'The existence of an agreement depends upon the intention of the parties, who must be ad idem. It may be inferred from the language used, the parties conduct having regard to the surrounding circumstances and the object of the contract.The court will generally apply an objective or reasonable test.'

Air Hitam Tin Dredging Malaysia Bhd v. YC Chin Enterprise Sdn Bhd [1994] 2MLJ754SC

With reference to relevant authorities, DISCUSS the above statement as to the circumstances and conditions that the courts will take into consideration when deciding whether there is a binding contract between disputing parties.

Consider among others, arrangements made 'subject to contract' or 'subject to the preparation and approval of a formal contract'.

LIST OF CASES:

1.Air Hitam Tin Dredging Malaysia v YC Chin Enterprise Sdn Bhd [1994] 2MLJ 754 SC

2.Immingham Storage Company Ltd v. Clear Plc [2011] EWCA89

3.Low Kar Yit v.Mohd Isa[1963]MLJ165

4. Quek Choon Huat v. RM Seow & Anor [1981]2MLJ3

5.Lee Chin Kok v Jasmin Arunthuthu Allegakeon [2000] 4MLJ481

6.Diamond Peak Sdn Bhd v.DR Tweedie [1981]2 MLJ31

7. Esso Standard Malaya Bhd v. Southern Cross Airways (Malaysia) Bhd [1972] 1 MLJ168