The news report discusses a breach of contract and constitutional suit filed by the Kelantan government against Petronas over Petronas' failure to pay oil royalties to the state. The High Court granted applications by the Federal Government and Petronas to determine issues of law in the suit without a full trial. Among the legal issues to be considered are whether Kelantan has rights over petroleum extracted in its continental shelf area and if it is entitled to payments. Damages are a possible remedy for breach of contract. The case involves Petronas allegedly failing to make cash payments owed to Kelantan for oil obtained offshore since 1998, constituting a failure of consideration and breach of agreements between the parties.

1. QUESTION 1
I bought a pair of women sport shoes: Adidas Duramo 7 WMNS AQ6503 (Item ID:
182471394) which is blue in colour for RM 230 from a vendor named luxurygig at
https://www.lelong.com.my/adidas-duramo-7-wmns-aq6503-luxurygig-I5359646-2007-01-Sale-
I.htm.
The status of advertisements in Lelong.my are all invitation to treat. Invitation to treat is
any form of statement that is in negotiation process before contract is made or in other words
invitation to another party to make proposal. Advertisements in Lelong.my are considered
invitation to treat as buyer can confirm all the details he would like to know about the product he
is interested in and then decide whether or not to purchase the product.
An advertisement is considered a bilateral contract as it requires at least two persons to
make a contract where negotiation, proposal and acceptance will occur. The seller is said to be
making a proposal when he put a particular product on sale in the website. The seller has to wait
until there is response from a buyer who is interested in buying his product and willing to be bound
by the terms of buying that particular product to successfully make an agreement. A buyer is said
to have made acceptance when it is clear and definite that he decided to purchase the product put
on sale by the seller after he clicked on “Buy Now” button and proceed to checkout.
After filling in all the details needed, consideration have to be given by the buyer to the
seller in monetary form known as payment, as that is the next thing after proposal and acceptance.
For a Lelong member who had a registered Lelong.my account, he can login his account and then
make payment. There are many payment methods such as Visa/ MasterCard, Maybank2U, CIMB
Clicks and Hong Leong Bank. Then click “Pay Now with “NetPay” button. Direct bank-in or cash
deposit is also possible. For a Non-Lelong member, bank in directly to the account provided while
for online transfer, key in email address: pcbyte14@gmail.com in the email address field so seller
will receive notification from Online Banking System.
Payment will be processed in 1-3 business days and seller will arrange to ship out buyer’s
orders upon receiving payment. Buyers are required to arrange payment within 7 days of purchase,
or the purchase will be treated as an unpaid transaction. A seller should state clearly on its website
the precise time and means by which acceptance will take place. This may be when the seller
acknowledges the receipt of the email acceptance or when the product is delivered. The order
process time is 1 to 3 working days. If there is anything that cause the shipment delay, seller will
email buyer to inform. If buyer do not receive the item within estimated working days after the
item is shipped, email to @ ebestseller.lelong@gmail.com. Item will be shipped after payment
received via Pos Laju, GDEX, TA-Q-BIN or other courier services. For Sabah/Sarawak, if the
shipping weight for an item is 2kg or above, it will be shipped by Pos Parcel / Registered Parcel.
Delivery by Courier Services (Pos Laju / GDEX / TA-Q-BIN) to Peninsular Malaysia will take 1
to 3 business days whereas to East Malaysia take 3 to 4 business days from delivery day. If item

2. is delivered by Pos Parcel / Registered Parcel, East Malaysia will take 5 to 8 business days from
delivery day but this service is not applicable in Peninsular Malaysia.
According to Lelong.my’s buyer protection rights, all the items are delivered in good
condition. If there is ready stock available, delivery can be made within 1 - 2 working days.
Lelong.my reimburses buyer the full purchase price of the item if buyer did not receive the item.
Buyer may seek for refund if the item is out of stock which takes 2 - 3 working days or if refund
via netpay, takes up to 14 working days for bank to reverse fund. A claim of compensation with a
maximum of RM 1, 000 for one transaction can be made by initiating it no sooner than 30 days
and no later than 45 days from the payment date. Besides, Lelong.my do not sell or rent personal
information to third parties for their marketing purposes without explicit consent and only use
information provided as described in the Privacy Policy.
References
https://www.lelong.com.my/
https://www.lelong.com.my/adidas-duramo-7-wmns-aq6503-luxurygig-I5359646-2007-
01-Sale-I.htm#
https://www.slideshare.net/nuraisyahbintidaud/business-law-12996549
http://help.lelong.my/how-to-buy-2/
http://www.lelong.com.my/merchant/Default.asp?UserID=ictcentury&show=Payment

3. QUESTION 2
Thursday, 19 January 2012 | MYT 12:00 AM
High Court to consider issues of law
on oil royalty
BY M. MAGESWARI
KUALA LUMPUR: The High Court has granted applications by the Federal Government and
Petroleum Nasional Bhd (Petronas) to hear and dispose of a breach of contract and constitutional
suit on issues of law.
High Court judge Justice Zabariah Mohd Yusof granted leave to both parties yesterday after
hearing lengthy submissions.
The two had applied for the judge to determine the suit on issues of law under Order 14A of the
Rules of the High Court 1980 and Order 33 of the same Rule without going for a full trial.
Senior Federal Counsel Datin Azizah Nawawi acted for the Federal Government, Tan Sri Cecil
Abraham represented Petronas while counsel Ganesan Nethi and Nur Ashikin appeared on behalf
of the Kelantan government.
“Three issues of law have been proposed by the Federal Government for the suit while five
questions have been submitted by Petronas,” SFC Azizah said.
Among the issues was whether the Kelantan government has any rights under the law over
petroleum won and saved in the “continental shelf” and whether it is entitled for any payment in
respect of the concerned petroleum.
Justice Zabariah has set Feb 20 for case management of the suit.
The Kelantan government had on Aug 30, 2010 filed a breach of contract and constitutional suit
against Petronas over the oil giant’s failure to pay royalty to the state.
The state claims in the suit that Petronas had failed to make cash payments, which it claimed
rightfully belonged to Kelantan for petroleum won and obtained offshore since 1998.
According to the statement of claim, Petronas had wrongfully, in total failure of consideration and
in breach of the Petroleum Development Act, the Kelantan Petroleum Agreement and Kelantan
Grant, failed and/or refused to make cash payments to the Kelantan government for petroleum won
and obtained off Kelantan.
Read more at http://www.thestar.com.my/news/nation/2012/01/19/high-court-to-consider-issues-
of-law-on-oil-royalty/#vmgGaBLTLAU7VRCH.99

4. The topic or area of law that is covered by the news report is whether Petroleum Nasional
Bhd (Petronas) had breached the contract and constitutional suit on issues of law.
High court consists of High Court of Malaya and High Court of Sabah and Sarawak. It can
deal with civil claims exceeding RM1 billion (original jurisdiction). It will also deal with appeals
from the subordinate courts and tribunals (appellate jurisdiction). High court deals with calling for
records of proceedings of subordinate courts and removing the cases from these subordinate courts
to the High Court (supervisory jurisdiction) as well as cases which cannot be heard by the Sessions
Court or Magistrates’ Court. High Court also usually follows its own previous decisions in doctrine
of judicial precedent. Based on the report, Petroleum Nasional Bhd (Petronas) and Kelantan
Government had applied for the High Court judge to determine the suit on issues of law under
Order 14A of the Rules of the High Court 1980 and Order 33 of the same Rule without going for
a full trial.
Among the issues proposed by the Federal Government for the suit stated in the report
include whether the Kelantan government has any rights under the law over petroleum won and
saved in the “continental shelf” and whether it is entitled for any payment in respect of the
concerned petroleum.
The possible remedy for breach of contract in this case is damages. Damages are defined
as monetary compensation for losses that are incurred. Damages is a remedy awarded as of right
when a contract is breached. The case is defined in Section 74(1) Contracts Act 1950 as when a
contract has been broken, the party who suffers by the breach is entitled to receive, from the party
who has broken the contract, compensation for any loss and damage caused to him thereby, which
naturally arouse in the usual course of things from the breach, or which the parties knew, when
they made the contract, to be likely to result from the breach of it. For instance, Petronas failed to
pay royalty to Kelantan State which caused Kelantan government to sue Petronas of breach of
contract.
Section 75 Contracts Act 1950 is also suitable for the case as when a contract has been
broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if the
contract contains any other stipulation by way of penalty, the party complaining of the breach is
entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive
from the party who has broken the contract reasonable compensation not exceeding the amount so
named or, as the case may be, the penalty stipulated for. The main of purpose of awarding damages
is to compensate the innocent party for loss suffered due to breach of contract.
Under Section 75 (Exception) Contracts Act 1950, when any person enters into any bail-
bond, recognizance, or other instrument of the same nature, or, under the provisions of any law, or
under the orders of the Federal Government or the Government of any State, gives any bond for
the performance of any public duty or act in which the public are interested, he shall be liable,
upon breach of the condition of any such instrument, to pay the whole sum mentioned therein.
From the report, we know about the oil giant: Petronas’s failure to pay royalty to the
Kelantan state. Petroleum Nasional Bhd (Petronas)’s breach of contract and constitutional suit was
filed by Kelantan Government on Aug 30, 2010. The state claims in the suit that Petronas had
failed to make cash payments, which it claimed rightfully belonged to Kelantan for petroleum won
and obtained offshore since 1998.

5. In conclusion, Petroleum Nasional Bhd (Petronas) had breach of contract and constitutional
suit. Petroleum Nasional Bhd (Petronas) have to pay compensation for the damages that they
breached in the contract.