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Dato’ Amir wants to give his bungalow house to his son Zack without payment. He is worried the transfer may be void without consideration. However, contracts made from natural love and affection between close relations are valid even without consideration. Therefore, Dato’ Amir can legally give the bungalow to his son.

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Natasya Jescorin
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42 views

Tutorial 3 PDF

Dato’ Amir wants to give his bungalow house to his son Zack without payment. He is worried the transfer may be void without consideration. However, contracts made from natural love and affection between close relations are valid even without consideration. Therefore, Dato’ Amir can legally give the bungalow to his son.

Uploaded by

Natasya Jescorin
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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QUESTION 1

Dato’ Amir wants to give his bungalow house to his son, Zack.
However, Dato’ Amir is worried that the transfer may be void since
there is no consideration for the transfer of his bungalow house to
Zack, as Zack will not be paying any money to him. Advise Dato’ Amir.

ANSWER

The general rule is that an agreement made without consideration


is void. However, there are some exception to the general rule. One
of it is contract made on account of natural love and affection.

According to section 26 (a):

‘’an agreement… without consideration is void, unless it is


expressed in writing and registered…, and is made on account of
natural love and effection between parties standing in near relation
to each other.””

This kind of contract is valid and binding even thought without


consideration.

From Dato Amir’s case, even though there is no consideration from


his son in return to the bungalow, the agreement between them is
binding. By virtue of section 26 (a) of the Act, such contract is
binding.

In conclusion, Dato Amir can give his son the bungalow.

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QUESTION 2
Identify the possible different forms of consideration from the insurer
in relation to life insurance contracts.

ANSWER

There are several possible forms of consideration from the insurer


in relation to a life insurance contract. One of the forms is a
premium payment, for the insurer, it is a benefit provided under the
insurance whereby it is an act undertaken at the desire of the
insurer. Next, claim payment, for the insurer, it is a benefit provided
under the insurance. Hence, it is an act or promise undertaken at
the desire of the policyholder.

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QUESTION 3

Consideration is a promise, perform an act, or forbear (refrain from


doing something in relation to a contract. What if the consideration
seems disproportionate in some situations? Discuss

ANSWER

When consideration seems disproportionate in some situations,


courts will step in. In hindsight, many deals seem unfair. However,
courts rarely pass judgment on the value of the consideration
exchanged unless the two promises are so disproportionate in value
to demonstrate bad faith in the bargaining process. If a court does
judge the consideration to be unfair, the contract will probably fall
apart not because of a lack of consideration, but because the
consideration is so disproportionate that it indicates that one party
acted unfairly or concealed information that might have made the
deal a fair one. Unless this type of bad faith exists, however, courts
generally don't want to get into judging the relative value of
particular promises or items. After all, what's worth a lot of money
to one person may be worth very little to another, that's what
bargaining is all about.

This study source was downloaded by 100000855461903 from CourseHero.com on 11-10-2022 18:54:48 GMT -06:00

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