In RM 300 to Jackson. In order to determine


In conclusion, Section 2(d) had said that
Jimmy should make a payment of RM300 to Jackson while Section 26(b) indicated
that Jimmy no need to make payment. By the way, Section 26(b) which is a
specific section will be the section that always prevails than Section 2(d)
which is a general section. So, it is arguable that Jackson is not provided
with a valid consideration. Thus, Jimmy no need to make payment of RM 300 to

In order to determine whether Jimmy needs
to pay RM 300 or not, two section of law is involved. Firstly, the law under
Section 2(d) said that if the act the promised is done by a party, the
consideration is deemed as valid. This shows that there is a valid contract
between these two parties. Thus, Section 2(d) indicated that there is a
contract between Jimmy and Jackson, and Jimmy should make payment of RM 300 to
Jackson as promised. When it comes to Section 26(b), it said that when a
promised to do something had been done, and the person who doing such act is
voluntarily done this, the contract is valid. By the way, the case of Jimmy and
Jackson show that Jackson is requested by Jimmy to fetch him to Melaka and this
indicate that Jackson is not voluntary doing such act. Therefore, in the case
of Jackson is not voluntary fetch Jimmy, the consideration is deemed as not
valid. Thus, Jimmy may not necessary give the transportation fee of RM 300.

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A part from that, one of the elements
which are consideration is involved in the case of Jimmy and Jackson. This will
be the most important element since that it is an indicator to define the
condition of a contract. The case had undergoes executed consideration which is
defined as a party who already guarantee to pay an amount of money for another
party in order to request that particular party to act something. Because of
the executed act, the party who promised to pay the money should achieve that
promise too.  By the way, this case also
proved the existence of past consideration which is the promisee has done
something in the situation that the promisor required.  Therefore, the case shown that Jimmy request
Jackson to fetch him to Melaka with the promised that he will pay RM300. But,
Jackson had not received the payment after the act had done and Jimmy was not
agreed to pay with the reason that he is not seriously when offer such request.

In the case, Jimmy makes an offer to his
nephew, Jackson. Jimmy agreed to rent his level 2 of shop lot to Jackson at the
market value of RM1500 for a month. The tendency contract would be prepared by
Jackson. However the tendency contract has included the RM300 of transportation
fees and rental for the unit of level 1 with the amount of RM1500. So Jimmy
rejected the tendency contract and refused to pay the RM300 for Jackson. From
that, the offer is an acceptance involved performance. In the section 8 of Contract
Act 1950 deals with acceptance by performing condition of a proposal or
receiving consideration of a proposal. However in the case of Doulia v Four
Milbank Nominees Ltd, once offeree has embarked on performance of the condition
and it indicates the offeror cannot revoke the offer. (Anon., n.d.)
Therefore Jimmy should accept the tendency contract which made by Jackson.
Although Jimmy was under impression that the rental for level 1 is RM1500.

For a valid contract, it should consist of
the element of the contract between the two parties. Firstly, there must have
an offer to show the person is willingness to deal or negotiate. (Anon., 2016) The offer is a
promise that not only can be made to one person, but also to the whole world.
The offer must involve of communication by two parties before enter into or
withdraw from a contract. It can be divided into Unilateral and Bilateral
offer. So both parties can make the offer by orally or written form to ensure
the acceptance has been reached. Once the offer has been acceptance by two
parties, the offer would change into contract and cannot be rejected. It means
an acceptance is the final decision to the term and condition of the offer.
Besides that, the intention parties who enter into a contract must intend to
create legal relations. The intention to create legal relations acts as
presumed and the party would not know the term and conditions of the contract.
This contract can or not to be legally bound and is not legally enforcement by
law. (Anon., 2016)
Furthermore, consideration is the price paid by one party to another, in order
to make the valuable promise in the contract. 
(Anon., n.d.)


In conclusion, Jimmy nodded his head but
keep in silence is an act which fall within Section 3 of the Contract Act 1950,
the contract is highly likely valid because the communication of the acceptance
is can be made in writing, or orally or by conduct. Although Jimmy is keep in
silence but he nodded his head, it means Jimmy accept the offer of Jackson.

offeror may give up the need for offeree
in anytime, so that effective communication for the acceptance is important.

In the scenario, Jackson need to
communicate with Jimmy to informed Jimmy he need to rent the level 2 shop lot,
not level 1. The tenancy agreement is stated that Jimmy will rent out his unit
in level 1 to Jackson, it contain mistake in the tenancy agreement. It need
valid contract between Jackson and Jimmy, Jimmy promise to rent the unit in
level 2 to Jackson at RM1,500 and promise to pay Jackson RM300 for the
transportation from Johor To Melaka. Due to

However, in the case of Felthouse v
Bindley (1863), the court held that silence cannot constitute an acceptance.
Sometimes the offeror may give up the need for the offeree, it need effective
communication to the acceptance. In the case of Felthouse v Bindley (1863) is
an uncle, Paul Felthouse offered to purchase a house from his nephew, John
Felthouse. On 2 January, Paul Felthouse replied a letter to John Felthouse, it
stated that if Paul Felthouse didn’t hear anything from John Felthouse, he
consider the horse is own by him at £30 15s’. In February, John Felthouse sold
all his farm stock in an auction, John Felthouse was busy in the auction and
did not reply the letter of Paul Felthouse. John Felthouse advised the
auctioneer, Bindley not to sell the horse because he decided to sell the horse
to his uncle. The auctioneer forgotten the command and accidentally sold the
horse to the third party. Paul Felthouse sued the auctioneer, Bindley in
conversion (FANDOM, 2014). The Court of Common
Pleas said there was no valid contract between Paul Felthouse and John
Felthouse so that the possession of the horse is still belong to John
Felthouse. To success in an action for conversion, Paul Felthouse needed to
show that he owned the horse at the time of sale, he need to have a valid
contract between himself and his nephew for the sale of the horse. John
Felthouse did not accept the offer so that there was no communication of
acceptance between Paul Felthouse and his nephew before the sale. To be legally
binding, communication is important. Silence does not equal to acceptance (liuk, 2017).

It can determine through Section 3 of
contract act 1950. In Section of contract act 1950, it said that the proposal
of acceptance, communication and its revocation can be done through any act or
any omission. (muzoo93, 2017) In this case, since Jimmy have nodded
his head while Jackson is offering him. Thus, the act of nodded head can be
considered as Jimmy accepted the offer from Jackson already. So, although Jimmy
keep in silence when Jackson offer him, but Jimmy nodded head, so the contract
is highly likely valid.

The issue that need to discuss is whether
the contract is valid or not valid if Jimmy nodded his head and keep in silence
when Jackson made the offer to him which is to rent to second floor shop lots
from Jimmy.


If there is an exception to Section 17 in
Contract Act 1950 which is Section 19 in Contract Act 1950, the contract is not
voidable at the option of the party if the truth can be discovered in normal

However, fraud is very difficult to
establish as it required Jimmy to prove Jackson’s intention which require very
high standard. If fraud cannot be establish, Jimmy is advised to proceed to
misrepresentation. Under Section 18 of the Contract Act 1950, it provides that
misrepresentation include any positive assertion, in manner  not warranted by the information of the
person making it, of that which is not true, though he believes it to be true,
or any breach of duty which, without an intent to deceive, gives an advantage
to the person committing it by misleading another prejudice and causing,
however innocently, the other party to make a mistake as to the substance if
the thing which is the subject of the agreement.

On the fact, Jackson knowing that the
market rate is at least RM3, 000 but he informed Jimmy that based on his
survey, the market rate for the unit on the 2nd floor is around RM1,
500. Secondly, Jimmy agreed to rent the unit at level 2 to Jackson but Jimmy
noted that the tenancy agreement indicated out that Jimmy will rent out his
unit in level 1 of My Town to Jackson. Jackson had the intention to active concealment
of a fact by one having knowledge or belief of fact.

Under Section 17 of the Contract Act 1950,
it provide that “fraud” includes any of the following acts committed by a party
to a contract, or with his connivance, or by his agent, with his intend to
deceive or to induce another party to enter into the contract. First of fore is
the suggestion, as to the fact, of that which is not true by one who does not
believe it true. Secondly, the active concealment of a fact by one having
knowledge or belief of fact. Thirdly, a promise made without any intention to
perform it. Fourthly, there is any other act fitted to deceive and such act or
omission as the law specifically declares to be fraudulent. 

Next discussion is whether there is any
vitiating factors in the contract between Jimmy and Jackson. In this question
is highly likely that there are two possibly vitiating factors and must be
distinguish which are fraud and misrepresentation.

 For Jimmy and Jackson`s case is only focus on
offer and acceptance. In the case of Jimmy and Jackson, the offer made on 1st
October 2017 which Jackson expressed his interest to Jimmy to rent shop lot
located in MyTown, and the acceptance was on 14th October 2017 which
Jimmy agreed on Jackson’s request. According to Section 3 of the Contract Act
1950, the
communication and acceptance of
proposals are deemed to be made by any act or omission of the party accept
by which he plans to communicate the proposal or acceptance, and which has the
effect of communicating it. (NOTE)  On the fact that although Jimmy has agreed to
rent his level 2 shop lot to Jackson at the said market price, but Jackson
informed Jimmy that the tenancy agreement will be get ready for sign by both
parties. The issue is that when is the acceptance occur. In the case of Low Kar
Yit & Ors v Mohd Isa & Anor (1963), the court held that parties do not intend that the agreement contractually bind themselves. However,
they intend that only subsequent formal contract bind themselves when they
enter into the formal contract and the acceptance established only if the
contract is signed. Thus, there was no binding contract formed between both
parties. (NOTE)  Besides, in the case of Charles Grenier Sdn
Bhd v Lau Wing Hong (FC) (1997), the court held that the phrase, ‘subject to
sales and purchase agreement’ which does not indicates that the intention that
no contract will exist until the formal sales and purchase agreement is being
signed. (NOTE) In this case, although
the formal agreement is made later, but the parties already agreed on what they
had discussed where the acceptance was established, thus, the court held that
there is a valid contract has been formed. (NOTE)
Jimmy may use the case of Low Kar Yit & Ors v
Mohd Isa & Anor (1963) to argue that the acceptance is barely establish
only if the contract is signed. However, Jackson may use the case of Charles Grenier Sdn Bhd v Lau Wing Hong (FC) (1997) to argue that Jimmy
had agreed on his request which means both parties already have consensus,
although the tenancy agreement was made on 1st November 2017. Hence,
Jackson likely to win by using the fact in the case of Charles Grenier Sdn Bhd
v Lau Wing Hong (FC) (1997).


The question above is required to discuss
whether there are any vitiating factors in the contract between Jimmy
(Plaintiff) and Jackson (Defendant). First of all, the issue is that whether
the contract between Jimmy and Jackson has been formed. In order to form a
valid contract, there must be an offer, acceptance, consideration and intention
to create legal relation. There are two types of offer which is bilateral and
unilateral offer. Bilateral offer is a mutual arrangement between both parties
where one party promises to act in exchange for another party to act (Investopedia, n.d.), whereas, unilateral
offer is a promise which is legally enforced which one party is agreed to pay
another party if another party fulfil certain duty. (Investopedia, n.d.) Next, acceptance must be communicated.
According to Section 2(b) in Contract Act 1950, when one party is agreed on the
proposal made, the proposal is deemed to be accepted. Once it is accepted, the proposal
becomes a promise. (, n.d.)Besides, consideration is a benefit that
negotiate between both parties and it is an indispensable reason for party to
enter into the contract. (LAW.COM, n.d.) Moreover, legal to create legal
relations indicates that once the offer has been accepted which means that both
parties have intention to enter legally binding contract. (Law Teacher, n.d.)