to say that i'm honest is a hypocrisy

Guess some lawyers have to give up on honesty in order to earn the big bucks eh? Here is an article in the New York Times about a hotshot Indonesian lawyer who indirectly admits that he has not been all that honest in committing to his profession.


Click here to read more.

by hook or by crook, they ain't gonna get more outta me!

The words income, salary, pay, wage, fee, or any forms of remuneration are probably the sweetest words to hear besides the usual terms of endearments. Anything that involves money will bring a even a dead man to life, metaphorically. And whoever says money can't buy happiness must have been shopping at the wrong place. Back to income, the more the better, right? However, what we take we have to give back, partially. Hence the birth of income tax.

The Income Tax Act 1967 states that if you earn more than 32,000MYR per annum, you're required to pay tax. And as your income increases, so does the tax requirement. It is a real pain to see a scrap of your hard-earned cash leave, no? So some people find ways to avoid tax.

One way of doing it is by expensing the assets. For example, if you purchased a car this year, you can state that it is a company car and not for private usage. That shaves off a huge part of the yearly income already. Another way is to defer income. Some payments are usually due the year after for services performed in the current year. Since you have not received the payment, defer it! With the creation of personal relief, you can expense off a number of things, namely
a) Medical expenses for parents
b) Medical expenses for severe disease such as AIDS, cancer and so on.
c) Medical examination but limited to RM500.
d) Disabled individual, wife/husband, children
e) Wife
f) Purchase of equipment for disabled people
g) Education fees in the field of industrial, scientific, technology, technical, accounting, law and Islamic finance.
h) Purchase of books, journals, magazines and publications
i) Purchase of personal computer
j) EPF and life insurance premium
k) Education and medical insurance
l) EPF annuity insurance

So there you have it. A few ways of avoiding tax legally. Evading tax however, is illegal. Al Capone, the crime king of Chicago in the 1930s got away with murder but was chucked in prison for not paying his taxes. Guess you can escape the hands of death but not the hands of the IRB.

inland revenue board

The Inland Revenue Board of Malaysia or Lembaga Hasil Dalam Negeri is one of the main
revenue collecting agencies of the Ministry of Finance. It was converted into a Board on March 1, 1996, and is now formally known as the Inland Revenue Board of Malaysia (IRB).
IRB was established in accordance with the Inland Revenue Board of Malaysia Act
1995 to give it more autonomy especially in financial and personnel management;
to improve the quality and effectiveness of tax administration.

Key functions of IRB are as follows:
• To act as an agent of the Government and provider of services in administering,
assessing, collecting and enforcing payment of income tax, petroleum income
tax, real property gains tax, estate duty, stamp duties and such other taxes as
may be agreed between the Government and the Board
• To advise the Government on matters relating to taxation and to liaise with the
appropriate Ministries and statutory bodies on such matters
• To act as a collection agent for and on behalf of any body for the recovery of
loans due for repayment to that body under any written law

honesty is the best policy

Growing up, I've always been taught that honesty pays and lying is a sin. Once in a while telling a white lie has always paid off than being honest, for example telling my mom that I did not steal the cookie from cookie jar when I indeed took more than 3 on one occasion to spare myself from the rod. While minuscule lies like these are acceptable and does not do anyone harm along the way, lying on a big scale is sure to jeopardise or hurt someone. Hence the birth of 'doctrine of utmost good faith'. This doctrine is important in insurance contracts, in fact it is important and should be applicable to all contracts. As for insurance, it is governed that all parties to an insurance contract must deal in good faith, making a full declaration of all material facts in the insurance proposal.

The insured is compelled to reveal the exact nature and potential of the risks that he transfers to the insurer, which in my opinion, is fair in return for the compensation that he would receive in the event of something undesirable. The insurer also has to make sure that the potential contract fits the needs of, and benefits the assured. In the case of Carter v Boehm (1766), Lord Mandfield stated this

Insurance is a contract of speculation... The special facts, upon which the contingent chance is to be computed, lie most commonly in the knowledge of the insured only: the under-writer trusts to his representation, and proceeds upon confidence that he does not keep back any circumstances in his knowledge, to mislead the under-writer into a belief that the circumstance does not exist... Good faith forbids either party by concealing what he privately knows, to draw the other into a bargain from his ignorance of that fact, and his believing the contrary.

nemo dat quod non habet

Nemo dat quod non habet is a latin phrase for 'no one can give what he does not have'. Legally speaking, this term means that the purchase of a possession from someone who has no ownership right to it also denies the purchaser any ownership title. This rule is deemed to protect the rights of ownership. If no rule was to be created, the interest of the true owner of the stolen goods would be jeopardized.

There are however, a few exceptions to these rule:
1. The operation of estoppel (s. 27)
Subject to this Act and of any other law for the time being in force, where goods are sold by a person who is not the owner thereof, and who does not sell them under the authority or with the consent of the owner, the buyer acquires no better title to the goods than the seller had, unless the owner of the goods is by his conduct precluded from denying the seller’s authority to sell.

2. Sale by mercantile agent (s.27)
Provided that where a mercantile agent is, with the consent of the owner, in possession of the goods or of a document of title to the goods, any sale made by him when acting in the ordinary course of business of a mercantile agent shall be as valid as if he were expressly authorized by the owner of the goods to make the same; provided that the buyer acts in good faith and has not at the time of the contract of sale notice that the seller has no authority to sell.

3. Sale by one of joint owners (s.28)
If one of several joint owners of goods has the sole possession of them by permission of the co-owners, the property in the goods is transferred to any person who buys them of such joint owner in good faith and has not at the time of the contract of sale notice that the seller has no authority to sell.

4. Sale under a voidable title (s. 29)
Where the seller of goods has obtained possession thereof under a contract voidable under section 19 or 20 of the Contracts Act 1950, but the contract has not been rescinded at the time of the sale, the buyer acquires a good title to the goods provided he buys them in good faith and without notice of the seller’s defect
of title.

5. Sale by a seller in possession after sale (s. 30(1))
Where a person, having sold goods, continues or is in possession of the goods or of the documents of title to the goods, the delivery or transfer by that person or by a mercantile agent acting for him, of the goods or documents of title under any sale,pledge or other disposition thereof to any person receiving the same in good faith and without notice of the previous sale shall have the same effect as if the person making the delivery or transfer were expressly authorized by the owner of the goods to make the same.

6. Sale by a buyer in possession (s. 30(2))
Where a person, having bought or agreed to buy goods, obtains, with the consent of the seller, possession of the goods or the documents of title to the goods, the delivery or transfer by that person or by a mercantile agent acting for him of the goods or documents of title under any sale, pledge, or other disposition thereof to any person receiving the same in good faith and without notice of any lien or other right of the original seller in respect of the goods shall have effect as if such lien or right did not exist.

source: Sales of Goods Act 1957

caveat venditor - why a retailer sells goods at his own peril

Many small business owners that I've encountered are surprised to learn that under New York law, anyone in a product's chain of distribution can be held liable for injury that results from the foreseeable use of the product. This law includes a retailer, who may have just put that product on his shelf without ever opening the box, and a distributor, who merely transported the product from one destination to the other. Under this scenario, neither the retailer nor the distributor was actively at fault for the product's defect or the plaintiff's accident - and they can still be held liable. Does that sound scary from the retailer or distributor's perspective? It sure is.

The Plaintiff's Burden of Proof in a Products Liability Action

In very basic terms, in order to prevail in a products liability action, a plaintiff needs to prove two things: first, that the product is defective, i.e., the product is so likely to be harmful to persons or property that a reasonable person who had actual knowledge of its potential for producing injury would conclude that it should not have been marketed in that condition, and, second, that the defect was a substantial factor in causing plaintiff's injuries.

The plaintiff can meet this burden of proof by demonstrating one of the following: (1) this specific product was defectively manufactured; (2) the product was defectively designed; or, (3) the safety warnings accompanying the product were inadequate.
At first blush, this law seems particularly tough on middlemen like the retailer and distributor, which presumably have little to no input in either the manufacture or design of the product, or the warnings that are placed on the product. However, it bears mention that these entities reap the financial rewards from selling the product. Consequently, the courts have opined that in the interests of assuring that a plaintiff with a legitimate defective products claim has a viable and readily available party from whom he or she can be compensated (as opposed to a foreign manufacturer with no connection to the plaintiff or place of occurrence), it is fair to hold the middlemen liable for the product's failures.

This law does not leave retailers or distributors without recourse; to the contrary, they are still entitled to seek indemnity and/or contribution from the responsible party (generally, the manufacturer). On the other hand, clearing the technical and procedural hurdles necessary to get indemnity from the manufacturer is often far from simple, particularly where the manufacturer is foreign.
Assumption #1: The manufacturer has the requisite minimum contacts with the forum of the claim. In order to obtain personal jurisdiction over the foreign manufacturer, you must demonstrate that the manufacturer either transacts business or has some other tangible nexus with the forum state (see, e.g., New York Civil Practice Law and Rules 302).
Assumption #2: The manufacturer's host country is a signatory to the Hague Convention's Service of Process Rules. If Assumption #1 can be satisfied (which is uncertain at best), you will still need to assure that your legal papers are personally served on the manufacturer. This in turn requires that the manufacturer is not only readily located, but can be served under the Hague Convention's rules.
Assumption #3: The manufacturer is a viable entity with collectible assets. It goes without saying that a paper judgment against a defunct corporation is utterly worthless.

So how can a domestic retailer or distributor protect itself against products liability claims? Here are a few suggestions:

3 Easy Steps to Protect Your Retail Business Against Defective Products Claims

Step #1: Make sure that those entities above you in the chain of distribution carry adequate products liability insurance from a domestic, well-reputed and established insurer that specifically names your company as an additional insured on the policy. Do not rely on the manufacturer's claim that you are named on the policy; get confirmation directly from the insurer (I have seen instances where the declaration sheet provided by the other party to the agreement was a complete fabrication).

Step #2: Make sure that you have an agreement that indemnifies you against any claim of a product defect that is not of your own doing. Stated otherwise, if you are a retailer or distributor, you should be indemnified against any claims of manufacturing or design defect and/or inadequate warnings.

Step #3: Try to assure that those companies directly above you in the chain of distribution have a domestic presence, such as an office or agent for service of process.

While following these rules may cost some time and money in the short run, these safeguards are indispensable, for they may ultimately save your company from needless exposure to financial ruin.


Copyright (c) 2008 Law Offices of Jonathan Cooper
By:
Jonathan Cooper

of tattoos and caveat emptor

'Caveat emptor' is a Latin phrase which simply translates to 'let the buyer beware'. It is a precaution that the buyers should know the condition and quality of the purchase before buying. The seller is not responsible for informing the defects or imperfections of the item or service to be sold. Honesty and frankness are usually non-existent in sellers, unless he's a man who does not prioritise profits as his ultimatum in opening a business. I recently came across an article about a girl who got a tattoo which was mispelt. She saw the preview of the word and the stencil on her arm which was the word 'beatiful'. It was spelled incorrectly but she was not aware of it until someone pointed it out. Guess this is what happens when the literary rate in the U.S. is low. Back to the story. She then wanted to sue the artist for tattooing the mispelt word on her arm. The adjudicator ruled that "...the Claimant is the author of her own misfortune. The Claimant saw the phrase on the computer, on the stencil and then on her arm before being tattooed and she approved of the tattoo”. Hence, caveat emptor applies even when getting a tattoo. If you are illiterate, get a picture instead.

lee v lee air farming ltd.

Mr Lee was a pilot who operated a crop dusting business. Mr Lee formed the corporation, Lee's Air Farming Ltd. Its main business was aerial spraying. He was the director and owned most of the shares(he held 2999 of the company's 3000 shares). As director of the corporation, he hired himself as an employee of the corporation. As one of the administrative tasks in setting up the company, he acted as its agent in setting up insurance, including workers' compensation insurance. The corporation's plane crashed while Mr Lee was flying it as part of his work, and he was killed on the job.

His widow, the plaintiff, attempted to collect what was rightfully due to a widow of a man killed on the job. The actual defendant was the insurance company.
The main question in the case was whether a person could be both a director and major shareholder of a corporation, on the one hand, and also an employee of the corporation, on the other.

Previous cases, beginning with the Salomon case, had confirmed that a corporation has an existence separate and apart from its shareholders and directors. The exceptions to that principle are gathered under the rubric, 'Piercing the Corporate Veil.' Where a corporation is a mere sham, the law can cut through the veil of corporate legitimacy, and reach into it for the shareholders and directors.
The Lee's Air Farming case confirmed the Salomon principle. Lee's Air Farming Ltd. was not a mere sham. It was a legitimate corporation, established for legitimate purposes, and had carried on a legitimate business. His employment by the corporation was well-documented, through government records of tax deductions, workmens' compensation contributions, etc., and was not something his widow had attempted to piece together after the fact of his death. There was no reason in law why a person could not perform corporate functions and employee functions within the same corporation. it was held that Lee was a separate person distinct from that company hence compensation was due to the widow.

fun with dick and jane

"Fun With Dick and Jane" is a remake of the 1977 comedy starring Jane Fonda and George Segal, true to its storyline. Those who do not learn from history are doomed to remake it. This proves true in this comedy starring Jim Carrey as Dick and Tea Leoni as Jane. Dick is an executive of a mega corporation (think Enron), who is promoted to vice president in charge of communications, just in time to be its spokesman on live cable news as the corporation's stocks melts down to pennies a share. Jane, on the morning of his promotion quit her job. After the embarrassing meltdown on national TV, Dick is left jobless, and so is his wife.

What turned out to be a glorious affluence turned sour. They have to sell their possessions to get by. After running out of possessions, they then turn to robbery - first convenience stores and head shops, later private homes and banks - and while that pays the bills and their kid's birthday party, Dick is brewing a brilliant scheme. Namely, revenge on his old boss Jack McAllister (Alec Baldwin), the corporate shark who tanked the company, Globodyne.

McAllister has already looted whatever assets ever existed in the company, leaving with hundreds of millions while his employees face a financial meltdown. This is a typical turnout of the corporation being a separate legal entity. The fact that the company is an entirely separate entity, the directors do not have legal obligations to bail out the company or reduce their pay to help the company survive. While the helpless ex-employees are out there slaving their way through daily survival, McAllister enjoys his looted luxuries with no remorse. Come to think of it, there's the Salomon principle to be blamed for the frauds and criminal activities. Without it, none of this fiasco would have ever happened. The fallouts of Enron and WorldCom would not have taken place. Perhaps this is a time to start re-evaluating the principle so that directors would not be exempted from the meltdown of their corporations.

salomon principle - a blessing or otherwise?

The case of Salomon v Salomon & Co. Ltd has become a landmark law in setting the principle that a corporation is a separate legal entity. The unanimous ruling of the house of the Lords firmly upholds the doctrine of corporate personality. From then onwards, corporations are being treated as a distinct 'person', separated from and independent of the persons who formed it, who invest money in it, and who direct and manage its operations. It follows that the rights and duties of a corporation are not the rights and duties of its directors or members who are, most of the time, obscured by a corporate veil surrounding the company.

The fact that the corporation is a separate legal entity in its own right has birthed many criticisms. What was supposed to be granted as a privilege for legal and business convenience, has turned into a way to commit fraudulent activities and get away with it. The increase of companies going into a state of bankruptcy, workers getting laid off and the poor keep getting poorer are somehow a produce of directors and owners exploiting the Salomon principle. They have billions of dollars stacked away in bank accounts, enough to sustain their succeeding generations of heirs, while the companies are left for doom. This is due to the fact that corporations may have incurred huge losses, but the assets of the directors are to be left untouched as they do not represent the corporation.

Professor Kahn-Freund described the decision of the House of Lords in the case as "calamitious" and called for the abolition of private companies. In his article in the Modern Law Review, he mentioned that the impact on the society by a failing economy and corporations and uses two main approaches whilst at this; first that the interests of the community itself in the distribution, investment of profits of the concern, the prevention of fraudulent transactions affecting the community at large and the measure of publicity should be taken into consideration. The second by the abuse of the principle of a corporate entity and undermining of the company’s capital as a ‘guarantee fund’ by the issue of shares and buy outs in exchange for over valued assets.

The conniving minds of the directors caused the downfall of Fannie and Freddie Mac in the U.S, and now the whole world economy. Such a problem does not call for a legal remedy, but an economic one. Any slight possibility of looking at a legal solution, will be countered by the decision in Salomon.

There is therefore still a debate as to whether the Salomon principle should be applied in a modern legal environment, with directors manipulating the principle for their own good use. Many have referred to this principle as a 'double edged sword', endowing companies with the attributes to be a powerhouse of capitalism yet promoting fraud and the evasion of legal obligations. So what is the final verdict? Yay or nay to the Salomon principle?

Reference:
A Two-Edged Sword: Salomon and the Separate Legal Entity Doctrine
Wikipedia
The Social Blog

holdings and subsidiary

A subsidiary, in business matters, is an entity that is controlled by a separate higher entity[citation needed]. The controlled entity is called a company, corporation, or limited liability company; and in some cases can be a government or state-owned enterprise, and the controlling entity is called its parent (or the parent company). The reason for this distinction is that a lone company cannot be a subsidiary of any organization; only an entity representing a legal fiction as a separate entity can be a subsidiary. Contrary to popular belief,[by whom?] a parent company does not have to be the larger or "more powerful" entity;[citation needed] it is possible for the parent company to be smaller than a subsidiary,[citation needed] or the parent may be larger than some or all of its subsidiaries (if it has more than one).[citation needed] The parent and the subsidiary do not necessarily have to operate in the same locations, or operate the same businesses, but it is also possible that they could conceivably be competitors in the marketplace. (Hewlett Packard is the parent company of Compaq, but both compete against each other in the sale of desktop computers.) Also, because a parent company and a subsidiary are separate entities, it is entirely possible for one of them to be involved in legal proceedings, bankruptcy, tax delinquency, indictment and/or under investigation, while the other is not.

The most common way that control of a subsidiary, is achieved is through the ownership of shares in the subsidiary by the parent. These shares give the parent the necessary votes to determine the composition of the board of the subsidiary, and so exercise control. This gives rise to the common presumption that 50% plus one share is enough to create a subsidiary. There are, however, other ways that control can come about, and the exact rules both as to what control is needed, and how it is achieved, can be complex (see below). A subsidiary may itself have subsidiaries, and these, in turn, may have subsidiaries of their own. A parent and all its subsidiaries together are called a "group", although this term can also apply to cooperating companies and their subsidiaries with varying degrees of shared ownership.

Subsidiaries are separate, distinct legal entities for the purposes of taxation and regulation. For this reason, they differ from divisions, which are businesses fully integrated within the main company, and not legally or otherwise distinct from it.

excerpt from wikipedia

There are many companies which decide to have subsidiary companies. For example,

i) KFC Holdings (Malaysia) Berhad

ii) Telekom Malaysia Berhad

iii)Berjaya Corporation Berhad

iv) Unilever

v) Fraser & Neave Holdings Berhad

shortcut to happiness

'Shortcut To Happiness' is an adaptation of the 1941 classic 'The Devil and Daniel Webster. Starred by the gifted and impeccably good looking for a 50 year old, Alec Baldwin, Anthony Hopkins, who by the way still give me the creeps after watching Hannibal, and the beautiful, sultry Jennifer Love Hewitt. This movie tells a tale about the hapless, luckless writer, played by Baldwin, who tries hard to make a breakthrough in the literary world. A failure who only has a dollar fifty in his checking account and whose manuscripts got stolen, hurls a typewriter out the window in a fit of frustration. Baldwin,as desperate as a clingy girlfriend is, reluctantly offers to sell his soul to trade places with his friend who is just about to launch his career. The Beezlebub in this movie is played none other than the bewitching Jennifer Love Hewitt, agrees to make Baldwin a literary success in exchange for a 10-year-lease on his soul.

Baldwin finally gets to be the bestselling author as he has always dreamed of, but is deprived of friends and joy and contentment. After realising that he has made a huge mistake shaking hands with the Devil, he turns to regal publishing magnate Anthony Hopkins, a masterful orator who has battled the Devil and emerged victorious on multiple occasions. As it is clear that Baldwin has breached the contract, a trial is held so that Hewitt still gets her fair share of the bargain. The contract is written in a way that there are no loopholes and Baldwin's signature is clearly forged at the end of the agreement, so it is obvious that Hopkins is going to have to think out of the box to save Baldwin from the evil grasp of Hewitt.

In desperation and out of patriotism, Hopkins states that Baldwin is an American citizen and no American citizen will be forced into the service of a foreign prince. He bellows of freedom and independence and even calls upon an American jury and an American judge. Hopkins persuades by orating on all of the simple and good things of the American life, and how mankind has done wrong, but argues that something new and good had grown from it. He then goes on to saying that 'mankind got tricked and trapped and bamboozled, but it was a great journey, something no demon that was ever foaled could ever understand.'

The jury, in awe of Hopkin's eloquence of speech, finds that Baldwin is not binded to the contract and is a free man. This movie has gotten plenty of bad reviews due to the bad production, but it still provides a good lesson somehow, that there is never a shortcut to pleasantry, and even if you're bound to the Devil, there's always a way out. Eloquence and persuasion will do it.

How Many Lawyers Does It Take to Change a Light Bulb?

* Such number as may be deemed to perform the stated task in a timely and efficient manner within the strictures of the following agreement: Whereas the party of the first part, also known as 'The Lawyer', and the party of the second part, also known as 'The Light Bulb', do hereby and forthwith agree to a transaction wherein the party of the second part (Light Bulb) shall be removed from the current position as a result of failure to perform previously agreed upon duties, i.e., the lighting, elucidation, and otherwise illumination of the area ranging from the front (north) door, through the entry way, terminating at an area just inside the primary living area, demarcated by the beginning of the carpet, any spillover illumination being at the option of the party of the second part (Light Bulb) and not required by the aforementioned agreement between the parties.
* The aforementioned removal transaction shall include, but not be limited to, the following steps:
1. The party of the first part (Lawyer) shall, with or without elevation at his option, by means of a chair, stepstool, ladder or any other means of elevation, grasp the party of the second part (Light Bulb) and rotate the party of the second part (Light Bulb) in a counter-clockwise direction, said direction being non-negotiable. Said grasping and rotation of the party of the second part (Light Bulb) shall be undertaken by the party of the first part (Lawyer) with every possible caution by the party of the first part (Lawyer) to maintain the structural integrity of the party of the second part (Light Bulb), notwithstanding the aforementioned failure of the party of the second part (Light Bulb) to perform the aforementioned customary and agreed upon duties. The foregoing notwithstanding, however, both parties stipulate that structural failure of the party of the second part (Light Bulb) may be incidental to the aforementioned failure to perform and in such case the party of the first part (Lawyer) shall be held blameless for such structural failure insofar as this agreement is concerned so long as the non-negotiable directional codicil (counter-clockwise) is observed by the party of the first part (Lawyer) throughout.
2. Upon reaching a point where the party of the second part (Light Bulb) becomes separated from the party of the third part ('Receptacle'), the party of the first part (Lawyer) shall have the option of disposing of the party of the second part (Light Bulb) in a manner consistent with all applicable state, local and federal statutes.
3. Once separation and disposal have been achieved, the party of the first part (Lawyer) shall have the option of beginning installation of the party of the fourth part("New Light Bulb"). This installation shall occur in a manner consistent with the reverse of the procedures described in step one of this selfsame document, being careful to note that the rotation should occur in a clockwise direction, said direction also being non-negotiable.
* NOTE: The above described steps may be performed, at the option of the party of the first part (Lawyer), by said party of the first part (Lawyer), by his heirs and assigns, or by any and all persons authorized by him to do so, the objective being to produce a level of illumination in the immediate vicinity of the aforementioned front (north) door consistent with maximization of ingress and revenue for the party of the fifth part, also known as 'The Firm'.

A long and dreary contract summed up by lawyers just to fix a broken light bulb. Makes you feel like thanking your electrician for his speedy work and no-nonsense attitude, yes? I know I do. Contract laws, however lengthy and a nuisance it can be, does serve a useful purpose, in appropriate situations that calls for a formal agreement. For example, an agreement to change ownership of a piece of land, or to buy an agreed amount of items for an agreed price. You know, the usual ho-hum. It does scare me though, the thought of lawyers on the rise, the over saturation of lawyers. There can only be a limited amount of cases to handle, and only a handful of good ones. Also a raise of hands of those who want to go pro bono. Alright i see none. So what happens to the rest of the unemployed, uncreamed of the crop lawyers? They become your handyman. And once they do be prepared to be slammed with a contract as the above. Lesson learnt? Go create a fiasco and hire a lawyer. Give them an itch to scratch so that your other itch, eg. broken lightbulb, could be scratched by the necessary people at no hassle.

to sue or not to sue?

One day, Jay saw a banner hanging in front of her favorite cassette store outlet in Alamanda which reads: " BIG SALES! LATEST TOO PHAT'S ALBUM IS UP FOR GRABS WITH 50% DISCOUNT! LIMITED STOCK! HURRY, HURRY, HURRY!". After reading it, Jay immediately jumped in the outlet and said she wanted that album at the said discounted price. But to her disappointment, the shop owner said that the cassette is now sold at normal price. Can Jay sue the shop owner for breach of contract? Discuss according to Contracts Act 1950 and relevant decided cases(s).

The issue at stake here is whether an offer existed between Jay and the store owner. At a glance, it may have seemed like the owner had offered to sell the album at half the retail price, and Jay accepted the offer. However, the banner displayed was just an invitation to treat, or invitatio ad offerendum in Latin. It simply means that the owner who was making an invitation to treat does not intend to be bound as soon as it is accepted by the person to whom the statement is addressed. Invitation to treat includes the display of goods; the advertisement of a price or an auction; and an invitation for tenders (or competitive bids. Therefore, Jay is not in a position to sue as there was no legally binding agreement between her and the owner. Although she did offer to purchase the album, the owner did not accept. In order for a contract to be legal and valid, it must have offer [Section 2(a) of Contract Act] and acceptance [Section 2(b) of Contract Act] which the acceptance must be absolute and unqualified [Section 7(a) of Contract Act].

A similar case as the above would be Partidge v Crittenden (1968). It was held that where the appellant advertised to sell wild birds, was not offering to sell them. The judge commented that it did not make 'business sense' for advertisements to be offers, as the person making the advertisement may find himself in a situation where he would be contractually obliged to sell more goods than he actually owned.

think like a lawyer!

Miseducation of Lawyers
The professor of a contract law class asked one of his better students, "If you were to give someone an orange, how would you go about it?"
The student replied, "Here's an orange."
The professor was outraged. "No! No! Think like a lawyer!"
The student then replied, "Okay. I'd tell him `I hereby give and convey to you all and singular, my estate and interests, rights, claim, title, claim and advantages of and in, said orange, together with all its rind, juice, pulp, and seeds, and all rights and advantages with full power to bite, cut, freeze and otherwise eat, the same, or give the same away with and without the pulp, juice, rind and seeds, anything herein before or hereinafter or in any deed, or deeds, instruments of whatever nature or kind whatsoever to the contrary in anywise notwithstanding...'"

( Jamesfuqua.com )

This law satire didn't fail to crank me up, and it definitely made my morning. Here we see how the lecturer gets the student to think like a lawyer in a contracts class, verbally writing a contract for an orange. For last week's lecture we discussed that a contract needs to have certain elements for it to be deemed as a contract or else it would be void. We only managed to cover the first element which is offer. Here the student clearly offered the orange to the certain someone by hereby giving and conveying to the certain someone the particular orange. He signifies his willingness to offer the orange according to Section 2(a) of Contracts Act which states that 'when one person signifies to another his willingness to do or to abstain from doing anything, with a view of obtaining the assent of that other to the act of abstinence, he is said to make a proposal'. Besides that we can deduce that it is a bilateral offer as it is made to a specific someone. Seems like a perfectly spoken contract to me, although it only fulfills the first element. I just hope the world would not come to this state, imagine proposing a contract for everything we purchase or sell! I'd probably enter a famine state and never come out of it with my slow train of thought.

smoke ball: inhale or puff?

The 1892 case of Carlill and the Carbolic Smoke Ball Company literally set the ball rolling for consumer protection acts. What meant to be nothing more than a marketing means of convincing influenza-stricken people to purchase the smoke ball to cure the flu backfired when a consumer by the name of Louisa Elizabeth Carlill sued the company, when she contracted the flu after faithfully using the smoke ball for 2 months.

The carbolic smoke ball is a peculiar one - it consisted of a rubber ball filled with powdered carbolic acid. The ball is to be squeezed, sending a puff of carbolic acid smoke through a tube inserted through your nose. The idea was to make your nose run and sneeze the cold away.

The company manufacturing the ball advertised it in a few newspaper publications, offering a $100 reward for anyone who used the ball as per instructions but still contracted the flu. They deposited $1000 in the Alliance Bank to prove that the money was there.

A certain Mrs Carlill, purchased the smoke ball in hopes of preventing the last flu epidemic. A strict follower of the instructions, she still managed to catch the virus. Since it was clear cut that it was ineffective, she went to the company to claim the reward. The company refused to reimburse her, claiming that it was an empty boast and they had no obligation to fulfill it. Mrs Carlill, unhappy with the decision made, took the matter to court.

The defendant appealed, arguing that there was no contract binding them to fulfill the claim made in the advertisement. The words merely expressed an intention of rewarding, not a promise. It was also to vague to be the basis of a contract, as there was no time horizon and no means of checking the use of the ball. For example, how long does a person need to use the ball before he contracts the flu in order to claim the reward? What was the reasonable time span? The court however dismissed the fact that there was no way of checking whether Mrs Carlill had been faithfully using the ball as per instructions. It would have been a good argument had it not been dismissed.

Second, they said the advert was a 'mere puff', not meant to have any legal consequences are understood not to by the public. In my opinion, they should have just stopped at claiming it would cure influenza, and exclude the reward part to avoid legal mess. They dug an even deeper hole for themselves when they deposited $1000 in Alliance Bank to 'show their sincerity'. This argument was then refuted by the court because it was obvious that an offer had been made to the world and the company is liable to fulfill the promises made. A contract was birthed when the ball was purchased and used.

Thirdly, they argued that such an offer could not have possibly to be made to the entire world. The court once again refuted this argument by stating that if the offer was clear and to a group, anyone abiding the terms could be deemed to have accepted it. It applied to persons who have used the ball for fortnight prior and after the advertisement was posted in the newspaper. There was no need for those accepting to say who they were when accepting the offer. One of the judges, Lord Bowen, put it like this: "If I advertise to the world that my dog is lost, and that anybody who brings the dog to a particular place will be paid some money, are all the police or other persons whose business it is to find lost dogs to be expected to sit down and write me a note saying that they have accepted my proposal?"

The appeal was then dismissed with Mrs Carlill winning the appeal hands down. This case changed the face of law with the creation of unilateral agreement, and served as a constant reminder to companies to not be vague and deceitful.

Tutorial: Road Accident

When driving his car home in Georgetown, Ryan called and talked with his wife through his mobile phone without the use of hands-free device. While talking, he lost control over his car and eventually hit a walking pedestrian.

Ryan is liable under civil law as this is a dispute between two individuals and the accident could either be an accidental or a negligent one. He would however be liable under criminal law if the pedestrian dies in the accident. I was having a tete-a-tete with my friend who is studying law in the UK, and he was telling me that his class had a discussion about criminalizing driving while talking on the cellphone. Many were against the idea of categorizing it as a criminal offense, arguing that it is merely an act of distraction. Eating and drinking(sans alcohol) is an act of distraction, but it's illogical to hold the offender liable under criminal law for that, no? I was then reminded of an episode of Mr Bean where he had been late and had to get ready in his green Mini Minor. Imagine the number of offenses he would have committed if that law was passed.




The pedestrian could sue Ryan under tort of negligence. He should hire a lawyer to handle the legal negotiations and compensation amount for the injuries caused by Ryan. The pedestrian could settle it out of court if Ryan agrees to pay the desired compensation. If he does not then the pedestrian's lawyer will file for a civil suit. Ryan could be sued under Law of Malaysia Act - Road Transport Act 1987: Section 43 - Careless & Inconsiderate Driving. It is stated that

(1) A person who drives a motor vehicle on a road without due care and attention or without reasonable consideration for other persons using the road shall be guilty of an offence and shall on conviction be liable to a fine not exceeding two thousand ringgit or to imprisonment for a term not exceeding six months.

(2) The court shall, (unless for any special reason it thinks fit to order otherwise), order particulars of any conviction under this section to be endorsed on any driving licence held by the person convicted.

(3) On a second or subsequent conviction under this section, the court shall exercise the power conferred by this Part ordering that the offender shall be disqualified from holding or obtaining a driving licence unless the court having regard to the lapse of time since the date of the previous or last previous conviction or for any other reason (which reason shall be stated in the order), thinks fit to order otherwise, but this provision shall not be construed as affecting the right of the court to exercise the power aforesaid on a first conviction.

Ryan will have rights to legal presentation. He can hire a lawyer to defend him if the accident was purely accidental, whereby he did not mean to hit down the pedestrian. If the court rules it as an accidental case, Ryan would not be fully liable for the pedestrian's injuries. If he was found to be negligent, he would then be fully responsible for the accident and is 100% liable. However, the pedestrian could be contributorily negligent, ie. jaywalking, then the court will the degree of the pedestrian's responsibility in causing the accident and reduce the quantum accordingly.

happy people just don't shoot their husbands

Elle Woods, played by Reese Witherspoon is a sorority queen in Bel Air who has it all - bling, body and boyfriend. Well, the boyfriend part is later dismissed when he goes to Harvard to be a 'serious law student', and dating a blonde does not live up to the aforementioned quote. Determined to prove him wrong, Elle herself landed a place in Harvard and later on an internship position to help her professor with a law suit. In the video Elle has just gotten back from visiting the defendant, an exercise guru, Brooke Wyndham who supposedly shot her husband but swears she wouldn't do such a thing because he aced in bed. Elle manages to get the alibi from Brooke but is sworn to secrecy to not leak the alibi as it would ruin her reputation. Instead Elle explains as per the video, “I just don’t think that Brooke could’ve done this. Exercise gives you endorphins. Endorphins make you happy. Happy people just don’t shoot their husbands…they just don’t.” Everyone in the room goes berserk because she would not tell the alibi. And she didn't have to. In the end the case was solved when Elle put her blonde brains to good use. So who needs a good alibi when you have a great lawyer?