INTRODUCTION TO LAW 3 (LAW 087)

SAMPLE OF ANSWER FOR PROBLEMATIC QUESTIONS

Law of Contract

Vali was forced to enter into a contract to sell his house last week to Das at a price of RM55,
000.00. The original price of the house was RM123, 456.00. During the execution of the
contract at Dass office, Vali was surrounded by several of Das workers. These workers were
physically large and spoke in a very rude manner. Some even carried parangs and threatened to
harm him. Advise Vali whether the contract is valid.
First, look at the following guidelines and draft your answer:
1) Issue - Whether the contract entered between Vali and Das is valid due to coercion.
2) Law/ Principles
- S. 10(1) of the CA 1950
- S. 14
- S. 15 you dont have to explain all the circumstances of coercion under this section as Valis
problem is related to one of them only.
3) Case Chin Nam Bee Development Sdn Bhd v Tai Kim Choo
Note: If there is no case relating to the legal principle, create your own example/s, showing that
you understand the principle.
4) Apply the principles to the question. Help Vali to solve his problem!
- By referring to the principles of coercion mentioned above, relate them to Valis case. Look at
the facts of the case (question) very carefully. Remember, every single word is important! As
regards to this case, how different was the sale price compared to the original one? What
happened actually during the execution of the contract? How did the workers treat Vali? Were
they polite? These are some of the important points that you have to take into account when
answering the question.
5) Conclusion. Now decide whether the contract entered between Vali and Das is valid or
not!
- Advise Vali whether the contract entered between him and Das is valid or not and what he can
do under the law if the contract is voidable due to coercion.
Now, write your answer in paragraph formCompulsory!
By: Nur Hidayah Ab Aziz

The issue in this case is whether the contract entered between Vali and Das is valid due to
coercion.
S. 10(1) of the Contracts Act 1950 provides that all agreements are contracts if they are
made by free consent of the contracting parties. Therefore, in order to constitute a valid contract,
there must be no force or influence from other persons to enter into the contract. It must be done
willingly and freely. Under S. 14, there is no free consent if a person enters into contract under
coercion.
Threatening act forbidden by Penal Code is one of the circumstances of coercion under S.
15. The act involves threat to bodily injury and this can be done by words or conduct of a
person. Therefore, if A feels threatened by the words or action of B, A can be said to be under
coercion and B shall be liable for committing coercion. Under S. 19, a contract entered due to
coercion is voidable and thus, the victim has the right to rescind or continue with the contract.
In the case of Chin Nam Bee Development Sdn Bhd v Tai Kim Choo, the respondent
purchased certain houses for construction for the price of RM29, 500 from the appellant. The
respondent claimed that they had to pay additional sum of RM4000 to the appellant under a
threat where the appellant threatened to cancel the booking of the houses if the sum was not
paid. It was held by the court that there was coercion by the appellant as the RM4000 payment
was done involuntarily and with no free consent.
In Valis case, he had sold the house to Das for RM55, 000 whereas in fact, the original
price was RM123, 456.00.00. He claimed that he was forced to enter into the said contract.
Looking at the facts of Valis case, at the time of the contract, he was surrounded by Dass
workers who were physically large and rude. They even carried parangs and threatened to injure
him. Based on S. 15, these acts can be classified as coercion because Vali felt scared and
threatened by the workers words and conduct, which then forced him to enter into contract with
Das even though he didnt want to.
In conclusion, the contract between Vali and Das is voidable due to coercion and Vali has
the option to rescind or continue the contract.

Practice makes perfect All the best!!

By: Nur Hidayah Ab Aziz