GROUP ASSIGNMENT (Q1 )

ISSUE 1.0: Whether Serupa Bikin has an authority to offer Setayuh? The law of agency As in Section 141(1), an agent having an authority to do an act has authority to do every lawful thing which is necessary in order to do he act. In general law, the principal may, by words or conduct and create an inference that an agent has an authority to act on behalf of the principal even though no actual authority exists in fact, and if a third party relies on it to his detriment, the principal will be estopped from denying the agents authority. In addition, agency by estoppel is also known as presumption of agency that is the existence of an agency may be presumed and the principal may be bound by the acts of the agent performed on the principals behalf even though there is no formal agreement. In the case of Soanes v London and South Western Railway Company(1919), a railway company supplied a porter with a uniform, thus holding him out as a agent. While off duty and therefore not at the time acting as the companys agent, the porter took charge of a passengers luggage at a railway station. The luggage was stolen and the passenger claimed for the loss against the railway company. The court held that the company was stopped from denying that the porter was its agent. Therefore, the company was liable for its agents action. In the case of Setayuh v Batu Api Club, Serupa Bikin who is the agent of Batu Api Club, offer a contract for the following season if Setayuh choose the second course and deferred surgery. In conclusion, Serupa Bikin has an authority to do offer Setayuh because Setayuh was induced to believe that Serupa Bikin was Batu Api Clubs agent and that he was acting within his scope of authority.

ISSUE 1.1: Whether there is a valid contract between Setayuh and Batu Api Club through the medium Serupa Bikin? Agreement (Comprising and Acceptance) According to Section 2(a) in Contracts Act 1950, a proposal is made when a person is signifies to another his willingness to do or abstain from doing anything, with a view to obtaining the assent of that other to the act or abstinence. A proposal is accepted when the person to whom the proposal is made signifies his assent thereto due to Section 2(b). As in Section 2(c), when the proposal is accepted, it becomes a promise and the person making the proposal is called promisor and the person who accept the proposal is called promisee. In the case of Carlill v Carbolic Smoke Ball Company (1893), the Carbolic Smoke Ball company manufactured a product called the smoke ball which the company could prevent the influenza and a number of other diseases. Advertisements were put up by the company claiming that it would pay $100 to anyone who got sick with influenza after using its product according to the instructions set out in the advertisement. Mrs Carlill saw advertisement, purchased the smoke balls and used it as directed for nearly two months until she contracted the flu. She tried to claim $100 from the company but failed. Finally, she brought a claim to court. Her lawyer claimed that the advertisement and her reliance on it was a contract between her and the company, and so the company ought to pay the reward. In the case of Setayuh v Batu Api Club, Setayuh was approached by his coach, Serupa Bikin who is the agent for Batu Api Club and told that Batu Api club will give him a contract for the following season if he choose the second course and deferred his surgery. Setayuh decide to continue with his playing because he did not have many years left in his career. In conclusion, it is an offer as well as a promise is made between Setayuh and Batu Api Club. This is because the agent told Setayuh that the Batu Api club would give him a contract for the following season if he deferred his surgery. As the promisee accept the offer, he deferred his surgery and continue to play through the end of the season.

ISSUE 1.2: Whether there is an acceptance between Batu Api Club and Setayuh? Agreement (Comprising and Acceptance)

According to Section 2(b) Contracts Act 1950, the proposal is accepted when the person to whom the proposal is made signifies his assent thereto. According to communication of acceptance, for there to be a valid contract, the offeree must convey his acceptance to the offeror. Acceptance is only effective when they are communicated. In the case of Felthouse v Bindley (1862), Mr Felthouse wrote to his nephew who wanted to sell a horse to him, stating that If I hear no more about him, I consider the horse mine ... Subsequently, there was no notice from his nephew and Felthouse considered the horse his own. The horse was not delivered to Mr Felthouse and later there was an auction at the nephews property for the other livestock. The nephew told the auctioneer, Mr Bindley , not to sell the horse at the auction but Bindley accidently sold it. Felthouse sued the auctioneer and his action could only succeed if it could be shown that Felthouse actually owned the horse. Mr Felthouse did not have ownership of the horse as there was no acceptance of the contract. Acceptance must be communicated clearly and cannot be imposed due to silence of one of the parties. Although the nephew had expressed interest in completing the sale, there was no communication of that intention. As such, there was no valid contract. In the case of Setayuh v Batu Api Club, as Serupa Bikin the agent of Batu Api Club offers Setayuh that the Batu Api club would give him a contract for the following season if he choose the second course and deferred surgery, Setayuh immediately accept the offer to continue the season with the benefits of painkilling injections and other therapy. In conclusion, there is an acceptance between Setayuh and Batu Api Club when the offeror made the proposal. As the acceptance is made orally between the two parties, then the contract is considered valid.

ISSUE 1.3: Whether there is necessary intention to create legal relations between parties? Intention to create legal relation In social and domestic agreements, there is a presumption that these agreements are not to be legally binding unless the contrary can be proven. Such a presumption can be rebutted if it appears from the circumstances that the parties intended to be legally bound. In the case of Rose and Frank Company v Crompton Bros (1925), the plaintiffs entered into a contract with the defendant to act as sole agents for the sale of the defendants paper. The written agreement contained a clause that it was not entered into as a formal or legal agreement and would not be subject to legal jurisdiction in the courts but was a record of the purpose and intention of the parties to which they honourably pledged themselves that it would be carried through with mutual loyalty and friendly co-operation. The plaintiffs placed orders for paper which were accepted by the defendants. Before the orders were sent, the defendants terminated the agency agreement and refused to sent the paper. The court held that the sole agency agreement was not binding owing to the inclusion of the honourable pledge clause. Regarding the orders which had been placed and accepted, however, contracts had been created and the defendants, in failing to execute them, were in breach of contract. In business and commercial agreements which are more formal in future, there is presumption that there is an intention to create legal relations. As such, any agreement would be regarded as legally binding unless the contrary is proven. In conclusion, there is no intention to create legal relations between parties because Setayuh did not make any formal contract with Batu Api club that he will play for next season if he continue playing for this season without any making any surgery in his knee.

ISSUE 1.4: Did Setayuh provide consideration for the promise or has he merely done no more than his existing duty? Consideration According to Section 26 Contracts Act 1950, an agreement made without consideration is void. Section 26(b) provides that an agreement to compensate the promise for an act that the promisor was legally compellable to do. In the case of Phang Swee Kim v Beh I Hock (1964), the court held that mere inadequacy of the consideration was not a ground to set aside the agreement, as long as the consideration is sufficient. Therefore, consideration need only have some value in the eyes of the law but need not be adequate. In the case of Setayuh v Batu Api Club, after Setayuh get injured in his knee, he did not have immediate surgery because if he did the surgery he could not be able to resume playing for nearly the whole of the remainder of the season. So he continues to play the current season with the benefit of painkilling injections and other therapy. In conclusion, Setayuh considerate the promise made by Batu Api club and finished playing the current season without doing any surgery. Setayuh had done his existing duty that are given by his coach Serupa Bikin.

ISSUE 1.5: Did the Batu Api club revoke the offer before acceptance? Revocation of an acceptance According to Section 5(2) Contracts Act 1950, an acceptance may be revoked at any time before the communication of the acceptance is complete as against the acceptor, but not afterwards. For the termination of a proposal, the communication of notice of revocation by proposer to the other party must be done before acceptance according to Section 6(a). According to Section 6(b), lapse of time if there is a time prescribed for acceptance, if no time is stipulated, then it must be within a reasonable time. In the case of Routledge v Grant (1828), the defendant offered to purchase a house from the plaintiff. He gave the plaintiff six weeks to decide whether to accept or refuse the offer. Before the end of six weeks, the defendant withdrew his offer. The court held that the defendant was entitled to do so because there was no valid acceptance yet. In addition, since no valuable consideration had been given to keep the offer open for six weeks, the offeror had only a moral obligation and not a legal obligation to keep the offer open for that full period. In the case of Setayuh v Batu Api Club, as a week before the conclusion of the season, Setayuh was informed that the Batu Api club did not wish to retain him for the following season because there was insufficient time available for him to recover from the operation on his knee. In conclusion, Batu Api Club does not revoke the offer before the acceptance because as Setayuh the promisee had agreed to play for the season are known as a consideration to make an agreement that are unavoidable and the communication is consider completed as Setayuh continues to play for the season after he accept the proposal from the promisor.

CONCLUSION As a conclusion, Serupa Bikin the club coach should offer him an agreement for the upcoming season. As Setayuh continued playing for Batu Api club by for the remaining current season without doing any surgery and by only taking painkillers and injections as a consideration.