Void and Illegal Contract -Final
Transcript of Void and Illegal Contract -Final
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VOID AND ILLEGAL CONTRACTSection 24, Contract Act 1950
GROUP MEMBERS
ALIF AZLAN BENJAMIN BIN IDRIS GM 05293
DOH SIEW FONG GM 05290
DZULPADZLI BIN SHA’ARIN GM05250
MOHD ZAHILE BIN ISMAIL GM 05234
NUR SYAZANA BINTI ZULKIFLI GM 05285
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Introduction• Section 24 of Malaysian Contract Act 1950 deals with What considerations and object are lawful, and what not Void Agreements
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Section 24, Contracts Act 1950
The consideration or object of an agreement is lawful, unless:
( c ) it is fraudulent;( d ) involved or implied contract injurious to person
or property of another; or ( e ) court regards it as immoral, or opposed to public
policy.
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S24 (c) fraudulent contract• An object and consideration of a contract is fraudulent.
• This is different with fraudulent misrepresentation where one is fraudulently induced by another party to enter into contract
• Illustration (e) Section 24:A, B and C enter into an agreement for the division among them of gains acquired, or to be acquired, by them by fraud. The agreement is void, as its object is unlawful.
• Example:Relationship between Principal & agent• if A (the agent) without knowledge of his Principal agrees to obtain
money from B’s lease of the land that belongs to his Principal.• The agent is unlawfully receiving a secret profit.
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S24 (d) involves or implies injuries to person or property of another
• Any contract which its consideration or objects causes injury to person or property of another is VOID under contract
CASE Syed Ahamed Alhabsyee v. Puteh bt Sabtu (1922)
ISSUE Defendant as a trustee of a piece of land which belonging to a minor. In this case, defendant agreed to sell the land to plaintiff.
COURT’S DECISION The transaction was VOID, due to the defendant action would affect the interest of minor (minor would lost a piece of land)
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CASE Taylor v. Bowers(1876)
ISSUE The plaintiff was being pressed by his creditors, to prevent certin machinery from falling into their hands, he trasferred it to one Alcock.
He then called two meetings of creditors in an attempt to reach a settlement with them, but none was reach.
The plaintiff successfully claimed back the machinery from defendant, who was one of the creditors and had obtained the machinery from Alcock with notice of the fraudulent scheme and in the hope of benefiting from it.
COURT’S DECISION The decision based on the fact that the illegal purpose had not been carried out. No creditor had been defraud.
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S24 (e) immoral or against public policy
• Any contract which its consideration or object is regarded as immoral or opposed to public policy is VOID under the law
Section 24 illlustration (j) Immoral Contract• A, who is B’s advocate, promises to exercise his influence, as such, with B in
favour of C, and C promises to pay RM1,000 to A. The agreement is void, because it is immoral.
Section 24 illustration (k) Immoral Contract• A agrees to let her daughter to hire B for concubinage. The agreement is
void, because it is immoral, though the letting may not be punishable under the Penal Code.
CASE Aroomogum Chitty v. Lim Ah Hang (1894)ISSUE The plaintiff initiated a claim for the refund of money he lent to a
brothel business.
COURT’S DECISION The money lent for the purpose of brothel business was not recoverable for illegality. The object of the agreement was clearly immoral and against the public policy.
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CASE The Aspinall Curzon Ltd V. Khoo Teng Hock (1991)ISSUE The plaintiff had taken out an action against the defendant in
the English High courts for unpaid gambling debts and obtained a judgment. The plaintiff then applied to proceed to registration of the judgment in Malaysia’s High Court, when was resisted by the defendant on the grounds that gambling debts are not recoverable under Malaysian contract law.
COURT’S DECISION Dismissing the defendant’s appeal : (1) had the contract been entered in this country it had been so
executed with lawful consideration, and section 24 of the Contracts Act 1950 cannot apply to make it void;
(2) the chequeus were issued in exchange for cash and gaming chips for purposes of gaming at a licensed gaming casino. The enforcement of the UK judgment cannot be considered as against the public policy of Malaysia.
Section 24 illustration (f) Against Public PolicyA promises to obtain for B an employment in the public service, and B promises to pay RM1,000 to A. The agreement is void, as the consideration for it is unlawful.
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CASE Malaysia Airline System Bhd v. Malini Nathan & Anor
ISSUE The respondents booked and had confirmed tickets to fly on the appellant's airline on a scheduled date. As the flight was fully booked, the appellant was unable to accommodate the respondents on the said flight. The respondents sued the appellant for damages. The appellant relied on condition 9 of the conditions of contract printed on the airline ticket.
COURT’S DECISION The appellant was entitled to rely on the said condition and was thus not in breach of contract for failing to fly the respondents on the appellant's airline. In arriving at the decision, the court considered that 'the plaintiffs ought to have known condition 9 and they were presumed to have known it as it was printed on the ticket.
Exemption Clause!
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ConclusionContracts or agreements will be considered as VOID if:
( c ) it is fraudulent;( d ) involved or implied contract injurious to person or property of another; or
- Syed Ahamed Alhabsyee v. Puteh bt Sabtu (1922)- Taylor v. Bowers(1876)
( e ) court regards it as immoral, or opposed to public policy.
- Aroomogum Chitty v. Lim Ah Hang (1894)- The Aspinall Curzon Ltd V. Khoo Teng Hock (1991)- Malaysia Airline System Bhd v. Malini Nathan & Anor
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Condition 9