DBL5014 BUSINESS LAW 5 OCTOBER 2020

STUDENT ID NO
1 1 7 1 2 0 3 4 9 2

MULTIMEDIA UNIVERSITY

ASSIGNMENT 2

TRIMESTER 1, 2020 / 2021

DBL5014 – BUSINESS LAW

(For Diploma Students Only)

5TH OCTOBER 2020

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INSTRUCTIONS TO STUDENT

1. This question paper consists of 8 pages with 4 questions.

2. Answer all questions.

3. You are required to cite relevant provisions and case laws.

4. Write all your answers in the Answer Booklet provided.

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QUESTION 1

a) Ali, Ah Hock and Gopal are best friends. One day, Ah Hock made a promise to
pay Gopal RM 500.00 if Ali repairs his house. Ali repairs Ah Hock’s house.
Unfortunately, Ah Hock fails to pay Gopal RM 500.00

Discuss whether Gopal can sue Ah Hock for the amount RM 500.00? (10 marks)

Write your answer below:

ISSUE: Whether Gopal can sue Ah Hock for the amount RM500.00 ?

Law : Section 26 of Contracts Act, an agreement without considerations is void

and An exchange of promises by which each party makes a gain and suffers a
detriment.

Applications : Gopal cannot sue Ah Hock for the amount RM500.00 . According
the section 26 of Contracts Act, Ah Hock and Gopal does not made any agreement
with each other. In this case, Ah Hock made a promise to pay Gopal RM500.00 if
Ali repairs his house. Ali repairs Ah Hock’s house. After that, Ah Hock don’t pay
Gopal RM 500.00

Conclusion : Gopal cannot sue Ah Hock for the amount RM 500.00 . This is
because they does not made any agreement . Ah Hock just made a promise say
that to pay Gopal if Ali repairs his house.

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b) Dinie received a scholarship from Government of Malaysia to further his study in

Manchester, United Kingdom. According to the scholarship contract, it stated
that he has to serve the government for a period of 5 years upon completion of
his study.

However, after he graduated, he refused to serve the government. He then

claimed that the contract between him and Government of Malaysia is void
because he was only 17 years old when the contract is made. Hence, Government
of Malaysia wants to sue Dinie for breach of contract.

Discuss whether the scholarship contract entered by Dinie is valid or not?

(15 marks)

ISSUE: Whether the scholarship contract entered by Dinie is valid or not ?

LAW 1 : Contract for scholarship (Contracts [Amendment] Act 1976). A

"scholarship agreement" is defined as a contract or agreement between an appropriate
authority and any person.
LAW 2 : Age of Majority Act 1971. Contract entered by minor is void.

Applications : Based on the situation, the scholarship contract entered by Dinie is not
valid. This is because under the Age of Majority Act 1971 mention that female and
male in the Malaysia above eighteen years old as a majority, and below than 18 years
old considered as minor. In the case, Dinie was received a scholarship to further his
study in Manchester, United Kingdom. In the contract stated that he has to serve the
government for a period of 5 years upon completion of his study. When Dinie sign
contract with government, he was only 17 years old . According the Age of Majority
Act 1971 , Contract entered by minor is void. So government cannot sue Dinie for
breach of contracts.

Conclusion : The scholarship contract entered by Dinie is not valid. This is because
Dinie was only 17 years old ,considered as minor. So the government cannot sue
Dinie.

[Total : 25 Marks]

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QUESTION 2

a) Yin went to Family Store to purchase a cordless vacuum for his house. He went to
the electrical appliances department, the salesman showed to him a few samples
from varieties of brand of the cordless vacuum that had been displayed there. He
interested of one of the samples showed there from the brand DIMEA and told the
salesman. The salesman later gave a box that contain the new cordless vacuum.

Yin keep requested the salesman to open the box and check over the goods but the
salesman keep insisted that the cordless vacuum in the box was exactly and
similar like the one of the samples displayed. When Yin reached home and opened
the box, he realised that the cordless vacuum is different from the sample shown
in the store.

By referring to Sale of Goods Act 1957. advise whether Yin can take legal action
towards the salesman in Family Store? (15 marks)

ISSUE : Whether Yin can take legal action towards the salesman in Family Store ?

LAW : Sale of Goods Act 1957 section 17. In the section 17 of Sale of Goods
Act 1957, when dealing with goods by sample, it is required by the seller to
ensure that the bulk of the goods must correspond with the sample. If the seller
fails to comply, the buyer is entitled to reject the contract since the matter is being
constituted as an implied condition.

Applications : Yin can take legal action towards the salesman in Family store.
Under section 17 of Sales of Goods Act 1957 mentions that when buyer buying
goods by sample, seller must make sure that goods same with the sample perform
to the buyers . In this case, Yin buy a cordless vacuum with the salesman . Yin
keep requested the salesman to check the goods but salesman keep insisted that
the cordless vacuum in the box was exactly and similar like the one of the samples
displayed. But, Yin realised that the cordless vacuum is different from the sample
when Yin back to home.

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Conclusion : Yin can take legal action towards the salesman in Family store. This
is because the salesman sold the cordless vacuum is different from the sample
perform to Yin.

b) Bella loves to do online shopping. During the 9/9 Shopee Sale, she bought a
carpet for her living room. According to the description, the size of the carpet is
200cm x 200cm and the thickness is 3.5cm high. When she receives the goods, it
turns out that the size of the carpet she receives is 100cm x 200cm and the
thickness is 2.0cm high which doesn’t match with the description.

Discuss whether there is a breach of implied condition made by the seller?

(10 marks)

ISSUE : Whether there is a breach of implied condition made by the seller ?

LAW : Sale of Goods Act 1957 section 15. In the section 15 of Sale of Goods
Act 1957 is on the sale of goods by description, a default implied condition is that
these goods must correspond with this description. The buyer is not bound to accept
and pay for the goods which are not in accordance with the description of goods.

Applications : Yes, seller made a breach of implied condition. This is because in

the Sale of Goods Act 1957 section 15, goods sell by the seller must correspond with
the description. Instead, buyer can choose not to accept and pay for the goods which
are not correspond with the description. In this case, Bella bought a carpet during 9/9
Shopee Sale. Based on the description, the size is 200cm x 200cm and the thickness is
3.5cm high. When Bella receives the carpet, the size of carpet was doesn’t match with
the description.

Conclusion : The seller made a breach of implied condition. This is because Bella
received the carpet does not match with the description.

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[Total : 25 Marks]

QUESTION 3

a) Nana just moved into a new house in Kajang, Selangor. She wants to purchase a
few electrical appliances. She went to YES Electronics Sdn, Bhd. She was
interested in purchasing a set of television, an air conditioner and a washing
machine. However, she didn’t have enough money. YES Electronics Sdn. Bhd
suggested she enter the hire purchase agreement with Bantu Finance Berhad (BFB)
that provided financial assistance.

Nana agreed and was requested to sign the hire purchase agreement. The
agreement was separated according to the goods. In the agreement, it does not
state the monthly instalments, term of charge and the information was not
completed. When she enquired, she was told that the details will be filled in later
after she signed.

Discuss whether the hire purchase agreement is valid or not? (15 marks)

ISSUE : Whether the hire purchase agreement is valid or not ?

Law : Hire Purchase Act 1967 Section 4B(2), agreement can only be signed when
all the forms, documents or agreements have been fully completed. Owner or
dealer cannot insist on the hirer to sign an incomplete hire-purchase agreement.
Law 2 : Hire Purchase Act 1967 Section 4B(3), if agreement is not signed or is
signed without having being completed, the agreement shall be void.

Applications : The hire purchase agreement is void. According to the section

4B(2), agreement must been fully completed and dealer cannot insist on the hirer
to sign an incomplete agreement. In this case, Nana was requested to sign the hire
purchase agreement. In the agreement, it does not state the monthly installment,
term of charge and the information was not complete. Besides that, under section
4B(3) is mention that agreement without having being completed, the agreement
shall be void.

Conclusion : The hire purchase agreement is void. This is because the other party
does not prepare the complete hire purchase agreement.

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b) Nana also has entered the hire purchase agreement with MyBank Berhad (MBB)
to purchase a Perodua Myvi car, she just received a written 4th Schedule notice
from MBB for failing to pay 3 monthly instalments consecutively as stated in the
agreement. Within 14 days from the notice, Nana had paid all the arrears. One day,
MBB sent their agent to repossess the car from Nana. Nana is dissatisfied with
MBB's action.

Discuss whether MBB has the right to repossess the car? (10 marks)

ISSUE : Whether MBB has the right to repossess the car?

LAW : Hire Purchase Act 1967 Section 16A , If hirer pays the default within
21days of service of the 4th schedule notice, the repossession would not be carried
out.

Applications : MBB has no right to repossess the car. According the section 16A
in Hire Purchase Act 1967, if Nana pays the default within 21 days of service of
the 4th schedule notice, the repossession would not be carried out. In this case,
Nana has entered the hire purchase agreement with MyBank Berhad(MBB) to
purchase a car. Nana have received a schedule notice for failing to pay 3 monthly
installments. But within 14 days from the notice, Nana had paid all the arrears. So
MBB has no right to repossess the car from Nana.

Conclusion : MBB has no right to repossess the car. This is because Nana had
pays all the arrears within 21 days.

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[Total : 25 Marks]
QUESTION 4

a) Beta Sdn. Bhd was a progitable company in Johor Bharu. They supplied various
textiles for clothing production. However, early April 2020, the company started
to suffer major losses due to the Movement Control Order. CIBB Bank is one of
their major creditors. The company made a loan of up to RM 750,000.00 from
the bank in 2018. Starting from June 2020, the company failed to pay their
monthly payment to CIBB Bank until today. CIBB Bank has sent few demand
notices to the company but the company failed to do so. Therefore, CIBB
intends to wind up the company by applying a compulsory winding up in the
court.

By referring to Companies Act 2016, advise CIBB Bank whether they have the
right and ground to apply compulsory wind up in court for Beta Sdn. Bhd?
(15 marks)

ISSUE : Whether CIBB Bank have right and ground to apply compulsory wind
up in court for Beta Sdn. Bhd ?

LAW : Section 465(1)(e) of Companies Act , inability to pay debt.

Case : Teck Yow Brothers Hand-Bag Trading Co v Maharani Supermarket Sdn.
Bhd(1989).

Applications : CIBB Bank have the right and ground to apply compulsory wind
up in court for Beta Sdn.Bhd. According to the section
465(1)(e) , if the company is unable to pay its debt. In this case,
Beta Sdn.Bhd has made a loan of up to RM 750,000.00 from
CIBB Bank in year 2018. Starting from June 2020, the
company failed to pay their monthly payment to CIBB bank.
CIBB has sent out few demand notices but company failed to
do so.
Conclusion : CIBB bank have the right and ground to apply compulsory wind
up in court for Beta Sdn.Bhd. This is because Beta Sdn.Bhd is
inability to pay debt.

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b) Nita has been working in RH Sdn. Bhd for 10 years as Marketing Executive in the
company. Recently, her husband Aaron told her that RH Sdn. Bhd wanted to
appoint him as their company's auditor. Aaron informed her that her wife is the
officer in the company but the company is still insisting to appoint him as their
auditor.

Advise Aaron whether he is qualified to be appointed as an auditor in RH Sdn.

Bhd? (10 marks)

ISSUE : Whether Aaron is qualified to be appointed as an auditor in RH Sdn.Bhd ?

LAW : Section 264(1)(C) of Companies Act, He or His spouse is an officer of the

company, A partner or employee of an officer of the company and A Shareholders
of a corporation whose employee is an officer of the company.

Applications : Aaron is not qualified to be appointed as an auditor in RH Sdn Bhd.

Under section 264(1)(C) of Companies Act, Aaron wife cannot be an officer in the
RH Sdn.Bhd. In this case, Aaron wife Nita has been working in RH Sdn.Bhd for
10 years as Marketing Executive. Recently, RH Sdn.Bhd wanted to appoint him as
their company’s auditor. Aaron informed her that her wife Nita is the officer in the
company.

Conclusion : Aaron is not qualified to be appointed as an auditor in RH Sdn.Bhd .

This is because Aaron wife Nita is an officer in the company.

[Total : 25 Marks]

End of Paper

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