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BUSINESS LAW
(LAW101)
Tutorial Questions
Midterm Revision
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Questions on MLS 1
1. Explain any SIX (6) sources of law?
2. In what situation can judges in Malaysia refer to English
Common Law.
3. Identify and explain any TWO (2) advantages and any
TWO (2) disadvantages of judicial precedent.
4. Briefly explain the difference between declaratory and
original precedent.
5. Explain how the doctrine of binding judicial precedent
operates.
6. In what situations can judges of lower courts choose not
to follow a judicial precedent
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MLS 1 – Q1
• Explain any SIX (6) sources of law?
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Answer
• Constitution
• Legislation
• Subsidiary legislation
• Judicial precedent
• English common law
• Custom
• Muslim law
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MLS 1 – Q2
• In what situation can judges in Malaysia refer to English
Common Law
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Answer
• Judges in Malaysia can refer to English Common Law
provided: -
• There is no Malaysian law in the area in which the judge is making
a decision
• Judges should only refer to those English common law that is
suited to local circumstances
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MLS 1 – Q3
• Identify and explain any TWO (2) advantages and any
TWO (2) disadvantages of judicial precedent.
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Answer
The advantages are: -
• It provides greater certainty in the law.
• Its practical character through development out of real situations as opposed
to the hypothetical as occurs in statute law. This avoids the problem of
uncertainty in interpretation of statutes.
• It gives the opportunity for development of law more rapidly than Parliament.

The disadvantages are: -

• Case law is extremely bulky and inaccessible - it may be necessary to
consider a very large number of cases in order to ascertain the law on a
particular subject area.
• Judges are not elected by the people unlike members of Parliament who are
representative of the people. Therefore, judges may not know the needs of
the general public when making these case laws.
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MLS 1 – Q4
• Briefly explain the difference between declaratory and
original precedent.
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Answer
• If a judge applies an existing rule of law without extending
it, his decision may be called declaratory precedent
• If the case before him is without precedent, then the
decision made by him may be called an original precedent
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MLS 1 – Q5
• Explain how the doctrine of binding judicial precedent
operates.
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Answer
• These are laws which are made by judges
• When a judge makes a decision, his decision may end up
becoming a law
• When a judge makes a decision in a case he is deciding,
this decision must be followed by all judges of lower
courts provided the facts of the case is similar
• This can be found in the judicial decisions of the High
Court, Court of Appeal and the Federal Court and the then
Supreme Court, High Court and the Judicial Committee of
the Privy Council
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MLS 1 – Q6
• In what situations can judges of lower courts choose not
to follow a judicial precedent
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Answer
• Judges may ignore or overrule a precedent laid
down by a higher court, where the case is on
appeal
• They may refuse to apply the earlier precedent if
it is arrived at per incuriam (i.e. made in
ignorance of a statute or a binding precedent)
• They may distinguish the case when they find
there are material differences in facts between
the case before them and the case laying down
the precedent
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Questions on MLS 2
1. Explain any FOUR (4) advantages of arbitration.
2. Explain any FOUR (4) disadvantages of litigation.
3. According to University Act 2021 , “Smoking in universities is not
allowed in cafeteria, classrooms and any other places”. Sam was
caught smoking at the university jogging track. Explain whether
Sam has committed an offence under the University Act 2021.
4. Traffic Act 2019 states that “Anyone who is involved in an accident must
stop in order to ensure that relevant information can be exchanged
between the parties involved in the accident”. Sam was involved in an
accident and he just drove off without stopping. He has been charged
under this Act for not stopping. His lawyer argued that he did stop for one
second and as such, he did not breach the Act. Explain whether Sam has
committed an offence under the Traffic Act 2019.
5. With reference to case laws, explain the golden and the mischief rule.
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MLS 2 – Q1
• Explain any FOUR (4) advantages of arbitration.
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Answer
• Privacy - proceedings are private as opposed to litigation
proceedings where the final hearing is in an open court.
Thus private & confidential matters are not revealed to
members of the public
• Expertise / Experience - generally the arbitrator will be
selected for his skill and experience in the area disputed
• Dispute can be settled fast
• The award is binding
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MLS 2 – Q2
• Explain any FOUR (4) disadvantages of litigation.
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Answer
• Expensive
• Delays
• No privacy
• Too many formalities
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MLS 2 – Q3
• According to University Act 2021 , “Smoking in universities
is not allowed in cafeteria, classrooms and any other
places”. Sam was caught smoking at the university
jogging track. Explain whether Sam has committed an
offence under the University Act 2021.
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Answer
 In this case, Ejusdem Generis Rule should be applied. The judge
must confine the meaning of the general word to the meaning of the
specific word in order to understand the general word (Powell v
Kempton Park Racecourse).
 “Cafeteria” and “classrooms” refer to specific words, whereas “any
other places” refer to general word. If so, “any other places” here
mean “any other indoor places”.
 As the jogging track is outdoor, Sam did not commit an offence
under the University Act 2021.
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MLS 2 – Q4
• Traffic Act 2019 states that “Anyone who is involved in an
accident must stop in order to ensure that relevant information
can be exchanged between the parties involved in the accident”.
Sam was involved in an accident and he just drove off without
stopping. He has been charged under this Act for not stopping.
His lawyer argued that he did stop for one second and as such,
he did not breach the Act. Explain whether Sam has committed
an offence under the Traffic Act 2019.
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Answer
• In order to determine the meaning of the word “stop” in
the Traffic Act 2019 , the Golden Rule can be used.
According to this Rule, the judge will depart from the
normal meaning of the word to the extent that it is
necessary to give a sensible result. In Lee v Knapp, the
courts held that ‘stop’ meant stopping for as long as is
reasonable in the circumstances to enable the other driver
to get information s/he is entitled to under the act. Thus,
similarly the word ‘stop’ in the Traffic Act 2019 would also
mean the same. It does not mean stopping for one
second. Since Sam was involved in an accident and he
just drove off without stopping, he has committed an
offence under the Act
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MLS 2 – Q5
• With reference to case laws, explain the golden and the
mischief rule.
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Answer
The golden rule

• This is applied where application of the ordinary everyday meaning of the word would lead to
an absurd result

• The judge departs from the normal meaning of the word to the extent that it is necessary to
give a sensible result

• Briefly explain any case law e.g. Alder v George

The mischief rule

• This is applied where the words of the Act are ambiguous & uncertain

• The court under this principle ascertains the mischief which existed before the Act and what
interpretation best gives effect to the cure intended by the Act

• Briefly explain any case law e.g. Smith v Hughes

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Questions on Contract (Essay)

1. Identify and briefly explain any FIVE (5) elements of a
contract.
2. Explain whether past consideration will create a valid
contract
3. Explain THREE (3) types of consideration
4. In a formation of a contract, consideration need not be
adequate. Discuss
5. Discuss the TWO (2) different types of past
consideration
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Contract – Q1
• Identify and briefly explain any FIVE (5) elements of a
contract.
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Answer
• Offer/proposal
• Acceptance
• Consideration
• Intention to create legal relations
• Legality
• Capacity
• Formality
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Contract – Q2
• Explain whether past consideration will create a valid
contract
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Answer
• Past consideration will create a valid contract
• Past consideration refers to a situation where
performance is done first, promise to pay is done later
• This is stated in s2(d), s26(b) and illustration (c) to s26 CA
1950
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Contract – Q3
• Explain THREE (3) types of consideration
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Answer
 Based on the definition given in s2(d) CA 1950,
there are 3 types of consideration, namely
 Executed
 Executory
 Past
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Contract – Q4
• In a formation of a contract, consideration need not be
adequate. Discuss
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Answer
• Under Malaysian law, the consideration need NOT BE
adequate BUT must be SUFFICIENT
• Explanation 2 to s26 Contracts Act 1950 provides that an
agreement is not void merely because the consideration is
inadequate
• Illustration (f) to s26 Contracts Act 1950 shows the
application of the rule: -
“A agrees to sell a horse worth $1000 for $10…The
agreement is a contract notwithstanding the inadequacy
for the consideration.”
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Contract – Q5
• Discuss the TWO (2) different types of past consideration
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Past Consideration

S2(d) CA 1950 S26(b) CA 1950

Illustration (c) to s26 CA 1950

… at the DESIRE of the S26(b) CA 1950 … it is a

promisor … has done or promise to compensate a person
abstained from doing who has ALREADY
VOLUNTARILY DONE
something for the promisor

It is restricted only to Illustration (c) to s26 CA 1950

cases where there has “A finds B’s purse and gives it
been a PRIOR REQUEST to him. B promises to give A
by the promisor $50. This is a contract”
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Questions on Contract (Problem)

1. Ali offered to sell his house to Sufian by letter. Sufian accepted the offer by posting a registered letter to Ali on 23
December 2017. On 26 December 2017, Ali telephones Sufian informing him that his house is no longer for sale
and he is revoking the offer. Sufian’s letter accepting the offer is only received by Ali on 27 December 2017.
Advise Sufian as to whether there is a valid contract or not.
2. T advertised his speed-boat in a newspaper for RM4,000. S wrote back offering to buy the speed-boat for
RM3,500. T replied by return of post stating that he would accept RM3,750. Having received no reply from S, T
wrote again saying he would accept his offer at RM3,500. Advise T
3. Ling lost her cat, Mimi. She put some posters around her housing estate offering a reward to any person who
returns Mimi to her. Ram who knows Ling and her cat found Mimi. He immediately went to Ling’s house and
returned the cat to Pat. He was completely unaware of the reward. Today while Ram was walking in the housing
estate, he saw the poster put by Ling offering the reward. He immediately went to Ling’s house demanding for the
reward, but Ling refused to give any. Advice Ram
4. On 1 August 2006 Samy received a written offer from Chong for the purchase of Samy’s antique gramophone for
the sum of RM15,000. The letter expressly stated that if Samy did not reply within two weeks Chong would
presume that Samy had accepted the offer. Samy did not reply. Chong now claims that there is a binding contract
between him and Samy. Samy wishes to know the legal position.
5. The local police were looking for a suspected murderer. So, they put up advertisement offering a reward of
RM10,000 to anyone to gave any information about the suspect leading to his arrest. Ali who is unaware of
the reward, walks in the police station and gave some vital information about the suspect which lead to his
arrest. Ali who is now aware of the reward, wants the reward. Discuss whether Ali is entitled for the
reward.
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Contract – Q1
• Ali offered to sell his house to Sufian by letter. Sufian
accepted the offer by posting a registered letter to Ali on
23 December 2017. On 26 December 2017, Ali
telephones Sufian informing him that his house is no
longer for sale and he is revoking the offer. Sufian’s letter
accepting the offer is only received by Ali on 27 December
2017. Advise Sufian as to whether there is a valid contract
or not.
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Answer
Issue
• Is there a valid contract?
Law & Application
• When Ali send a letter offering to sell his house to Sufian, this is an offer/proposal
• Offer/proposal is defined in s2(a) Contracts Act 1950 (CA 1950) as “… when one person signifies to
another his willingness to do or to abstain from doing anything, with a view to obtaining the assent
of that other to the act or abstinence, he is said to make a proposal”
• On 23 December 2017, when Sufian sent a letter accepting the offer, this is acceptance
• Acceptance is defined in s2(b) CA 1950 as “… when the person to whom the proposal is made
signifies his assent thereto, the proposal is said to be accepted: a proposal, when accepted,
becomes a promise”
• This is because according to the postal rule of acceptance, acceptance takes place the moment
the letter is posted provided the letter is correctly addressed and stamped (s4(2)(a) CA 1950)
• Thus, there is a contract between Ali and Sufian which was created on 23 December 2017
• On 26 December 2017, Ali telephoned Sufian informing him that the offer is revoked
• According to s5(1) CA 1950, an offer can be revoked at any time before acceptance
• However, since the offer was already accepted on 23 Dec 2017. Thus, Ali cannot revoke the offer
because it has already been accepted by Sufian
Conclusion
• There is a contract here between Ali and Sufian
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Contract – Q2
• T advertised his speed-boat in a newspaper for RM4,000.
S wrote back offering to buy the speed-boat for RM3,500.
T replied by return of post stating that he would accept
RM3,750. Having received no reply from S, T wrote again
saying he would accept his offer at RM3,500. Advise T.
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Answer
• Issue
• Is there a contract between T and S?
• Law & application
• When T advertised his speed-boat in a newspaper for RM4,000, this is an invitation to treat
(Majumder v Attorney).
• An invitation to treat is an invitation to people to make offers
• When S wrote back offering to buy the speed-boat for RM3,500, this is an offer/proposal
• Offer/proposal is defined in s2(a) Contracts Act 1950 (CA 1950) as …
• When T replied by return of post stating that he would accept RM3,750, this is not acceptance
• Acceptance is defined in s2(b) CA 1950 as …
• Acceptance must be absolute and unqualified (s7(a) CA 1950)
• T’s acceptance is not absolute and is qualified
• This is actually a counter offer (s6(c) CA 1950) and a counter offer will revoke the original offer
(Hyde v Wrench)
• When T wrote again saying he would accept his offer at RM3,500, this is not acceptance but a
new offer/proposal since the original one was revoked by his counter offer. This is a new offer
• Conclusion
• There is no contract here
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Contract – Q3
• Ling lost her cat, Mimi. She put some posters around her
housing estate offering a reward to any person who
returns Mimi to her. Ram who knows Ling and her cat
found Mimi. He immediately went to Ling’s house and
returned the cat to Ling. He was completely unaware of
the reward. Today while Ram was walking in the housing
estate, he saw the poster put by Ling offering the reward.
He immediately went to Ling’s house demanding for the
reward, but Ling refused to give any. Advice Ram
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Answer
• Issue
• Can Ram claim the reward?
• Law and application
• When Ling put the poster, this was an offer/proposal (Carlill’s case)
• Offer/proposal is defined in s2(a) Contracts Act 1950 (CA 1950) as “when one person signifies
to another his willingness to door to abstain from doing anything, with a view to obtaining the
assent of that other to the act or abstinence, he is said to make a proposal.”
• Acceptance is defined in s2(b) CA 1950 as “when the person to whom the proposal is made
signifies his assent thereto, the proposal is said to be accepted: a proposal,when accepted,
becomes a promise”
• On the facts, Ram had no knowledge of the reward when he returned the cat
• As such, he may not be entitled for the reward
• S4(1) CA 1950 states that an offer is communicated when it is brought to the knowledge of the
offeree
• Thus, since Ram had no knowledge of the reward when he returned the cat to Ling, the offer
was not valid as far as he was concerned (s4(1) CA 1950)
• As such, there is nothing for Ram to accept and he is not entitled to the reward offered by Ling
• Conclusion
• Ram cannot claim the reward
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Contract – Q4
• On 1 August 2006 Samy received a written offer from
Chong for the purchase of Samy’s antique gramophone
for the sum of RM15,000. The letter expressly stated that
if Samy did not reply within two weeks Chong would
presume that Samy had accepted the offer. Samy did not
reply. Chong now claims that there is a binding contract
between him and Samy. Samy wishes to know the legal
position.
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Answer
Issue
Is there is a valid contract between Samy and Chong?
Law and application
• On the facts, when Samy received a written offer from Chong for the purchase of Samy’s antique
gramophone for the sum of RM15,000 on 1 August 2006, this was an offer (s2(a) Contracts Act
1950)
• Offer/proposal is defined in s2(a) Contracts Act 1950 (CA 1950) as “when one person signifies to
another his willingness to door to abstain from doing anything, with a view to obtaining the assent
of that other to the act or abstinence, he is said to make a proposal.”
• In that letter, Chong stated that if he did not hear from Samy within 2 weeks, he will assume that
Samy has accepted the offer. Chong cannot assume so because according to Felthouse v Bindley,
silence does not amount to acceptance
• Acceptance is defined in s2(b) CA 1950 as “when the person to whom the proposal is made
signifies his assent thereto, the proposal is said to be accepted: a proposal,when accepted,
becomes a promise”
• Thus, when Samy did not respond within 2 weeks, this was not acceptance
Conclusion
There is no contract here
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Contract – Q5
• The local police were looking for a suspected murderer. So, they put up
advertisement offering a reward of RM10,000 to anyone to gave any information
about the suspect leading to his arrest. Ali who is unaware of the reward, walks in the
police station and gave some vital information about the suspect which lead to his
arrest. Ali who is now aware of the reward, wants the reward. Discuss whether Ali is
entitled for the reward.
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Answer
• Issue
• Can Ali claim the reward?
• Law and application
• When the police put the poster, this was an offer/proposal (Carlill’s case)
• Offer/proposal is defined in s2(a) Contracts Act 1950 (CA 1950) as “when one person signifies
to another his willingness to door to abstain from doing anything, with a view to obtaining the
assent of that other to the act or abstinence, he is said to make a proposal.”
• Acceptance is defined in s2(b) CA 1950 as “when the person to whom the proposal is made
signifies his assent thereto, the proposal is said to be accepted: a proposal,when accepted,
becomes a promise”
• On the facts, Ali had no knowledge of the reward when he shared the information
• As such, he may not be entitled for the reward
• S4(1) CA 1950 states that an offer is communicated when it is brought to the knowledge of the
offeree
• Thus, since Ali had no knowledge of the reward when he gave the information, the offer was not
valid as far as he was concerned (s4(1) CA 1950)
• As such, there is nothing for Ali to accept and he is not entitled to the reward offered by police
• Conclusion
• Ali cannot claim the reward
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QUESTIONS