Void Contract Case Study

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Recommended: Requirements of a valid contract

1.0 Introduction A contract is formed when two or more parties make an agreement with the consent of both parties. The meaning of contract is defined in section 2 (a) . Contracts create mutual obligations enforceable by law for an agreement between parties involved (KIM, 2017). The basic elements required to form a legally enforceable contract are offer, acceptance of offer, intention to create legal relations, consideration, certainty and legal capacity. 1.1 Void Contract The term ‘void’ is defined as null, invalid and have no legal effects (Thelawdictionary.org, 2017). Definition of void contract is in section 2 (g) . A contract is said to be void and unlawful when the stated agreements fall within any of the subsections that stated under section 24 . The effect on a contract prohibited by statute as shown in Chung Khiaw Bank Ltd v. Hotel Rasa Sayang Sdn. Bhd. & Anor . According to section 67 , companies are not allowed to give financial assistances related to purchases of shares of its holding company. In this case, the directors of Johore Tenggara Sdn Bhd purchased the shares of Hotel Rasa Sayang Bhd with the loan granted by Chung Khiaw Bank Ltd, which against this section. Simultaneously, the …show more content…

In other words, the party who rejects the contract may avoid the legal liability stated under a contract (US Legal.com, 2017). Section 10 stated all agreements that are made by the free consent of parties are contracts. The said agreement is not necessarily being enforceable when the contracts are not made by free will of the parties. Description for free consent falls under section 14 . By virtue of section 19 (1) , agreement is a voidable contract on the grounds of consent to an agreement caused by coercion, undue influence, fraud, misrepresentation or mistake. The party to the contract is able to cancel or revoke the contract when the contract is

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