Legal Principles and Analysis of Contracts: Consideration, Intention, and Illegality

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Assignment Question

Marcus is a carpenter and specialises in refurbishing old apartments and building. Marcus received a sub-contract from ABC Sdn Bhd to refurbish 10 (Ten) units of old flats in Sungai Buloh. The contract states that the total amount payable for the refurbishment is RM400,000-00 and Marcus will have to complete the project by September 2020.

However, Marcus realised that he underestimated the cost of repair which now exceeds RM650,000-00. Marcus approached ABC Sdn Bhd and demanded an extra RM150,000-00 to complete the project, which if not paid to him.

Marcus threatened to halt work. ABC Sdn Bhd agreed with the extra payment because they were worried that the project might be delayed and legal repercussions might ensue. Marcus completed the project on time and now demands the extra RM150,000-00.

Marcus also enters another contract with DEF Sdn Bhd where he agrees to refurbish 2 shop lots at Tanjung Malim for RM50,000-00. DEF Sdn Bhd had paid the amount of RM50,000-00 to Marcus and all the work have been completed. Recently, while Marcus is doing his company’s accounts, he noticed that he had entered an agreement with DEF Sdn Bhd below-cost.

The refurbishment actually cost him about RM60,000 based on market value on items that he has purchased. Marcus now wants to claim the additional RM10,000 and take legal action against DEF Sdn Bhd but DEF Sdn Bhd refuses to do so as the company contends that the agreement has been completed and that the contract is valid notwithstanding the market value. Since a lawsuit is pending, DEF Sdn Bhd engaged a law firm and they had advised that DEF Sdn Bhd should not be accountable for the miscalculation of Marcus.

Nonetheless, DEF Sdn Bhd wants to settle this out of court and upon legal advice, the law firm issued a letter to Marcus to pay the amount of RM2,000-00 as full and final settlement on a ‘without prejudice and without admission of liability’ basis. The letter enclosed a post-dated cheque amounting to RM2,000-00. Marcus took the cheque and deposited the sum in his account. He later commenced legal action against DEF Sdn Bhd for the balance of RM8,000.

Due to the various miscalculations, Marcus’s business is running at a loss and he is in a dire financial situation. However, he had just purchased a luxury FENDI wallet from a personal shopper in France named Kit Sing for RM20,000-00. At the same time, Marcus had previously entered into an agreement with his wife.

Lvelyn, to pay her RM5,000 for taking care of their 6 children while he is away for business trip from the month of April to September 2020. To solve this matter, Marcus requested his good friend, Tony to pay for the wallet, and Marcus further threatened his wife Ivelyn that there is no agreement as Ivelyn is just ‘doing her job’ as a wife and mother.

Marcus has also promised Chi Yang his good friend that he will secure him a job at an International Company, BP Oil, but Chi Yang have to pay Marcus RM50,000-00 for that job position. Chi Yang paid the money to Marcus but till now have yet to receive such job offer. Advise Marcus, DEF Sdn Bhd,  Ivelyn and Chi Yang as to their rights, if any