Question 2

Each year, the Great Malaysian Cross-Country Bicycle Race is held. The race starts in Putrajaya and ends in Dataran Merdeka, Kuala Lumpur. The promoters of the race, "Jaguh Sdn. Bhd. (JSB)," offer a first prize of RM250, 000 to the rider who is the first to reach the finish line in Dataran Merdeka. They also offer a RM 10,000 bonus for the first racer to reach Perlis and another RM 10,000 bonus for the first racer to reach Johor. Zaim Khalif is a professional bicycle racer who has entered this year's race and is determined to win. The record time for finishing the race is six days. Riders typically spend 21 hours a day on the bike. Zaim purchased two bicycles, hires a three-person support crew and rented an MPV for purposes of competing in the race. The Race starts on May 1st and Zaim indeed is one of the competitors getting off to a fast start. He is the first cyclist to reach both Perlis and Johor.

On May 5th, when Zaim is about two hours north of Johor and heading towards Selangor, JSB decides that due to unforeseen financial difficulties faced by their company, they will not be financially able to award any of the prize money, including bonuses to the competitors. They promptly notify each competitor by calling their respective support crew and telling them that they will be unable to pay any of the prize money and that they are canceling the race. Zaim's team manager relays the bad news to him. Rather than immediately cease competing Zaim decides to continue to Kuala Lumpur towards Dataran Merdeka. However, all other competitors chose to abandon the race after hearing the news about JSB's cancellation. Two days later Zaim crosses what would have been the finish line in Dataran Merdeka.

At this point, Zaim has spent RM20,OOO in costs to compete in the race. Zaim estimates that it cost about RM2,500 for each day he continues in the race in expenses, which includes food, payment for the crew, petrol for the MPV etc. Zaim feels he is entitled to the RM250, 000 first prize as well as the RM 20,000 bonus money for being the first competitor to reach Perlis and Johor. JSB has refused to pay any portion of the prize money, citing frustration of contract. The very least that they offer is to return back the RM2,000 registration and race fee that Zaim has paid at the beginning of the race.

Discuss whether there exists a valid contract between Zaim and Jaguh Sdn. Bhd and whether Zaim is entitled to claim any compensation from Jaguh Sdn Bhd. (25 MARKS)