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Exercise 1

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12 views

Exercise 1

Uploaded by

aniqah0307
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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1. 'Consideration must be sufficient but need not be adequate'.

Explain and support


with suitable law and case law. (10 marks)

Consideration can be defined as payment or money and it is also a fundamental


element into a contract. Consideration may take the form of money or money’s worth. The
latter refers to cash, goods, services, promises to perform an action in the future, or a
combination of these. The value of the consideration need not be equal to the promise or
performance of the other party. However, it must be sufficient, meaning that it must have
some value. Consideration is only present when the parties mean to have an exchange.

In Bolton v Madden (1873), the parties were members of a charity and both could vote
on how the charity's funds were to be spent. They both agreed that in consideration of the
claimant using his 28 votes to support the defendant's child, the defendant would use his 28
votes to support the claimant's child. The claimant did use his votes to support the
defendant's child, but the defendant did not. The claimant sued, but the defendant argued
that the claimant had not provided him with any consideration.

However, there were considerations because the claimant had given a benefit to a
third party, which was the defendant’s child. it does not matter that the defendant himself did
not receive that benefit. Therefore, consideration can be given to a third party at the
promisor’s request.

2. Clark and his wife Karen had mutually agreed to separate. Before they began to live
separately and apart, Clark executed an agreement in writing and registered the
document wherein he promised that during the separation period he would transfer to
her bank account RM500 as monthly allowance.

The agreement also recited that there had been continuous quarrels between them
and as a result of which they had voluntarily agreed to separate. Karen sues Clark to
enforce the promise.

Discuss. (10 marks)

The issue is whether there is an intention to create legal relations between Clark and
Karen.
In Merritt v Merritt (1970), the husband and wife were separated where the husband
agreed to pay his wife and transfer the house to her. However, the wife has to pay the
instalments due on the house and the arrangements were put into writing. In this case, there
was intention to create legal relations because the husband and wife are not living in amity
and the agreed arrangements were put into writing, so the wife could take action for the
breach of contract.
In Balfour v Balfour (1919), the defendant was a civil servant stationed in Ceylon. His
wife stayed back in England on doctor’s advice.The defendant promised to send £30 a
month to the wife until he returned. Later on, they agreed to a divorce. The wife sued the
defendant for his failure to pay the £30. The court held that the parties did not intend to enter
into a legal relation.Nevertheless, the party who disagrees has the opportunity to rebut the
presumption by giving evidence to court, example language use, written agreement and the
circumstances of each case.
According to Merritt v Merritt and Balfour v Balfour, in this case, Clark and his wife,
Karen, mutually agreed to separate where Clark agreed to pay Karen a monthly
maintenance allowance of RM500 during the separation period and the arrangements were
put in writing and the document was registered.Therefore, there was intention to create legal
relations because unlike the case of Balfour v Balfour, Clark and Karen were not living in
amity and the agreed arrangements were put into writing. In conclusion, it is most likely that
there was an intention to create legal relations between Clark and Karen because there was
no amity between them and the agreement has been put into writing with the registration of
document.Therefore, they are bound by a contract with Clark and is required to pay Karen
monthly maintenance allowance. Since Clark failed to honour the agreement, Karen has the
right to sue Clark as Clark has breached the contract.

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