1.Please answer all questions with support of decided cases and provisions in the Contract Act 1950.

QUESTION ONE

(a)" It is necessary to remember that there are agreements between parties which do not result in contracts within the meaning of that term in our law. The ordinary example is where two parties agree to take a walk together, or where there is an offer and an acceptance of hospitality. Nobody would suggest in ordinary circumstances that those agreements result in what we know as a contract." Per Atkin L.J. in Balfour v. Balfour [1919] 2 K.B. 571, at p.578

In the light of the above statement, compare the presumption of courts in relation to intention to create legal relations in social and domestic agreements with business/commercial agreements.

(5 marks)

(b) Mrs Aini wrote to her daughter, Alia offering her a monthly allowance if she would give up her lucrative job in Singapore and come back to Kuala Lumpur to study to become a doctor. Alia, who has just bought an apartment in Singapore sold her new apartment and came back to Kuala Lumpur to stay with her mother and study medicine. Two years later, there was a dispute between Mrs Aini and Alia pertaining to the ownership of the house, which was jointly bought by Mrs Aini and her deceased husband, who is also Alia's father. Alia had not even passed half of her exams. Mrs Aini asked Alia to move out and she refused to pay Alia monthly allowances as promised in her letter. 5 Advise Alia whether she can claim the monthly allowances and her right to stay in the house.

(5 marks)

QUESTION TWO

a)"Where, however, it is reasonable for the offeree to notify acceptance by post, telegram, or telemessage, the acceptance is completed when the letter is posted, the telegram handed in, or possibly when the telemessage is dictated."

(J Beatson, Anson's Law of Contract, 28th ed., 43.)

Briefly explain the above rule, and state how an offeror may avoid the application of such rule in the delivery of acceptance by post.

(5 marks)

b)Rani, a 16 year old girl eloped with Rajiv who is 17 years old. They got married in Thailand and registered the marriage in Kuantan. They rented a house in Kuantan to live in. Rajiv borrowed RM 5,000 from Chettiar stating that he was 21 years old. With part of the money, he bought a second hand motorcycle from Mr. Tan. When her parents got to know of her whereabouts, they picked Rani up and brought her back home. Her father told Rajiv that he refused to accept him as his son in law and claimed that the marriage was not valid as she is still a minor. Meanwhile the landlord and Mr. Tan claimed from Rajiv the rent due and the balance payment of the motorcycle respectively. Chettiar wants his money back.

Discuss.

(5 marks)