Case of Marina Juki Vs Zizan Razak (malaysia)

Facts:

On May 3, 2011 the defendant (Mohd Razizan bin Ab Razak) entered into a written agreement with the plaintiff (Marina Juki) for the 4 years contract that stated the defendant had agreed to appoint plaintiff as his personal assistant that supposed to expire on May 2, 2015. In the contract, the plaintiff was entitled to 15 per cent commission on all income earned by the defendant throughout the period.

However, before the contracts ends, the defendant had signed a contract with Astro worth RM2 Millions without the plaintiff’s endorsement. Astro disclosed that the defendant had come under its management starting on May, 2014.

By signing the contract with Astro before their contract ends, the plaintiff claims that the defendant had breach of agreement that was made between them and caused the damages to the plaintiff.

Issues:

i) Whether there is valid contract made between plaintiff and defendant.

ii) Whether the defendant had breach the contract by signing the Astro’s contract before the contract made with the plaintiff ends.

iii) Whether the plaintiff can claim for compensation on breach of contract by the defendant.

Principles:

Section 2(a) of the Contracts Act 1950 provides, “when one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other...he is said to make a proposal.” According to the above section, when a person (i.e. offeror) promises or proposes something to another party (i.e. offeree) with the intention that his promise/ proposal would be accepted by the offeree, the person (offeror) is said to make an offer.

The first element is offer which stated in Section 9 of the Contacts Act, 1950 provides, “So far as the proposal...is made in words, the promise is said to be express. So far as the proposal is made otherwise than in words, the promise is...implied.” There are two types of offer which are, i) Specific offer is the offer is addressed to a specific/ particular person (addressee) and only the addressee may accept the offer. ii) General offer is such offer is addressed generally to anyone who may satisfy all the terms or conditions of the offer stipulated by the offeror.

For a valid contract, an offer must be certain. In Guthing v Lynn (1983) said that Lynn offered to buy a horse from Guthing on condition that if the horse brings luck to him, he will pay another $5 extra. The court held that the offer was not final & incomplete. Therefore it was invalid.

An offer must be communicated to the promisee. Otherwise the offer is not valid. In Section 4(1) of the Contract Act 1950 provides that, “The communication of the proposal is complete when it comes to the knowledge of the person to whom it made.”

Second element is acceptance. In Section 2(b) of the Contract Act 1950 said acceptance is, “When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted; a proposal, when accepted, becomes a promise.” According to this section, if the offeree (to whom the offer is made) agrees or accepts the offer made by the offeror, there is acceptance to such offer. Once there is an acceptance, an agreement between the parties is created. A contract exists and it is binding upon the parties.

Third element is consideration Section 2(d) of the Contract Act 1950 stated that ‘consideration’ is something, which has ‘value’ in the eyes of law and it becomes the basis of the contract. It is an act or abstinence or promise by the promisee or any other person, as required by the promisor in return for his promise. In Currie V Misa, the court held that a valuable consideration, in the sense of the law, may consists of some rights, interests, profits or benefits accruing to the one party; or some forbearances, detriments, losses or responsibilities given, suffered or undertaken by the other.

Fourth element is capacity. Section 10(1) of the Contract Act 1950 provides, “All agreements are contracts if they are made by...parties competent to contract...” According to this provision, a contract is enforceable if the parties to the contract are competent/ having the capacity to make a contract. A person is competent to contract if he is an adult (attains the age of majority at 18), sound mind and not disqualified from contracting by any law. In Tan Hee Juan v Teh Boon Keat (1934), stated that plaintiff (a minor) contracted to transfer his land to the defendant. Later, the plaintiff applied to the Court for an order setting aside the contract. The Court held that the contract was void. The Court ordered the restoration of the land to the minor.

Fifth element is intention to create legal relation. Without intention to create legal relation, there is no contract. To determine whether intention exists or not, law divides agreements into 2 classes which are commercial/ business agreement and social, domestic and family agreement. For commercial agreements, the law presumed that ‘common intention’ exists between the parties to have legal relation. The contract is binding on the parties. In Low Kar Yit v Mohd Isa, the court held that on the construction of the document sued upon, the option was conditional upon and subject to a ‘formal contract’ to be made later and agreed upon between the parties. The exercise of the option by the plaintiff amounted to nothing more than an agreement to enter into another agreement.

Sixth element is certainty of contract. The terms of the contract must be certain and definite. Section 30 of the Contracts Act 1950 provides that “Agreements, the meaning of which is not certain, or capable of being made certain, are void.”

Seventh element is free consent. In Section 10(1) of the Contract Act 1950 stated, “All agreements are contracts if they are made by free consent of parties...” The consent of the parties to the contract must be given freely and voluntarily.

When a contract is ‘discharged’, it is actually terminated. Once a contract is ‘discharged’, the contacting parties are free from further obligations under the contract. The contract may be discharged by any one of the following modes: 1) by performance of the contract, or 2) by consent or agreement between the parties of the contract, or 3) by impossibility of performance/ frustration, or 4) by