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Name: ONG ZI JIUN ID: B2101056

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Acknowledgement
EL101
Study Skills and the Elements of
Low
19 November 2021
Write an essay on an area of law (eg
Company Law/Contract Law/Tort
Law) and explain why these areas are
related to business.

Intake (where applicable) August

Word Count 1000 Date/Time

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 Date: Date:15/11/2021
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 Table of Content

No. Contents Page(s)

1.0 Low of Contract 1-2
2.0 Why Contract Low are related to business 3
3.0 References 4
1.0 Contract law

In its most basic form, a contract is a legally binding promise. It could be a promise to do
something or a pledge to refrain from doing something. A contract involves the consent of two
or more people, with one of them usually making an offer and the other accepting it. If one of
the parties breaks their agreement, the other has the right to seek legal redress. The law of
contracts deals with issues including whether a contract exists, what it means, whether it has
been broken, and how much compensation the damaged party is entitled to. (Mehren, n.d)

According to (Law Teacher, 2021), Contract law consists of several components. Firstly, a
Proposal or offer (Defined in s2(a) Contracts Act 1950) It signifies that an offer can be made
in writing or orally provided it is not legally required to be written. A straightforward
declaration or overt action initiates the contract. It's basically what you give someone in
exchange for a promise to perform. It can't be ambiguous or vague. It must specify the identity
and nature of the object being sold, as well as the conditions and/or terms under which it is
offered, in precise and specific words.

Second, Acceptance (Defined in s2(b) Contracts Act 1950) refers to the other party's
acceptance of one party's offer, when accepted, becomes a promise. Which, according to
general legal principles, is what creates the contract. You must clearly describe the identity,
nature, and conditions under which the item is offered in clear, precise, and detailed language.

Thirdly, Considerations (Defined in s2(d) Contracts Act 1950) which refer to “When, at the

desire of the promisor, the promise or any other person has done or abstained from doing, or
does or abstains from doing, or promises to do or to abstain from doing, something, such act
or abstinence or promise is called a consideration for the promise”. Past, executed, and
executory considerations are the three sorts of considerations. Promises that have been
conveyed between both parties, as well as obligations that will be carried out later, are examples
of executory concerns. One or both parties completing their agreements are examples of
executed concerns. Whereas, in the past, instances of previous considerations include the act
being carried out and promises being swapped. The agreement between the parties is regarded
invalid if there is no consideration.

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In addition, is Intention to create legal relations it alludes to the establishment of any contract,
whether oral or written, requiring the parties' mutual assent or "meeting of the minds" on all
the terms and key characteristics of the contract. No contract may be created unless all of the
parties involved desire to do so, according to the courts. Even if the parties agree on some of
the conditions of an agreement, discussions to agree on some of the terms are not deemed an
offer and acceptance. Both parties must intend to engage in the deal, and neither can accuse the
other of duping them. As a result, a contract can be voidable owing to fraud or other mistakes.

Then comes certainty (Stated in s30 Contracts Act 1950), Then comes certainty (Stated in s30
Contracts Act 1950), certainty is defined as a clear and distinct statement of the fact that is the
reason for action. By reference to Section 30 of the Contract Act 1950, In accordance with the
statute, an agreement that is either doubtful or incapable of being made definite is void., and a
vague or confusing agreement is unenforceable.

There is also the component of Capacity (Stated in s11 Contracts Act 1950) provides that
“Every person is competent to contract, who is of the age of majority according to the law to
which he is subject, and who is of sound mind, and is not disqualified from contracting by any
law to which he is subject”. An individual who signs the contract must be legal age of consent
is required and has the ability to understand it. The majority of Malaysia's population is above
the age of 18. (Law Teacher, 2021)

Furthermore, there is the element of “Free consent” (Stated in s13 – s23 Contracts Act 1950)
which means, the contract will not be enforced if it has any unlawful purpose or opposes the
public policy. Contracts involving lotteries, horse races, dog races, or any form of gambling
would likely be considered unfair or illegal by many jurisdictions. It is essential that the
parties to a contract be free to agree to it. Next comes the is legality (Stated in s24 – s25
Contracts Act 1950) which means that even if all the requirements of the above valid contract
exist, the contract must be legal. If it is illegal, it will not be enforced (Krishnan et al., 2018).

2
2.0 Why Contract Low are related to business

It is critical to your professional success to understand the impact of contract law on your firm
or organization; it affects almost every company that sells a product or offers a service. The
reason for this is fact that contract law applies to every purchase, sale, resale, or service
provided. Contract law applies to the services or commodities being given and purchased, as
well as the prices, in these transactions. The concept of terms and conditions is part of contract
law, which deals with business-to-business transactions. In the end, each business and its
functions are determined by contract law and commercial law (gersmarter, 2016). For example,
as a business student, if I open a shop then I don't understand contract law, and the client
breaches the contract one day, I won't know how to protect my own interests, and I could be
scammed or defrauded by the client. As a result, to collect essential information, I will need to
visit a lawyer. This inadvertently raises my company's costs. However, if I've studied contract
law, I'll be able to determine whether the threat will hold up in court. Second, understanding
contract law has made me well aware of the code of behaviour I must follow during business
practices to avoid contract law violations. Allow me to effectively administer and manage my
business. Third, as a business student, I am aware that the business world is governed by the
law. By learning contract law, If I study contract law, I will be better prepared for future jobs
or entrepreneurship.

3
3.0 References
gersmarter. (2016, November 30). Retrieved from How does contract law affect businesses?:
https://www.getsmarter.com/blog/career-advice/contract-law-affect-businesses-faqs/
Law Teacher. (2021, August 31). Retrieved from Malaysian Contract Law:
https://www.lawteacher.net/free-law-essays/contract-law/malaysian-contract-law-
essay.php#citethis
Law Teacher. (2021, September 24). Retrieved from Contract Act 1950 Summary:
https://www.lawteacher.net/free-law-essays/contract-law/principal-of-contract-law-
essay.php
Mehren, A. T. (n.d). Contract Law . Retrieved from Beitannica:
https://www.britannica.com/topic/performance-contract-law