Business Law - Law of Contracts

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LAW OF CONTRACT: VOIDABLE CONTRACT

A formal agreement between two parties that may be rendered unenforceable for a number of legal reasons. Reasons that can make a contract voidable include failure by one or both parties to disclose a material fact. Circumstances or features that make a contract voidable include coercion, undue influence, fraud, misrepresentation and mistake.

Based on our case review, we more focus on voidable contract under undue influence. In section 16 has defined undue influence a contract is said to be induced by undue influence when the relationship between parties is such that one party is able to dominate his will on the other and uses that position to gain unfair advantage. In particular and without prejudice to the generality of the foregoing principle, a person is deemed to be in a position to dominate the will of another:
a) Where he hold a real authority over the other.
b) Where he makes a contract with a person whose mentally capacity is temporarily or permanent.

In section 16(2) implied or provide with example that in certain situation, a person is deemed to be in the position of dominating the will of the other if:
• If the person holds a real or apparent position of power.
• If stands in a fiduciary relationship with the other.
• If the other person is mentally weak because of sickness, disease, or economic distress. ISSUES OF CASE

There are three issues raised in this question. They are:

1) Whether induced by undue influence.

2) Whether plaintiff was in position to dominate the will of the defendants and had obtained an unfair advantage by using that position.

3) Whether undue influence induced by a person not a party to the contract. This case is under contract act 1950, in section 6.

FACT OF CASE

MALAYSIAN FRENCH BANK BHD v ABDULLAH BIN MOHD YUSOF & ORS is the case about an…...

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