Law
University of Malaya Contracts and Requirement of Consideration Discussion

University of Malaya

Question Description

I’m studying for my Law class and don’t understand how to answer this. Can you help me study?

QUESTION

As a general rule, an agreement without consideration is void.

- Section 26 of the Contracts Act 1950.

Discuss this statement and explain exceptions to this general rule.

(100 marks)

Your report format should be as follow:

  • Introduction that consists of explanation on meaning of consideration.
  • Explanation on exceptions of Section 26, where contract is valid even though without consideration. Must support with relevant laws and cases
  • Conclusion
  • List of References.

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INDIVIDUAL COURSEWORK QUESTION As a general rule, an agreement without consideration is void. - Section 26 of the Contracts Act 1950. Discuss this statement and explain exceptions to this general rule. (100 marks) Your report format should be as follow: • Introduction that consists of explanation on meaning of consideration. • Explanation on exceptions of Section 26, where contract is valid even though without consideration. Must support with relevant laws and cases • Conclusion • List of References. Note: Refer Appendix 1 for the marks allocation. The total marks for this assignment is 25% of overall assessment for this module. * The detailed marking criteria’s for the allocation of 25 marks for group report is provided in Appendix 1 LENGTH REQUIRED 2000 words +/- 10%. Any deviation from this will be penalized. FORMATTING AND LAYOUT • A Microsoft Office Word Document or other relevant applications as permitted by module lecturer/ typed using computer. Usage of typewriter or hand - written is STRICTLY not allowed. • 12 font size, Time New Roman font and bold title and sub titles • A4 sized paper • Fully justified alignment • 1½ line spacing • Margins of 1” at top and bottom; left and right Appendix I: Marking Criteria for Individual Coursework. Assessment Criteria Introduction Content Weightage Explanation on meaning of consideration 10% Explanation on the exceptions under Section 26, supported by relevant laws and cases 60% Conclusion Analysis the importance of consideration in contract Others Presentation of the report: • Appropriate citation and references. • Sources of references. • Style and readability including proper organization of answers. • Overall presentation. • This coursework must have a Cover Sheet, Table of Content and Page Number and Proper Heading/Title for each part answered, list of references (Use any referencing system that is suggested by the faculty) Total marks Overall Marks 10% 3% 10% 3% 4% 100% 25% Marks Allotted by Lecturer ...
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Final Answer

Attached.

Running head: CONSIDERATION IN CONTRACTS

Consideration in Contracts
Student’s Name
Institutional Affiliation
Date

1

CONSIDERATION IN CONTRACTS

2
Introduction

Contracts are essential in the field of business because they define boundaries to a
relationship between people working together (Agarwal, 2018). The contract lists the
responsibilities and obligations each business party owes the other. Since a deal is a legally
enforceable document, there are components of the contract that need to be present for it to be
considered as valid. One of these components is a consideration. It is a legal concept that arose
from the traditional idea of "bargained-for exchange" (Agarwal, 2018). Such a concept loosely
means that when two people agree to enter a contractual relationship, they must be willing to
part with something of value. Typically, this item of value would be money. However, over
time, courts have accepted that other items can be considered as consideration (Agarwal, 2018).
The value of the consideration payable by a person seeking to enter into a contractual
relationship with another person is regarded as being a matter of agreement between the two
parties (Agarwal, 2018). Such consideration is important because the value of payment payable
does not have to be in line with the standards set down in the market. To an outsider, the
consideration an individual paid might seem wrong or unfair.
Section 26 of the Contracts Act 1950
Consideration is a crucial pillar of any contract. Therefore, any agreement between two
people seeking to enter a contractual relationship must be concluded by an exchange of
considerations between the parties involved (Johnson, 2015). Generally, if one of the people
bound by contact is expected to pay some sort of consideration absconds their duty, then the
contractual relationship entered into holds no water. What this means is that failure to hand out
the consideration invalidates the previous agreement between the people wishing to be bound
by a contractual relationship (Johnson, 2015). Such a requirement is to be found in section
twenty-six of the Contracts Act 1950.
There are three forms of consideration a court will typically look at when it comes to
the determination of whether an agreement between the alleged parties to a contract exists. The
first is called executory consideration (Johnson, 2015). It happens when one person agrees by
way of a promise to do something for another person at a future date. The case of Murugesu v.
Nadarajah is best placed to illustrate this concept (1980). The case involved two people where
the respondent lived in an apartment owned by Murugesu. After a while, the respondent
decided to approach the owner to sell him the house. Initially, his offer was rejected, but after
a while, he accepted to sell the house to the respondent for RM 26,000 (Gu...

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University of Virginia

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