measure of damages Payzu v Saunders  2 KB 581 The court held that the plaintiff had permitted himself to sustain a large measure of the lost which, as prudent and reasonable people, they ought to have avoided. East Asiatic Co Ltd v Othman  2 MLJ38 Based on the scenario, there was remedies for damages. Since Always Hot Seller Bhd has given a guarantee that the oven would have a temperature as they claim but it wasnt able to achieve the temperature. So inferno Sdn Bhd has a very reasonable to sue for damages and claim what they desire to get from that incident.
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