A undertakes to pay B a sum of money if a particular ship does not return. The ship is sunk. The contract can be performed if the ship sinks. If an event on which the contract depends is considered impossible, if it is the future behavior of a living person, A enters into a contract with B to sell him 100 bales of cotton, and then discovers that B acted as an agent for C. A can sue B or C or both on the price of cotton. 76. Anyone who rightly withdraws from the contract is entitled to compensation for the damage caused to him by the non-performance of the contract. 22. A contract is not voidable because it was caused by an error under a law in force in Malaysia; but an error in relation to a law that does not apply in Malaysia has the same effect as an error of fact. GRAPH 86.

Exemption from the guarantee by way of derogation from contract 185. If a person enters into a contract with another person without knowing or having reason to believe that the other person is an agent, the customer, if he demands the performance of the contract, may receive the service only subject to the rights and obligations that exist between the agent and the other contracting party. FIGURE (a) A promises to deliver the goods to B on a specific day against payment of RM1,000. Died before that day. The representatives of A are required to deliver the goods to B and B is required to pay the RM 1000 to the representatives of A. (b) A promises to paint a picture for B until a certain day at a certain price. A dies before the day. The contract may not be performed by representatives of A or B. 105. In the absence of a special contract, the depositor is not liable for the loss, destruction or deterioration of the saved object if he has taken the precautions described in Article 116 for it. In the absence of a contract to the contrary, the guarantor is obliged to hand over to the judicial officer or, according to his instructions, any increase or profit that could have resulted from the property rescued. GRAPH 189.

Contract law in Malaysia is codified under the Contracts Act 1950, which defines how to enter into a contract in Malaysia and how such a contract can be legally binding. The law also sets out the elements that limit the way in which a contract can be concluded and performed. If the said contract is breached, the said law determines how said contact can be applied in court and what remedies are available to the aggrieved party. According to the Contracts Act, the following words and expressions are used in the following senses, unless the context indicates a contrary intention: 36. (1) Conditional contracts of action or omission, if a certain uncertain event occurs within a certain period, become void if the event did not occur after the expiry of the specified period or if the event becomes impossible before the end of the specified period. Where contracts can be performed, which are contingent events that do not occur within a specified period of time 67. Type of notification or revocation of the cancellation of the cancellable contract 16. (1) A contract is deemed to be entered into by “undue influence” if the relationship between the parties is such that one of the parties is able to control the will of the others and use that position to gain an unfair advantage over the other.

(2) In particular, and without prejudice to the generality of the above principle, it is assumed that one person is capable of controlling the will of another – 20. Power to cancel contracts triggered by undue influence (e) A owes RM1,000, but debts are time-barred due to a limitation period. A signs a written promise to pay B RM500 because of the debt. It is a contract. (f) A undertakes to sell a horse worth RM1,000 for RM10. A`s consent to the agreement was given voluntarily. The agreement is a contract, regardless of the inadequacy of the consideration. (k) A concludes a contract with B for the manufacture and delivery of a particular machine to B within a given period of time at a certain price. A does not deliver the part of the machine at the specified time and B is therefore obliged to buy another one at a price higher than that which he should have paid to A and is prevented from performing a contract that B had concluded with a third party at the time of his contract with A (which was then not notified to A), and is liable to pay damages for breach of this Agreement. A must pay to B as compensation the difference between the contract price of the machine and the amount paid by B for another machine, but not the amount that B paid to the third party as compensation.

(l) A, a contractor, shall order the construction and completion of a house no later than 1 January so that B may pass it on to C, to whom B has awarded a lease.