Question-   Contracts Act 1950


Question 1


            Mr. Zain, who is thinking of setting up a business in Kuantan, Pahang, would like to know about the process of how an agency contract may be created in Malaysia. There are some of the provisions in the Contracts Act 1950 that need to be followed accordingly.


            Section 10 Contract Act 1950 states that all treaties are considered agreements if parties' free consensus makes them. Henceforth, both parties should better be willing to respond to the contract which is made in order to make an arrangement as a lawfully compulsory contract. Subsequently, there are some of the factors which can contribute to affecting the agreement once it has been successfully found. These factors, which can contribute to affecting the true consent of one or both revelries, may contribute to releasing the party from the votive compulsion as well. Under Section 13 of the Contracts Act 1950,it’s been evaluated that two more individuals are said to be accord when they agree on a similar thing in a similar sense. Consequently, under Section 14,consent needs to be free, and it should better not be caused by any of the five factors. These five factors include misrepresentation, coercion, mistake, fraud, and undue influence as well.

An agency is usually created through express appointment when the principle contributes to appointing the agent through expressing the agreement with the agent. This express agreement can be written or oral between the agent and the principal. The one exception takes place when the agent is appointed for executing the deed on the basis of the principle. The word agreement right in the lawful arena is considered as the treaty which is enforceable by the law rendering to section 2(b), Contract act 1956.  In contract act section 140,it can be seen that an agent may get authorized by word of mouth for signing the memorandum in Malaysia. Express terms are recognized as the terms which have been particularly agreed and mentioned by both parties at the time when the contract is made.

The formation of the agency contract can also be done using five methods, which include implied appointment, namely express appointment, ratification, estoppel, and necessity. The agency by express appointment can also take place through the contribution of writing and verbally as well. In Malaysia, the law of agency usually is governed by the contribution of Part X of the Contracts Act 1950. Section 135 of the act also contributes in defining the agent as the individual who is employed for doing any act for another or for representing another in the dealings with the third person and the principal, the individual for whom such kind of act is done and who is so signified. The contract of agency is also divided into two, which include the process, which states that a contract among the third parties and principal through an agent. The contract among the agent and principle, where the agent must be attaining the authority of act for and on behalf of the principle as well.


           Mr. Zain is looking forward to setting the business in Kuantan; Pahang would like to know how an agency contract may get created in Malaysia. Section 135 of the actstates that an agency can easily be expressing the appointment, and it can occur verbally and in the written form as well. Mr. Zain has two options as he can make the contract verbally or in written form through the contribution of the agreement made by both parties accordingly. Mr. Zain should also know about the provisions of the contract act, which states that Section 10 Contract Act states that all contracts would be considered as contracts if they are completed by the influence of the free consensus of gatherings. This means that Mr. Zain needs to convince the other party to make an agreement on the similar demand which both of the parties have regarding the contract.

            Both of the parties need to be willing to respond to the agreement, which would be getting made for agreeing as to the legally binding contract as well. The contract needs to be a legally, thoughtful, and voluntary binding agreement among two or more parties, and they need to be competent. Each party in the contract acquires duties and rights which are relative to the duties and rights of the other parties as well. The Malaysian contract act 1950 is recognized as the principal legislation contributing to legislating governing contracts in Malaysia accordingly. Mr. Zain also needs to consider the two ways in which the contract of the agency gets made, which include the contract among the third party and principal through an agent and a contract among the agent and principal where the agent contributes to attaining the authority of the act for and based on principal.


           There are many cases that can be provided as the best examples for supporting the intended scenario. For instance, Summers v. Solomon (1897) AC 22 is the case that contributes to explaining the issue regaridng the way through which an agency contract may get made in Malaysia. The case which can contribute to supporting the provisions of the contracts act includes the case of Re Tan Soh Sim [1951] MLJ 21. These are some examples of the cases that contribute to supporting the cases and identifying their depth as well. `

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