Law of Contract - Desklib

Running head: LAW OF CONTRACT
Law of Contract
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LAW OF CONTRACT
Question 1 a):
It can be stated that the provisions of Section 77 of the Malaysian Contract Act
1950 deal with the contract of indemnity. The contract of indemnity can be defined as
the contract in which one of the parties to the contract promises to incur the loss
suffered by another (Laidey 2014). However, the loss suffered by the party is as a
result of the act of the insurer or by an act of a third party. Therefore, it is important
that the insured should not in any way make extra profit out of it. In Mario Misfud v.
Montaldo Insurance Agency Limited Noe (2004) it has been held by the Court that
the loss suffered by the insured should be cleared by the Company without deducting
any cost.
b)
In Malaysia, the contract of sale is regulated by the Sale of Goods Act 1957. In
this regard, the provisions of Section 4 of the Sale of Goods Act can be emphasized
which defines a contract of sale. A contract of sale is a contract with the help of which
a seller agrees to transfer the title of the goods to the buyer for a consideration (Amin
et al 2014). It is worth noting that a contract of sale may be both absolute and
conditional. Section 5 deals with the formation of a contract of sale. However, for a
valid contract of sale it is important that there should an offer and acceptance on the
part of the seller and buyer. In Purshotumdas and Co. v Mitsui Bussan Kaisha
Ltd. (1911) 12 SSLR 67 it was held by the Court that the contract of sale of goods is
not valid as there involved no offer and acceptance.
Question 2a):
Section 135 of the Malaysian Contract Act defines an agent as an individual
who has been employed by the principal to perform acts on his behalf. Agents are
sometimes employed to deal with third parties (Mohamad and Trakic 2015). The
provisions of Section 138 of the Malaysian Contract Act 1950 states that how an
agency is formed However, there is no consideration for the creation of an agency.
An agency can be classified into-
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