finance
Q2a) Pak Mat signed an agreement to transfer his apartment to his daughter, Aminah as a gift for her 21st birthday. Aminah did not pay any money to her father for the transfer of the apartment. This agreement was later registered at the land office.
Section 26 provides that as a general rule, an agreement without consideration is void unless it is registered under the law (if applicable) and expressed in writing as well as is made on account of natural love and affection between partiers standing in a near relation to each other. Consideration is defined in section 2(d) of the said Act as:
‘When at the desire of the promisor, the promise or any other person has done or abstains from doing or promises to do or to abstain from doing something, such act or abstinence or promise is called consideration for the promise’.
In another word, an agreement made on account of natural love and affection is binding if the requirements below are present:
It is expressed in writing
It is registered (if applicable)
The partiers stand in near relation to each other.
Applying the above principles, as the agreement for the transfer of the apartment from Pak Mat to his daughter, Pak Mat was in writing and registered at the land office, the agreement on account of natural love and affection is valid although Aminah does nothing in return for the transfer of the apartment from her father. This contract is valid.
b) ABC Bhd entered into a contract with XYZ Bhd to buy an office block at RM500, 000. The market price of the office block is RM1 million.
Section 26 Contract Act 1950 provides that ‘an agreement to which the consent of the promisor is freely given is not void merely because the consideration is inadequate but the inadequacy may be taken into account by the court in determining whether the consent of the promisor was freely given’. There are the essential elements of a valid contract;
•Proposal(offer)
•Acceptance
•Intention to create legal relation
Section 26 provides that as a general rule, an agreement without consideration is void unless it is registered under the law (if applicable) and expressed in writing as well as is made on account of natural love and affection between partiers standing in a near relation to each other. Consideration is defined in section 2(d) of the said Act as:
‘When at the desire of the promisor, the promise or any other person has done or abstains from doing or promises to do or to abstain from doing something, such act or abstinence or promise is called consideration for the promise’.
In another word, an agreement made on account of natural love and affection is binding if the requirements below are present:
It is expressed in writing
It is registered (if applicable)
The partiers stand in near relation to each other.
Applying the above principles, as the agreement for the transfer of the apartment from Pak Mat to his daughter, Pak Mat was in writing and registered at the land office, the agreement on account of natural love and affection is valid although Aminah does nothing in return for the transfer of the apartment from her father. This contract is valid.
b) ABC Bhd entered into a contract with XYZ Bhd to buy an office block at RM500, 000. The market price of the office block is RM1 million.
Section 26 Contract Act 1950 provides that ‘an agreement to which the consent of the promisor is freely given is not void merely because the consideration is inadequate but the inadequacy may be taken into account by the court in determining whether the consent of the promisor was freely given’. There are the essential elements of a valid contract;
•Proposal(offer)
•Acceptance
•Intention to create legal relation