Coincidentally, Henry was searching for a condominium unit in Kuala Lumpur when he stumbled upon an advertisement in a popular real estate magazine. He immediately called Hector’s Agent, Tom, who claimed to be the agent for the property to arrange for viewing of the property and to discuss the terms of purchase. They met on 01.05.2019.

After having inspected the property and being satisfied with its condition, Henry made an offer to purchase the property for RM2.0 million. Tom informed Hector and he immediately rejected Henry’s offer and told him, “I am afraid your offer is too low, and someone else had already offered to purchase this property for RM2.3 million. However, I am willing to sell it to you for RM2.1 million (“Purchase Consideration or purchase price”). Are you still interested?” Henry expressed his interest in the property but could not make up his mind. He persuaded Hector to give him three (3) days to revert to him. Hector agreed and added, “I would only agree to your request subject to receiving two per centum (2%) of the Purchase Consideration of the property (Earnest Deposit) as a confirmation of your acceptance on or before 05.05.2019. You would also be required to pay the remaining eight per centum (8%) of the ten per centum (10%) deposit (Deposit Balance) upon execution of a sale and purchase agreement (“Agreement”) in respect of the property and the balance of the purchase price within three (3) months of the date of the Agreement….”. Henry acknowledged the terms of the proposal.

      

Henry’s solicitors made a search of the title in respect of the property at the relevant land office and the information on the official search report confirmed that Hector was the registered proprietor of the property and free from encumbrances from the search done on the register document of title.

 

Henry was satisfied with the information on the official search report and decided to purchase the property. On 05.05.2019, Henry contacted Hector on many attempts but without any success. Without further delay, he sent his acceptance of the offer and enclosed a cheque for the Earnest Deposit issued in favor of Hector by courier service informing him of his acceptance.

      

Meanwhile, Hector had a change of mind in selling his property after he had spoken to his wife who was working in the property sector who had told him that it was not a good time to sell his property. Hector was advised to hold onto the sale of his property for another twelve (12) months if he wanted a higher price for his property. On the 03.05.2019, Hector telephoned Henry and told him that he has decided not to sell the property and that he was withdrawing the offer. Henry was furious and told Hector that they have a valid Agreement.

           

Later in the evening of 05.05.2019, Hector received Henry’s acceptance letter. He immediately returned the cheque to Henry, even though he protested and kept on insisting that they have a valid Agreement for the sale and purchase of Hector’s property. Henry threatened to commence legal action against Hector to enforce the Agreement.

 

REQUIRED:

   -Advise Henry on whether he would be successful in obtaining a remedy for Specific Performance. (4 marks)                  

  -Advise Henry on the legality of the alleged agreement if subsequently, he discovers that Hector is an undischarged bankrupt. (4 marks)