Certainty
General Rule: Terms of the contract must be certain and
not vague.
Authority: S. 30 CA – agreements, the meaning of which
is not certain, or capable of being made certain, are
void.
Case: Guha Majumder v Donough [1974] 2 MLJ 114
Examples
#1
A agrees to sell to B a “100 tons of oil”. There is nothing
whatever to show what kind of oil was intended. The
Agreement is void for uncertainty.
#2
A who is a dealer in coconut oil only, agrees to sell to B “100
tons of oil”. The nature of A’s trade affords an indication of
the meaning of the words, and A has entered into a contract
for the sale of 100 tons of coconut oil.
Guha Majumder v Donough
Held: It is a well established rule that the parties must
make their own contract, and this means that they must
agree to its terms with sufficient certainty. If the terms
are unsettled or indefinite, there will be no contract.
Ho Ah Kim v Paya Trubong Estate Sdn Bhd [1987] 1 MLJ 143
Facts: There was a written agreement to purchase a part of
defendant’s land in Penang to the maximum extent of about
15 acres or less. The agreement stated two methods of
purchase price calculation. First by comparing with the
government’s acquisition price and if there is no acquisition,
$4000 per acre.
What do you think? Is the agreement certain?
Held: Court held that it is necessary requirement that an
agreement in order to be binding must be sufficiently
definite to enable the court to give it a practical meaning.
Its terms must be so definite or capable of being made
definite… so that the promises and performances to be done
by each party are reasonably certain.
Effect: The agreement is a valid and enforceable contract.
End of Elements of Contract
Recap
Elements of a valid contract.
What are the elements?
Why is it important?
Next topic – Free Consent
Let say an agreement fulfill all the elements thus
becomes a valid contract. What if the contract was
made due to threat? Or fraud?