DIPLOMA IN BUSINESS STUDIES (BA 111)

BUSINESS LAW

LAW 299

GROUP ASSIGNMENT

PREPARED BY:

RUSYDINA ALIAH BINTI MOHAMED FARAISH (2018283384)

AZYAN FARHANA BINTI ADHAM JAMULULLAIL (2018293572)
NIK FATIN SYAFIQAH BINTI NIK ZULKIFLEE (2018681762)

LECTURER

MADAM LIZIANA KAMARUL ZAMAN

DATE OF SUBMISSION:

10TH APRIL 2020

PART B
(20 MARKS)

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
threated to use weapon and harm him.
Advise Malik as to the validity of the contract.

ISSUE:

i. The issue here is whether the contract is voidable or not.

ii. It concerns the capacity to contract and whether there is an threaten contract
between Malik and Wan.
iii. Whether there is any commit of act forbidden by the Penal Code, Wan.
iv. Whether there is a criminal act by Wan which is threatening Malik with weapon and
harm him.

LAW:

In contract Act 1950, section 15 stated that the act of element in committing or threatening to
commit any act forbidden by the Penal Code, or the unlawful detaining or threatening to
detain, any property, to prejudice of any person whatever, with the intention of causing any
person to enter into an agreement. There are few elements in coercion which are one party
commiting or threatening to commit. Second element is, any criminal act or unlawful
detention of someone’s property. Last element will be, with intention to make or force the
other party to agree to enter into a contract. It is immaterial whether the Penal Code is or is
not in force in the place where the coercion is employed.

For example, A on board an English ship on the high seas, causes B to enter into an
agreement by an act amounting to criminal intimidation under the penal code. A afterwards
sue B for breach of contract at Taiping.
Kesarmal s/o Letchman Das v. Valiappa Chettiar is a great example in this case. It was held
that a transfer executed under the orders of the sultan, issued in the ominous presence of
two Japanese officers because the consent was not freely given and the agreement was
voidable at the option of the party whose consent was so caused.

Another example could be the Chin Nam Bee Devpt Sdn Bhd v Tai Kim Choo &4 Ors (1988).
The respondent purchased homes off the plan to be constructed by the appellants. Each of
the respondents had signed a sale and purchase agreement to purchase a house at
$29,500. Subsequently, the respondent was made to pay an additional $4,000. The court
was asked to determine if the additional payment was made voluntarily or under threat by
the appellant to cancel the respondents’ booking for their houses. The lower court had found
that payment was not voluntarily but had been made under threat. On appeal, the appeal
was dismissed by the High Court which ruled that there was coercion as defined in Section
15. It further added that the definition in Section 15 should only apply for the purpose
contained in Section 14 and not for the entire Act.

APPLICATION:

Coercion is the committing, or threatening to commit any act forbidden by the Penal Code. In
this case, Malik was threatened by Wan to enter into an agreement to sell Malik’s bungalow
to Wan for RM 500 000. Supposedly the price of the bungalow was RM 5 million, but Wan
force Malik to sell at la very low price which is RM 500 000. Wan and his large number of
employees threatened and pressured Malik using weapon and also wanted to harm him. In
this case, Wan has the intention to force Malik to agree into the contract. Furthermore, he
also wanted to threatened and harm Malik. This case also related to the similar case which
is Chin Nam Bee Devpt Sdn. Bhd v Tai Kim Choo and 4Ors (1988).

CONCLUSION:

In conclusion, the contract is voidable between Malik and Wan. This is because, the contract
will not be valid if one of the parties committing or threatening to commit. In this case, Malik
was threatened by Wan by using weapon and wanted to harm him. Wan already involves
himself into Penal Code. He was very rude and threatened by using weapon. This will cause
harm to Malik. Lastly, Malik can Sue Wan for threatening him to sell the bungalow at a very
low price which is RM 500 000. Malik will totally win the case.