Law of Contract

The issue is whether the transfer of house is acceptable and valid under Sec 26 of CA 1950. The law applicable are Sec 26 of CA has stated that agreement made without consideration is void. According to Sec 2(d) of CA, consideration is an act or abstinence or promise by the promisee or any other person as required by the promisor in return for his promise. Literally, it means something that is given in return for something else. On the other hand, there was an exceptions under Sec 26 of CA which is an agreement without consideration is void unless the contract made on account of natural love and effection that is stated in Sec 26(a) of CA.

There are several requirements under Sec 26(a) of CA which is the contract must be expressed in writting, must be registered if required by law and made on account of natural love and affection and between parties standing in near relation to each other. Sec 26 of CA further illustrate that ‘A’, for natural love and affection, promises to give his son ‘B’, RM1000. ‘A’ puts his promise to ‘B’ into writing and registers it under a law for the time being in force for the registration of such documents. This is contract.

Additional, the meaning of the words ‘near relation’ varies from one social group to another as it depends on the customs and practice of such groups. For example, Case of Re Tan Soh Sim. The deceased, Tan Soh Sim, had three sisters. Their mother was firstly married to one Tan Ah Thai and had four children. When Tan Ah Thai died, she married one Khoo Kim Huat and had seven children. The Tan and Khoo children maintained social and friendly relations with one another. Tan Soh Sim married, but having no issue, adopted four children.

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The husband, one Chan, married a second wife, Tan Boey Kee. When Tan Soh Sim was on her death bed, to ill to make a will, all the Khoo and Tan children signed a document drawn up by a solicitor renouncing all claims to Tan’s estate in favour of the four adopted children and Tan Boey Kee. They were told by Tan Boey Kee that this was the intentions of Tan Soh Sim. Tan Soh Sim died without having recovered consciousness. The question arose in the distribution of Tan’s estate whether the instrument signed was valid. It was held, Chinese adopted children are related to the adoptive parents nd brothers, however they are not ‘nearly related’ to the family of their adoptive mother. Hence, uncles and aunties do not stand in near relation to their nephews and nieces. In this case, there was no natural love and affection between the signatories and donees. To apply these law to the facts of question, there is no consideration given by Milah to Pak Mail to complete validate the transfer of house as required by Sec 2(d) of CA. However, Sec 26 of CA has laid down a few exceptions where a construct is considered valid eventhough without a consideration.

That is the contract must be expressed in writing, must be registered if required by law and made an acount of natural love and affection between parties standing in near relation to each other. Refer back to requirement in Sec 26 of CA, Pak Mail based on love and affection could transfer the house to Milah, without Milah giving any consideration as Milah his daughter is standing in near relation to him and Pak Mail need to put in writing or contractual agreement and it need to registered by law to valid the transfer.

In case of Re Tan Soh Sim was faced with a case whose facts were essentially identical to those in this problem. In that case there was no natural love and effection between the signatories and donees because they are not ‘nearly related’ to the family of their adoptive mother eventhough in Chinese adopted children are related to the adoptive parents and brothers.

Although the Pak Mail’s problem is same to that in Re Tan Soh Sim’s case, it is suggested that the result is not same between in both cases. In saying that, Milah as Pak Mail’s daughter is standing near relation to him. So, there was natural love and affection between Pak Mail and Milah that can valid the transfer of house. The conclusion, the transfer is acceptable and valid under Sec 26 of CA 1950 as there is a valid contract which binding both of them.

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