State whether Abu is required by consideration to fulfil his promises in the following situations and explain the reasons for your answer with relevant authorities.

 

Abu promises to sell an expensive car to Rafiq for RM1,000. 

(6 marks)

 

Abu returns home and finds that Jack had cleaned his house and he promises to pay RM100 for his work.

 

(6 marks)

 

Abu promises to release Ali from debt of RM2,500 if Ali pays him RM1,200 in November 2020.

(7 marks)

 

Abu promised to pay his brother RM300 per month until his brother start working, so that Abu's father will transfer his car to Abu name. 

 

 

1.

No, Abu is not required to fulfill his promise to sell an expensive car to Rafiq for RM1,000. 

Section 25 of Contract Act of 1950 states that:

" An agreement made without consideration is void, unless—

(a) it is expressed in writing and registered under the law (if any) for the time being in force for the registration of such documents, and is made on account of natural love and affection between parties standing in a near relation to each other;

or is a promise to compensate for something done;

(b) it is a promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, or something which the promisor was legally compellable to do; or or is a promise to pay a debt barred by limitation law ;

(c) it is a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorized in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits. 

In the case at bar, Abu promises to sell an expensive car to Rafiq for RM1,000. This is not a perfected contract because the promise was not supported by any consideration and it does not fall within any of the exceptions provided for under the law. Therefore, Abu is is not required to fulfill his promise to sell an expensive car to Rafiq.

2.

Yes, Abu is required to fulfill his promise to Jack to pay him RM100 for his work.

Section 26(b) of Contracts Act 1950 states that:

" An agreement made without consideration is void, unless—

(b) it is a promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, or something which the promisor was legally compellable to do; or or is a promise to pay a debt barred by limitation law."

In the case at bar, Abu returns home and finds that Jack had cleaned his house and he promises to pay RM100 for his work.

Applying the law, the promise of Abu is binding because it is a promise to compensate a person who has already voluntarily done something which the promisor was legally compellable to do. Hence, since Jack had voluntarily cleaned the house of Abu and Abu promises to pay him, such promise is valid and binding against Abu.

Therefore, Abu can be compelled to fulfill his promise to pay Jack.

3.

Abu is required to fulfill his promise to release Ali from debt.

Section 2 (d) of the Contract Act 1950 states that:

" when, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise"

In the case at bar, Abu promises to release Ali from debt of RM2,500 if Ali pays him RM1,200 in November 2020. Applying the law, the promise is supported by a consideration because the promise is conditioned on the fact that Ali, the promisee, promises to do something, which is to pay Abu RM1,200 in November 2020.

Furthermore, in an agreement where the consent of the promisor is freely given will not be void because the consideration is inadequate. Hence, the fact that Abu will release the debt of RM2,500 for only RM1,200 will not make the agreement void because it is still supported by a consideration.

Therefore, Abu is required to fulfill his promise to release Ali from debt of RM2,500 if Ali pays him RM1,200 in November 2020.

4.

Abu is required to fulfill his promise to pay his brother.

Section 2 (d) of the Contract Act 1950 states that:

" when, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise"

In the case at bar, Abu promised to pay his brother RM300 per month until his brother start working, so that Abu's father will transfer his car to Abu name. Applying the law, there is a valid agreement because the promise of Abu is supported by a consideration that his father will transfer his car to the name of Abu. The act of transferring the car to the name of Abu is considered to be a consideration for the promise because the promisee is required to do something in return of the promise of Abu.

Therefore, since there is a valid contract, Abu is required to fulfill his promise to to pay his brother RM300 per month until his brother start working.