main elements constituting a vaild contract

The word 'rules' has been given many meanings. The higher being is the state and the inferior being is the average person. The sanctions or punishments include imprisonment, fines, damages and injunctions. In our country Malaysia, National Constitution declares itself as the supreme legislation of the Federation. Hence, to place it modestly, law may be defined as a body of rules which can be enforced by their state. Furthermore, legislation save from harm the basic person rights and liberty such as liberty, equality and flexibility of talk. It avoid individuals in powerful positions from taking an unreasonable good thing about other people and ensures a harmless and peaceful world, in which specific rights are conserved, rules has develops as the norms and needs of contemporary society changes. Malaysia practices Parliamentary democracy with Constitutional Monarchy, wherein the Yang Di-Pertuan Agong (Ruler) is the Paramount Ruler. The constitution of Malaysia divides the authority of the Federation into three branches, particularly Legislative, Administrative or Exec and Judiciary.

Definition for question 1

Contracts aren't only relevant to business but are also part of our daily life. A agreement is made from the simple act of purchasing a newspaper, using a visa or mastercard to buy a dress or paying a car parking fee. Other agreements including the sale and buy of property are additional organic, necessitating formal written documents. Rules, is merely restless with the fulfillment of certain conditions by the people so that the trades can be standard as officially binding contract and enforceable. Section 2(h) of CA 1950 state governments that 'an contract enforceable by law is a agreement'. The best contract, in conditions of enforceability, has an offer, acceptance, consideration for the exchange, clearly places out the conditions of the arrangement without doubt, and is also signed by the engaged people with appropriate capacity to enter the contract. Hence, a deal can be defined as an agreement the law between two or pre get-togethers to do or to avoid doing some work/acts, their motive being to build legal relation rather than purely to switch mutual promise to give something of value as account for just about any benefits produced form the contract. Thus each of the celebrations to a agreement wants or needs something the other get together has in its capacity to give, and each one of the parties is eager to give up something of in order to make safe the actual other get together has.

Basic Components of a Valid Deal an Overview

From the definition above, it may be concluded that the foundation of a agreement is arrangement between parties. As a result, the lifetime of other elements is also required to allow an agreement to transform into a deal and make it enforceable in laws.

For a valid agreement, the basic elements that need to are present are:

Agreement (comprising offer and approval): The lifetime of an offer and an popularity are a means of analyzing the process of negotiation to decide whether a contract has been made and when so, when it was made. Mutual assent of the people is the essential of an arrangement.

Consideration: This is the value given by the gatherings for the promises that is being made. Usually account takes the proper execution of money, property and services.

Capacity: Only celebrations who've capacity have the ability to type in the intro a valid and enforceable deal. People who are under years of have serious mental disability don't have legal capacity to enter into contract.

Consent: In the event the gatherings do not go into onto the arrangement willingly, the arrangement could be thought to be invalid. Genuine consent into a agreement can be affected by lots of issues. For instances, during the contractual negotiations, there might have been:

Undue influence

Mistake regarding the conditions and identify of the person


Unconscionable conduct

Duress or coercion.

Certainty: All of the terms of your agreement should be clear and exact in a way that the gatherings know they are agreeing to.

Legality: any agreement to violate regulations or any contract forbidden by law is void. Contracts are illegal for two reasons: first of all, because their subject is illegitimate: secondly, because although the thing is perfectly legal, the manner of so that it is is illegal.

Figure of basic elements of a valid contract:

Formation of a contract




Intention to set-up legal relations






Agreement, the functions must agree on the protection under the law and obligation to be created under the deal. Arrangement that is reached through an activity of offer and approval is a primary part of any contact since it requires consents advertisement idem, the appointment of the minds of the functions ingoing in to the contract. Including the model circumstance was Affin Credit (Malaysia) Sdn Bhd v Yap Yuen Fui (1984), the Federal government Court presented that where there is no offer and acceptance, the purported hire-purchased arrangement was declare void belly initio, and the arrangement was void right from the start. Thus it can be seen that 'arrangement' forms the basic of deal - when there is no valid agreement to commence with, there can no be no valid contract at all. It is important that an contract determine a contractual romance, meaning it is vital for the get-togethers to be able to explain when an offer has been made so when the offer has been accepted. Offer proposal, also under the arrangement, the person making the offer or proposal is named the 'promisor' or offeror. The individual to whom the proposal or offer is being made to is recognized as the promisee or offeree. If this person accepts the offer, then he's also called the acceptor. An offer is referred to in s 2(a) of CA 1950 as a proposal which is manufactured when 'one person implies to another his determination to do or avoid doing anything, with a view to obtaining the assent of that other to such work or abstinence'.

Acceptance, for a contract to be valid, there must be a proper popularity by the offeree. Section 2(b) of CA 1950 provides that when by offeree implies his assent to the offer, the offer is reported to be accepted. Rules of an valid acceptance, if the acceptance of any promises is manufactured in words, the assurance is reported to be express, if the acceptance is manufactured apart from in words, the guarantee is said to be implied: s 9, CA 1950.

Intention to produce legal relations, an agreement reached between an offeror and an offeree is a legally binding contract only when the parties expected that they must be legally obliged. The parties' motive to be bound can be specifically explained or be implied from other actions. Where goal is expressly mentioned, the courts wouldn't normally impure usually unless there is certainly strong proof to establish the in contrast. In social and domestic agreements between relatives and buddies, there is a presumption that these agreements aren't designed to be legally binding unless the in contrast can be proven. In Balfour v Balfour (1919), the spouse visited work in Ceylon and agreed to pay his better half 30 monthly. He didn't pay the amount of money and the better half sued. It had been held that there is no deal because the functions didn't plan to generate a legal relationship.

In business and commercial agreements, which are more formal in mother nature; you can find presumption that there is intention to produce legal relationships. Also, the intention to exclude legal repercussions must be see out obviously in unambiguous words. The onus of confirmation is on the party who alleges that no legal effect is intended. Edwards's v Skyways (1964), the plaintiff who was a pilot was made redundant by the defendant. Ha had been enlightened by his pilots' relationship that he'd get an former mate gratia payment. The defendant failed to pay to pilot sued. The defendant argued that use of what ex gratia. The court held that arrangement related to business concerns and was presumed to be binding and the defendants had didn't rebut this presumption.

Capacity to long term contract, in order to truly have a valid contract all gatherings to a contract will need to have capacity to enter into a contract. Capacity refers to the legal capacity to go through into a agreement and the law generally assumes that everyone has capacity to contract except certain categories of individuals. Section 11 of CA 1950 presents that every person is skilled to written agreement who are of age majority based on the regulation to which he's subject, of acoustics mind and not disqualified from contracting by any regulation to which he is subject.

Certainty, agreements that aren't certain in interpretation or which the meaning is unable of being made sure are void; s 30, CA 1950. The conditions of an contract ought to noticeable, correct and certain. It cannot be vague. An arrangement which is ambiguous and uncertain is unable to be accepted as a valid deal. In Karuppan Chetty v Suah Thiam (1916), the agreement was announced void as the phrase to last 'for last long as he desires' holds uncertain meaning.

Legality, even where all the requirements of an valid contract talked about above today's, a deal may be illegal and so unenforceable. Section 24 of CA 1950 further provides that the next consideration and things are unlawful such as, it is forbidden by law and nature as to beat any regulation. In addition, it is fraudulent and consists of or implies problems for person or property of another and the court regards it as dishonest, or opposed to public insurance policy. Such agreements might be thought to be void.

Consent, although all the elements of formation may be present rendering the contact valid, in certain circumstances if genuine consent is nit obtained, and then there may be no agreement and no contract between your parties. Even when consent is given, it might not have been openly given. Section 14 of CA 1950 areas that consent is not a free when it is result of coercion, undue influence, scams, misrepresentation, and miscalculation.


In this subject, I had discovered a whole lot of legal things. By the end of this question, I had been search out to identify the fundamental elements required to figure a straightforward and valid agreement, and the factors that can affect its validity as well as how to recognized when agreements has been officially binding. It is rather effective for our future whenever we had starts a business.

Definition of question 2

Remedies that are existed for breach of agreement would depend on the gravity of the effect and impact of the breach. The types of remedies that are available are such as rescission of deal, the agreement is annulled and both edges are excused form further performance and any money advanced is returned. Secondly is the damages, an equitable quantum of money is paid to the plaintiff to pay for any damage. Thirdly goes to specific performance, a court order demanding performance exactly as specified in the deal. This treatment is different, except in real real estate trades and other unique property, as the courts do not want to get elaborate with monitoring performance. Last of all, injunction is a court order directing one get together to perform or to refrain performing a certain take action. It is used more than ever in situations where a monetary prize for damages wouldn't normally fulfill a plaintiff's lay claim or would not protect personal or property right from irreparable harm. A remedy is very important and critical in the legal relations.


What are remedies? Remedies are when a get together to a contract unjustifiably does not declines to execute his part of the agreement; the other party has the right of legal action. The methods which are given by regulations to a innocent party by which he may enforce a right or redress an injury are called 'remedies'. Remedies that exist for breach of deal would rely upon the consequence and impact of the breach. Probable remedies are such as rescission of agreement, injuries, specific performance, and injunction. Equitable remedies are generally remedies apart from the repayment of damages. This might include such remedies as obtaining an injunction, or needing specific performance a agreement.

To begin with rescission of contract, on the breach of your condition of a agreement, the injured get together may treat the agreement as at a finish (or rescinded) and refused to perform or put into practice his part of the deal. When one get together to a agreement has refused to execute, or disabled himself from undertaking his promises in its entirety, the promisee may put an end to the contract, unless he has signified, by words or do, his acquiescence in its continuance; s 40, CA 1950. Someone who rightly rescinds a contract is also eligible for injuries under s 76, CA 1950.

Next, are problems? Section 76 of CA 1950 provides that the injured party or the party that has endured loss has a right to payment for losing or damaged experienced, payable to the breach of agreement and the purpose of damages is to put the innocent party into a position he'd have been, acquired the deal been performed. Such as for example compensatory or common damages, they are damages that are given to be party who has suffered loss induced by the breach of contract. The overall position with regard to damages for breach of agreement is that damage may be improved so long as they aren't too remote. Within the other words, damages might only be retrieved in the relevant losses for example come up naturally consequently of the breach or don't take place naturally but are loss which are celebrations knew, at the time they made the contract, would be probable result of the breach. This concept stems form your choice in Hedley v Baxendale (1854) and it is also provided in s 74(1) of CA 1950. Just how many kind of damages that under ruined? For example, exemplary injuries, liquidated damage, and nominal problems, and so forth. Start with the exemplary damage, these damages are problems that required and/or honored by the court docket when the defendant's willful works were destructive, violent, oppressive, deceptive, wanton, or grossly reckless. These damages are awarded both as a punishment and to place a general public example. Although often requested, exemplary damage are infrequently granted. Next to liquidated injuries, liquidated damages are monetary compensation whose amount the parties agree upon during the formation of an agreement for the hurt party to take together as reimbursement if a particular breach occurs. Problems can be liquidated in a agreement only when the harm is either uncertain or difficult to number, or it might be difficult to establish the loss, or it would be difficult to acquire another adequate therapy. Hence, the amount is sensible and is considered the actual or expected harm triggered by the agreement breach, and the injuries are structured to operate as damages, not as a charges. Hence, of the above criteria aren't satisfied, a liquidated damage clause will be void. From then on is turned to nominal injuries. Nominal damages are damages which consist of a small amount of cash payment which the court orders to paid to the plaintiff who have suffered to quantifiable pecuniary damage. The award assists as a token of honor to the privileges of the plaintiff. Nominal damages is habitually looked for to obtain to legal record of who was at fault.

Specific performance, specific performance is an equitable remedy. It is a specialized cure utilized by the courts when no other cure (such as money) will adequately compensate the hurt party. Furthermore, specific performance is not a typical remedy. If the legal treatment will place the injured get together in the positioning he would have enjoyed acquired the deal been totally performed, then the court use that opportunity to instead. The most common courts give specific performance is the fact that the subject of the deal is exclusive. For instance, Donald offers to market Belle his beachfront house and Belle accepts. Donald subsequently determines to keep carefully the house. Since there is no other house exactly like Donald's house, Belle may be entitled to specific performance of the contract and the courtroom may compel Donald to market the house. Some more, specific performance is governed by the Specific Relief Work 1950. Section 11 of Specific Relief Act 1950 supplies the circumstances whenever a court may offer specific performance:

Where the function agreed to be achieved is within performance, wholly or partly, of any trust.

These is accessible no standard for ascertaining the genuine damage caused by non performance of the work agreed to be achieved.

Where pecuniary performance is an inadequate comfort.

Where pecuniary pain relief cannot be obtained for the breach.

Sections 20 and 21 of Specific Comfort Act 1950 declare that specific performance can't be granted where damage are awarded, the conditions of the deal are uncertain, you can find evidence of scams and the performance of the deal would require hardship on the defendant.

Injunction, an injunction can be an order of the judge restraining a person from doing a specific act in the future. It is granted only when it is merely and equitable to do so having regard to all the circumstances of the case. Specific relief Act 1950, section 50 of Specific Alleviation Work 1950 provides that it's a preventive alleviation granted at the discretion of the courts. In respect of deals, an injunction may be searched for to prevent a party from committing a breach of agreement. For instance, the courtroom may order a vendor be restrained from reselling land to anyone else when owner has contracted to sell that land to the plaintiff. A judge may award damages to an wounded party either in addition to, or in substitution for, an order of injunction.

Quantum meruit, quantum meruit establishes the amount to be paid for services, when no deal exists (a doctor giving emergency help), or where in fact the functions to a contract have failed to agree on a cost, and so forth. When there is an existing agreement for a stipulated amount and the function of payment for services, the plaintiff cannot give up the contract and hotel to an action for quantum meruit. For instance, if a person sues for repayment for services in such circumstances, the court docket will calculate the total amount due based on time and usual rate of pay or the customary charge, predicated on quantum meruit by implying a contract existed.


For the end of this question, I had learned all about the significant and important of the remedies in the legal relations. In this question, I can find out and understand the exchange of benefits and commitments between the gatherings, making the contract enforceable. Furthermore, students can also consider and measure the factors that influence the option of compensation for losses experienced breach of contractual commitments and identify the detailed remedies apart from damages which might be open to the victims of your breach of deal.

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