Business Law Test Prep

Law is

a necessary tool involving a set of rules recognized by a community to regulate and protect the collective interests of a society

What are the law key objectives and purpose/aim of law

The key objectives is to achieve justice, peace + harmony, and balancing interest with the purpose to attain justice in a society by encouraging the doing of what is right or just in a certain circumstances.

3 main WORLDWIDE classification of law:

Civil, Common, and Socialist law

Malaysian common law system:

Public, International, and Private

Explain public and private law and the difference

Public law governs relationship between individuals + the state and has 2 categories which is constitutional law + criminal law. Private law involves matters that affect the rights and duties of individuals amongst THEMSELVES, and it includes contract, tort, and trust. Public affects society, Private affects private parties.

3 Laws under malaysian law (not the diff levels of power)

Written Law: federal and state constitution (underneath both is legislation & subsidiary)

Unwritten Law: English law (underneath is common law & equity), Judicial Precedents, and Customs

Islamic Law

Malaysian court levels & power + types of cases heard!!!!!!!

1. (HIGHEST) Federal Court: power/jurisdiction- highest

   Types of cases heard- Constitutional + appeals from court of appeal

2. Court of Appeal: power/jurisdiction- appeals from high court

   Types of cases heard- Civil + criminal appeals

3. High Court: power/jurisdiction- serious civil/criminal cases

   Types of cases heard- Divorce, defamation, bankruptcy, murder

4. Sessions Court: power/jurisdiction- Civil cases up to RM 1mill + criminal cases

   Types of cases heard- Theft, robbery, traffic, causing injury

5. Magistrates Court: power/jurisdiction- Civil cases up to RM 100k + less serious criminal cases

   Types of cases heard- Traffic, petty theft, minor assault

Malaysian court levels FIRST APPEAL GOES WHERE? (first appeal means if they want to appeal their case or trial again)

1. (HIGHEST) Federal Court: NO MORE APPEAL (top of chain)

2. Court of Appeal: Federal Court

3. High Court: Court of Appeal

4. Sessions Court: High Court

5. Magistrates Court: High Court

starts from bottom and goes up btw

8 Stages of a bill/law passing in parliament

1. Pre-parliamentary stage

2. First Reading

3. Second Reading

4. Commitee stage

5. Third reading

6. House of Senate

7. Royal Assent

8. Publication

What are the 3 methods of alternative dispute resolution (explain them too)

!!!! Arbitration: settling commercial disputes without going to court, where there is a third party/the arbitrator who resolves it through a hearing

Mediation: a facilitative process for resolving disputes quicky and cheaply

Conciliation: where there is a conciliator settling non commercial/family matter disputes, by assisting parties to reach an agreement without going to court

What are the stages of a CONTRACT (not elements)

1. Promise between 2 parties ↓

2. Promise becomes an Agreement where parties are serious about making it legal ↓

3. Agreement eventually becomes a legally enforceable Contract

What are the ELEMENTS of a CONTRACT

An offer + an acceptance (which both require intention for legal relations, consideration, and legal capacity) = Agreement →→→ Contract

What is invitation to treat

It is a preliminary communication between the parties at the stage of negotiation, (before an offer is made) and it is an attempt to induce an offer/proposal

Examples: Display items, ads, catalogues, price tags

A counteroffer is

rejecting the original offer, and proposing a modified or new one

Whats consideration and capacity

Consideration is something of value exchanged and capacity is the legal ability to enter a contract

When is a contract voidable? mention sections too

When there is:

COERCION (sec 15)

UNDUE INFLUENCE (sec 16)

FRAUD (sec 17)

MISREPRESENTATION (sec 18)

Explain COERCION

It is the committing or threatening to commit criminal force or any act forbidden by the Penal Code to make someone enter a contract.

When there is coercion, the consent is not free, the threat can be physical or criminal and the contract is then VOIDABLE under section 19

What is voidable (section 19)

Voidable is when a contract becomes invalid so the innocent party can cancel it. (opposite is void contract)

Whats undue influence

Pressure from a person of a higher authority and power to a person of a lower position and authority

What is misrepresentation and fraud? Explain the difference

Fraud = intent to decieve

Misrepresentation = when there is a breach of duty or something in the contract goes wrong, without any intent to decieve, which causes party to make a mistake innocently, perhaps without knowing.

BOTH fraud and misrepresentation involves a situation of a false statement, BUT in fraud the person doesn’t believe in its truth, while in misrepresentation, the person does believe in the truth of the representation

Explain a case for COERCION (NEED TO KNOW!!)

In Chik Kon Lee vs Chua Toh Eng (1964), the defendant threatened to report the plaintiff to the police to force him into signing a contract. The court held that this was COERCION under Section 15 of the Contracts Act 1950. Therefore, the contract was voidable at the option of the plaintiff, due to lack of free consent under Section 19.

When can a contract be void (valid)

If there is a Mistake (sec 20), where both parties make a mistake or misunderstand a part of the contract

What are Terms and explain the 2 types

Terms are the promises, obligations, and expectations both parties agree to in a contract.

Express terms: clearly stated terms and include offer+acceptance

Implied terms: not stated terms but assumedby law, court, statue, or customs.

Whats the 2 terms implied by statue and explain

(SOGA) Sales of Goods Act (1957) - applies to sale of goods only, and applies to both consumer+non-consumers

• SOGA (sec 12(2)) states that if seller breaches a condition, buyer can reject goods, terminate contract, and sue for damages. BUT (sec 13 (2)): if buyer accepts goods, condition becomes a warranty.

(CPA) Consumer Protection Act (1999) - applies to both goods + services, and applies to consumer transactions only

What happens if there’s a breach of condition or breach of warranty, explain and give example

If there’s a breach of condition (essential part of contract): end contract and sue

Example: car engine not working

If there’s a breach of warranty (minor/non-essential part): only sue for damages

Example: car radio not working

Explain Exclusion Clause and when it is NOT valid

It’s a term in a contract that tries to exclude liability for breach or negligence.

Exclusion Clause NOT VALID if:

• wording is ambiguous/vague or unclear

• if notice of the exclusion isn’t brought to the other parties’ attention

What are goods?

Goods are every kind of moveable property other than actionable claims (receipts, movie tickets), and money

What are the types of goods

Specific goods: Clearly identified goods at time of contract

Ascertained goods: identified AFTER contract

Unascertained goods: not yet specifically identified goods (like buying a portion of an existing big stock that will be selected later. ex: ecommerce, shein orders)

Future goods: to be made or acquired in the future

What is intention to create legal relation

It refers to the requirement that parties to an agreement must intend to be legally bound by their promises

2 main types of agreement + explain

Domestic/Social → where theres no legal intention unless proven otherwise

Commercial/Business → where theres always assumed legal intention involved

2 IMPORTANT CASES TO KNOW ABOUT WIFE VS HUSBAND!!!

Balfour vs Balfour (1919):

Husband promised wife 30 pounds/month while abroad, wife sued when he stopped, court held that since they were still married, its considered a personal/domestic arrangement, not intended to create legal relations, so it wasn’t enforceable.

Merrit vs Merritt (1970):

The husband and wife were separated when the husband signed a written agreement to transfer house ownership to his wife if she paid off the mortgage, which she DID. When he refused, the court ruled that since they were separated and the promise was in writing, there was a clear intention to create legal relations. So the agreement was enforceable.

STRUCTURE FOR Long/Written/5 mark questions

1. ISSUE (what is the legal problem/identity legal question)

May start with : The issue is whether....

2. RULE (what law applies, mention section of law + any supporting case) 

Ex: According to section 15 of the Contracts Act 1950, coercion involves……… to compell a person to enter a contract.

A supporting case may be Chik Kon Lee vs Choa Toh Eng, where the court held that...

3. EXPLANATION (explain how the law works, clarify meaning, compare cases)

Ex: Coercion usually involves physical .….. It makes consent given not free, therefore contract becomes voidable under section 19.

4 APPLICATION (apply law to facts of question, show how law affects that specific situation, and debate)

Ex: In this case, A threatened to harm B if he did not....... falling under coercion (section 15). Hence, B's given consent was not free.

5. CONCLUSION (short, direct answer,  state outcome of analysis)

Ex: Therefore, contract is voidable due to coercion at B's option.