Kathy, a clerk, whose husband had recently died was very concern about handling her life and children without her husband's income. She explained her concern to their family's lawyer, Mr Chan, who had already advised them several times in the past. He suggested that Kathy should downsize her six bedrooms' house and move into a smaller property. Later, Mr Chan offered to buy Kathy's house for RM700,000.00 and Kathy accepted his offer. Kathy has entered into a contract to sell the house to Mr Chan. One month later, Kathy discovered that the house actually was worth around RM1,000,000.00. Kathy wanted to set aside the contract.

In the meantime, Kathy's daughter Alia, graduated from Multimedia University two years ago. Since the current economic situation is bad, Alia finds it very difficult to get a job. Kathy's friend, Datin Vee is one of the head of departments in the Ministry of Agriculture. Datin Vee entered into an agreement with Alia whereby Alia would pay her RM5,000.00 in return for a promise that Alia will be given a post in one of the units in the Ministry of Agriculture. Alia paid Datin Vee RM5000.00. Now, a year had past and Alia has not heard anything from Datin Vee. Alia tried to get back her RM5,000.00.

In order to increase her income, Kathy had established a firm, Megah & Associates (MA) with her friend Aini. Clause 7.1 of MA Partnership Agreement specifies that:

"Any dispute between the partners, must be settled through arbitration. If the dispute cannot be settled through arbitration, the parties can bring the matter before the court."

Later, there was a dispute between Kathy and Aini. Kathy who was not happy with Aini's action of bringing the dispute to court argued that Aini had breached their partnership agreement. Aini on the other hand claim that the agreement had restricted her from taking legal action.

Advise both Kathy and Alia. (20 marks)