Elements of consideration:

1.Consideration need to be adequate

It must be sufficent and must have consent to the promiser.Freely given.
2.Consideration may move from the promisee or any other person.
Case : Venkata Chinnaya v Verikata Ma’ya.
Facts:
A sister agreed to pay an annuity of Rs653 to her brothers who provided no consideration for
the promise. But on the same day, their mother had given the sister her estate. Subsequently,
the sister failed to fulfill her promise to pay the annuity, her brother sued her on the promise.
Held:
She was liable on the promise on the ground that there was a valid consideration for the
promise even though it did not move from the brother.
3.Part payment may discharge an obligation.
Section 64 of CA, 1950
“Every promise may dispense with or remit, wholly or in part, the performance of the promise
made to him, or may extend the time for such performance, or may accept instead of it any
satisfaction which he thinks fit”.
General rule is that payment of a smaller sum is a satisfaction of an obligation to pay a larger
sum.
4.Past consideration is good consideration
Something which wholly performed before the promise was made. It was made or given not
in response to the promise. Promise is subsequent to the act and independent of it.
English law: Past consideration is not a good consideration.
-Malaysian law: Past consideration is a good consideration.

Classification of consideration:
i.Executory Consideration
ii.Executed Consideration
iii.Past consideration Capacity
Definition:
Exceptions:
Agreement made on account of natural love and affection Ability of a person to effect a legal transaction.
between immediate family members?
standing in near relation to each other (Immediate family Example:
members.) Section 10 of Contract Act
Case: Re Tan Soh Sim (1951) ( "All agreements are free consent of parties competent to contract, for a lawful
Under common law “natural love and affection” is good consideration and with a lawful object, and are not hereby expressly declared
consideration. to be void.")
Capacity to enter into a contract

Example:
Communication of Acceptance Section 11 of Contract Act
The acceptance must be communicated ( "Every person is competent to contract who is the age of majority according to
to the offeror. the law which he is subject, and who is the sound mind, and is not disqualified
Offeree approves of the offer and from contracting by any law to which he is subject.")
agrees to the terms of the offer. Consideration:
Definition
Section 7 (a) of Contracts Act -Section 2 (d) of Contracts Act
Acceptance must be absolute and Consideration is the price of which one party pays to buy the Formalities Express: The offer made in word clearly in
unqualified promise or act of the other. Definition: writting or verbally.
Section 6 (b) of Contracts Act -Section 26 of Contracts Act Some agreement must be made
Acceptance must be accepted within a An agreement without consideration is void.
in writing in order to be valid. How to make an offer
reasonable time Implied: The offer implied from the conduct of the parties and
Acceptance in the case of silence no word being used in the offers
Case: Felthouse v. Bindley (1862) Example:

Section 26 (a) Natural love and Section 9 states that: ‘So far as the proposal or acceptance
of any promise is made in words, the promise is said to be
affection ; near relation.
express. So far as the proposal or acceptance is made
Section 26 (c) Contract promise otherwise than in words, the promise is said to be implied.’
to pay a debt barred by limitation
of law.
Specific person/ a class of persons
-Addressed to specific person
Type of offers -Only the addressee may accept the offer
Postal Rule
-Who is not addressee cannot accept the offer.
Section 4(2) of Contracts Act provides that the
acceptance is complete as against the offeror
Example: Alia makes an offer to Mei Ling. However, Samatha
when it is put in the course of transmission to him accepts the offer. In this scenario, the offer made by Alia is
. only addressed to Mei Ling. As such, only Mei Ling can
With regard to postal communication, acceptance Elements of a contract accept the offer
is complete upon posting. This is known as the
postal rule, which states that the acceptance is Acceptance
complete, when the letter of acceptance is posted Offer made to public at large
Definition:
irregardless of whether the letter is delayed or -An offer can be made to the public at large.
lost in mail – Ignatious v Bell Section 2 (b) of Contracts Act
-This type of offer if accepted, it becomes a unilateral
Case: Adams v Lidsell (1818) When the person to whom the proposal
is made signifies his assent thereto, the contract.
proposal is said to be accepted: A Example: The person who makes offer at large is the offeror
proposal, when accepted becomes a
and the person who return the cat to the offeror is the offeree.
promise’
Revocation of Acceptance Acceptance can be expressed or implied
Acceptance must be distinguished with Case:Carlill v Carbolic Smoke Ball Co. (1892)
Section 5 (2) of Contracts Act counter offer An offer may be made to an individual or to a large number of
‘An acceptance may be revoked at any time before the communication of the acceptance is people。
complete as against the acceptor, but not afterwards’
Offeree may revoke his acceptance at any time before or at the moment the letter of
acceptance reaches the offeror. Price list
A statement of minimum price at which a party may
Example of illustration Offer: be willing to sell will not amount to an offer.
Section 4 Contracts Act
Definition Case: Harvey v. Facey [1893] AC 552
‘B (Offeree) revokes his acceptance by telegram. B’s revocation is complete as against B -Section 2(a) of Contracts Act Display of goods
when the telegram is dispatched and as against A (offeror) when it reaches him.’ ‘When one person signifies to another his -Generally it does not constitute a proposal.
willingness to do or abstain from doing Rule:
anything with view to obtaining the assent of -An offer is made by a customer when he or she selects
the other to the act or abstain is said to make a the desired goods for payment at the counter
proposal.’ Case: pharmaceutical society v boots cash chemists
CERTAINTY OF TERMS (1953),Case: Fisher v Bell
Examples of ITT
Definition "When a person promise or proposes
Section 30 of Contracts Act something to another party with the -The defendant had a flick knife displayed in his shop
‘Agreement, the meaning of which is not intention that his promise or proposal would be window with a price tag on it. Under the Restriction of
certain, or capable of being made certain, are accepted by that other party." Offensive Weapons Act 1959, it is a criminal offence to
void.’ offer such flick knives for sale.
Example: Language used too vague -Held: His conviction was quashed as goods on
displayed are not “offers” in the technical sense but
Privity of Contract merely an invitation to treat.
Case: Karuppan Chetty v Suah Thian (1916)
Definition: Request for tender is an invitation to treat
-So, tender is an offer. The company that gives tender is an offeror.
Intention to create legal relation Anyone is not a party -The company that asked for tender is the offeree. This company has
Definition: to a contract cannot Offer and Invitation to treat the right to accept or not accept the tender.
-However, if the company advertises that the lowest price (tender) will
seek to enforce it or
be accepted. Then, this advertisement will amount to an offer.
Agreement must intended to be made liable under it.
Auction
legally enforceable -Bidding is an offer
-Knocking the hammer by Auctioneer is
Presumption for business/ an acceptance
commercial agreements is
ADVERTISEMENT IN MAGAZINE
intended to be legally HARRIS V NICKERSON (1873)- N PUT ADV OF OFFICE
enforceable unless specify ACCESSORIES. HARRIS TRAVEL THERE TO GET IT BUT
WHEN HE REACHED THE SHOP, ADV HAS BEEN
otherwise. WITHDRWN. HELD: CANNOT SUE BECOZ X OFFER BUT ITT.
Although every contract is an
agreement , there are many
agreements which are not Definition
contract. (to retract/cancel or withdraw)
REVOCATION OF OFFER Section 5 of Contracts Act
‘A proposal may be revoked at any time before the
Example: communication of its acceptance is complete as against the
proposer, but not afterwards’
If A and B agree to meet at 8
o'clock to have dinner together, Once acceptance is made, offeror no longer entitled to revoke
the agreement is made without his offer.
intending that there will be legal Case: Payne v Cave (1879) – D make highest bid in auction but
consequences if either A or B in revoke before fall of hammer. Held: can revoke offer
the end, does not turn up. It is S 6 (a) of Contracts Act
Revocation by notice - Revocation is effective
merely a social agreement, and after the notice of revocation had come to the
not a contract. actual knowledge of the offeree
-Revocation of offer under the postal rule
Modes of revocation -CASE: HENTHORN v FRASER (1892)
S 6 (b) of Contracts Act
Revocation by lapse of time
-CASE: FRASER v EVERETT (1889)
S 6 (c) of Contracts Act Revocation by
failure of offeree to fulfill condition precedent
to the acceptance
-CASE: PYM v CAMPBELL (1856)
S 6 (d) of Contracts Act
Revocation by death or mental disorder of the
offeror
-CASE: BRADBURY v MORGAN (1862)