Law299 Free Consent - Coercion

MUHAMMAD IYAD AMEEN BIN MAT TENA’AIN
2021109321
QUESTION :
Malik was forced to enter into a contract to sell his bungalow to Wan for RM 500,000. The
original price of the house was RM 5 million. During the execution of the contract Malik was
threatened and pressured by Wan’s very rude and large number of employees. They
threatened to use weapon and harm him.
Advise Malik as to the validity of the contract
ANSWER :
The issue of this case is Malik was forced to enter into a contract and he was threatened by
a weapon and will use against him.
A contract is an agreement between 2 or more parties that is legally binding between them.
The principal legislation for the law of contract is the Contract Act 1950. Under the Section
2(h), contract is referred to as ‘an agreement enforceable by law’. According to the
Section10(1) Contracts Act 1950, “ all agreements are contracts if they are made by the free
consent of parties competent to contract”. Section 13 provides that: “ two or more persons
are said to consent when they agree upon the same thing in the same sense.” Section 14(a)
Contracts Act 1950 state that consent is said to be free when it is not caused by coercion.
Coercion is defined under S.15 CA 1950 as “Coercion is the committing, threatening to
commit any act forbidden by the Penal Code, or the lawful detaining or threatening to detain,
any property, to the prejudice of any person whatever, with the intention of causing any
person to enter into an agreement.”
Based on case of Kesarmal S/O Letchman Das v Valiappa Chettiar, it was held that a
transfer executed under the orders of the Sultan, issued in the ominous presence of two
Japanese officers during the Japanese Occupation of Malaya was invalid. The consent was
not freely given, and the agreement was voidable at the will or option of the party whose
consent was so caused. Under the case of Chin Nam Bee Development v Tai Kim Choo & 4
Ors (1988), The respondents purchased homes off the plan to be constructed by the
appellants. Each of the respondents had signed a sale and purchase agreement at $29,000.
Subsequently, the respondent was made to pay an additional $4,000. It was held that the
additional payment was not made voluntarily but under threat by the appellant to cancel the
respondents’ booking for their houses.
According to the Section 19(1) Contracts Act 1950, A contract is voidable at the option of the
party whose consent was so caused. Section 2(i) CA 1950 state “an agreement which is
enforceable by law at the option of one or more of parties, but not at the option of the other
or others, is a voidable contract.”
In this situation, Malik has entered a contract with Wan which is related to Section 2(h),
contract is referred to as ‘ an agreement enforceable by law’. According to the Section10(1)
Contracts Act 1950, “ all agreements are contracts if they are made by the free consent of
parties competent to contract”. In this case, Malik was forced to enter into a contract to sell
his bungalow to Wan for RM 500,000 but the original price is RM 5 million. This is against
the Section 13, Contracts Act 1950,which state “ two or more persons are said to consent
when they agree upon the same thing in the same sense.”
During the execution of the contract Malik was threatened and pressured by Wan’s very rude
and large number of employees. They threatened to use weapon and harm him. Under the
Section 14(a) Contracts Act 1950 state that consent is said to be free when it is not caused
by coercion. Coercion is defined in the Section 15, “Coercion is the committing, threatening
to commit any act forbidden by the Penal Code, or the lawful detaining or threatening to
detain, any property, to the prejudice of any person whatever, with the intention of causing
any person to enter into an agreement.”
Based on the case of Chin Nam Bee Development v Tai Kim Choo & 4 Ors (1988), The
respondents purchased homes off the plan to be constructed by the appellants. Each of the
respondents had signed a sale and purchase agreement at $29,000. Subsequently, the
respondent was made to pay an additional $4,000. It was held that the additional payment
was not made voluntarily but under threat by the appellant to cancel the respondents’
booking for their houses.
In other words, a contract that has been forced, threatened or both is void. So, if Malik was
forced or threatened or both, his agreement is void and enforceable. This related to the
Section 19(1) Contracts Act 1950, A contract is voidable at the option of the party whose
consent was so caused. This case also related to the Section 2(i) CA 1950 state “an
agreement which is enforceable by law at the option of one or more of parties, but not at the
option of the other or others, is a voidable contract.”
In conclusion, the contract that Malik was enter is void because he was forced and
threatened by a weapon.

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