Join our Law Notes WhatsApp Group and stay updated with Legal and Judicial Updates

Malaysian Contracts Act, 1950

Jump to:navigation, search
HomeBrud.gifMalaysia LawBrud.gifActsBrud.gifMalaysian Contracts Act, 1950

Contracts Act 1950

Act 136

First enacted: 1950 (F.M. Ordinance No. 14 of 1950)

Revised: 1974 (Act 136 w.e.f. 1 July 1974)

Part I: Preliminary


  • Section 3: Communication, acceptance and revocation of proposals
  • Section 4: Communication, when complete
  • Section 5: Revocation of proposals and acceptances
  • Section 6: Revocation how made
  • Section 7: Acceptance must be absolute
  • Section 8: Acceptance by performing conditions, or receiving consideration
  • Section 9: Promises, express and implied


  • Section 10: What agreements are contracts
  • Section 11: Who are competent to contract
  • Section 12: What is a sound mind for the purposes of contracting
  • Section 13: “Consent”
  • Section 14: “Free consent”
  • Section 15: “Coercion”
  • Section 16: “Undue influence”
  • Section 17: “Fraud”
  • Section 18: “Misrepresentation”
  • Section 19: Voidability of agreements without free consent
  • Section 20: Power to set aside contract induced by undue influence
  • Section 21: Agreement void where both parties are under mistake as to matter of fact
  • Section 22: Effect of mistake as to law
  • Section 23: Contract caused by mistake of one party as to matter of fact
  • Section 24: What considerations and object are lawful, and what not Void Agreements
  • Section 25: Agreements void if considerations and objects unlawful in part
  • Section 26: Agreement without consideration, void, unless—
    • (a) it is in writing and registered;
    • (b) or is a promise to compensate for something done;
    • (c) or is a promise to pay a debt barred by limitation law
  • Section 27: Agreement in restraint of marriage void
  • Section 28: Agreement in restraint of trade void
    • Exception 1—Saving of agreement not to carry on business of which goodwill is sold;
    • Exception 2—of agreement between partners prior to dissolution;
    • Exception 3—or during continuance of partnership
  • Section 29: Agreements in restraint of legal proceedings void
    • Exception 1—Saving of contract to refer to arbitration dispute that may arise
    • Exception 2—Saving of contract to refer questions that have already arisen
  • Section 30: Agreements void for uncertainty
  • Section 31: (1) Agreements by way of wager void
    • (2) Exception in favour of certain prizes for horse racing


  • Section 32: “Contingent contract”
  • Section 33: Enforcement of contracts contingent on an event happening
  • Section 34: Enforcement of contracts contingent on an event not happening
  • Section 35: When event on which contract is contingent to be deemed impossible, if it is the future conduct of a living person
  • Section 36: (1) When contracts become void which are contingent on happening of specified event within fixed time
    • (2) When contracts may be enforced which are contigent on specified event not happening within fixed time
  • Section 37: Agreement contingent on impossible events void


Contracts which must be Performed

  • Section 38: Obligation of parties to contracts
  • Section 39: Effect of refusal to accept offer of performance
  • Section 40: Effect of refusal of party to perform promise wholly

By whom Contracts must be Performed

  • Section 41: Person by whom promise is to be performed
  • Section 42: Effect of accepting performance from third person
  • Section 43: Devolution of joint liabilities
  • Section 44: (1) Any one of joint promisors may be compelled to perform
    • (2) Each promisor may compel contribution
    • (3) Sharing of loss by default in contribution
  • Section 45: Effect of release of one joint promisor
  • Section 46: Devolution of joint rights

Time and Place for Performance

  • Section 47: Time for performance of promise where no application is to be made and no time is specified
  • Section 48: Time and place for performance of promise where time is specified and no application to be made
  • Section 49: Application for performance on certain day to be at proper time and place
  • Section 50: Place for performance of promise where no application to be made and no place fixed
  • Section 51: Performance in manner of at time prescribed or sanctioned by promisee

Performance of Reciprocal Promises

  • Section 52: Promisor not bound to perform unless reciprocal promisee ready and willing to perform
  • Section 53: Order of performance of reciprocal promises
  • Section 54: Liability of party preventing event on which contract is to take effect
  • Section 55: Effect of defaults as to that promise which should be first performed, in contract consisting of reciprocal promises
  • Section 56: (1) Effect of failure to perform at fixed time, in contract in which time is essential
    • (2) Effect of failure when time is not essential
    • (3) Effect of acceptance of performance at time other than that agreed upon
  • Section 57: (1) Agreement to do impossible act
    • (2) Contract to do act afterwards becoming impossible or unlawful
    • (3) Compensation for loss through non-performance of act known to be impossible or unlawful
  • Section 58: Reciprocal promise to do things legal, and also other things illegal
  • Section 59: Alternative promise, one branch being illegal

Appropriation of Payments

  • Section 60: Application of payment where debt to be discharged is indicated
  • Section 61: Application of payment where debt to be discharged is not indicated
  • Section 62: Application of payment where neither party appropriates

Contracts which need not be Performed

  • Section 63: Effect of novation, rescission and alteration of contract
  • Section 64: Promisee may dispense with or remit performance of promise
  • Section 65: Consequences of rescission of voidable contract
  • Section 66: Obligation of person who has received advantage under void agreement, or contract that becomes void
  • Section 67: Mode of communicating or revoking rescission of voidable contract
  • Section 68: Effect of neglect of promisee to afford promisor reasonable facilities for performance


  • Section 69: Claim for necessaries supplied to person incapable of contracting, or on his account
  • Section 70: Reimbursement of person paying money due by another, in payment of which he is interested
  • Section 71: Obligation of person enjoying benefit of non-gratuitous act
  • Section 72: Responsibility or finder of goods
  • Section 73: Liability of person to whom money is paid, or thing delivered, by mistake or under coercion


  • Section 74:
    • (1) Compensation for loss or damage caused by breach of contract
    • (2) Compensation for failure to discharge obligation resembling those created by contract
  • Section 75: Compensation for breach of contract where penalty stipulated for
  • Section 76: Party rightfully rescinding contract entitled to compensation

Part VIII: Of Indemnity and Guarantee

  • Section 77: “Contract of indemnity”
  • Section 78: Rights of indemnity holder when sued
  • Section 79: “Contract of guarantee”, “surety”, “principal debtor”, and “creditor”
  • Section 80: Consideration for guarantee
  • Section 81: Surety’s liability
  • Section 82: “Continuing guarantee”
  • Section 83: Revocation of continuing guarantee
  • Section 84: Revocation of continuing guarantee by surety’s death
  • Section 85: Liability of two persons, primarily liable, not affected by arrangement between them that one shall be surety on other’s default
  • Section 86: Discharge of surety by variance in terms of contract
  • Section 87: Discharge of surety by release or discharge of principal debtor
  • Section 88: Discharge of surety when creditor compounds with, gives time to, or agrees not to sue principal debtor
  • Section 89: Surety not discharged when agreement made with third person to give time to principal debtor
  • Section 90: Creditor’s forbearance to sue does not discharge surety
  • Section 91: Release of one co-surety does not discharge others
  • Section 92: Discharge of surety by creditor’s act or omission impairing surety’s eventual remedy
  • Section 93: Rights of surety on payment or performance
  • Section 94: Surety’s right to benefit of creditor’s securities
  • Section 95: Guarantee obtained by misrepresentation invalid
  • Section 96: Guarantee obtained by concealment invalid
  • Section 97: Guarantee on contract that creditor shall not act on it until co-surety joins
  • Section 98: Implied promise to indemnify surety
  • Section 99: Co-sureties liable to contribute equally
  • Section 100: Liability of co-sureties bound in different sums

Part IX: Of Bailment

  • Section 101: “Bailment”, “bailor” and “bailee”
  • Section 102: Delivery to bailee how made
  • Section 103: Bailor’s duty to disclose faults in goods bailed
  • Section 104: Care to be taken by bailee
  • Section 105: Bailee when not liable for loss, etc., of thing bailed
  • Section 106: Termination of bailment by bailee’s act inconsistent with conditions
  • Section 107: Liability of bailee making unauthorized use of goods bailed
  • Section 108: Effect of mixture, with bailor’s consent, of his goods with bailee’s
  • Section 109: Effect of mixture, without bailor’s consent, when the goods can be separated
  • Section 110: Effect of mixture, without bailor’s consent, when the goods cannot be separated
  • Section 111: Repayment by bailor of necessary expenses
  • Section 112: Restoration of goods lent gratuitously
  • Section 113: Return of goods bailed, on expiration of time or accomplishment of purpose
  • Section 114: Bailee’s responsibility when goods are not duly returned
  • Section 115: Termination of gratuitous bailment by death
  • Section 116: Bailor entitled to increase or profit from goods bailed
  • Section 117: Bailor’s responsibility to bailee
  • Section 118: Bailment by several joint owners
  • Section 119: Bailee not responsible on re-delivery to bailor without title
  • Section 120: Right of third person claiming goods bailed
  • Section 121: Right of finder of goods; may sue for specific reward offered
  • Section 122: When finder of thing commonly on sale may sell it
  • Section 123: Bailee’s particular lien
  • Section 124: General lien of bankers, factors, wharfingers, advocates and policy brokers

Bailments of Pledges

  • Section 125: “Pledge”, “pawnor” and “pawnee”
  • Section 126: Pawnee’s right of retainer
  • Section 127: Pawnee not to retain for debt or promise other than that for which goods pledged. Presumption in case of subsequent advances
  • Section 128: Pawnee’s right as to extraordinary expenses incurred
  • Section 129: Pawnee’s right where pawnor makes default
  • Section 130: Defaulting pawnor’s right to redeem
  • Section 131: Defaulting pawnor’s right to redeem
  • Section 132: Pledge where pawnor has only a limited interest

Suits by Bailees or Bailor againts Wrongdoers

  • Section 133: Suit by bailor or bailee against wrongdoer
  • Section 134: Apportionment of relief or compensation obtained by such suits

Part X: Agency

Appoinment and Authority of Agents


  • Section 143: When agent cannot delegate
  • Section 144: “Sub-agent”
  • Section 145
    • (1) Representation of principal by sub-agent properly appointed
    • (2) Agent’s responsibility for sub-agent
    • (3) Sub-agent’s responsibility
  • Section 146: Agent’s responsibility for sub-agent appointed without authority
  • Section 147: Relation between principal and person duly appointed by agent to act in business of agency
  • Section 148: Agent’s duty in naming such person


  • Section 149: Right of person as to acts done for him without his authority. Effect of ratification
  • Section 150: Ratification may be expressed or implied
  • Section 151: Knowledge requisite to valid ratification
  • Section 152: Effect of ratifying unauthorized act forming part of a transaction
  • Section 153: Ratification of unauthorized act cannot injure third person

Revocation of Authority

  • Section 154: Termination of agency
  • Section 155: Termination of agency, where agent has an interest in subject-matter
  • Section 156: When principal may revoke agent’s authority
  • Section 157: Revocation where authority has been partly exercised
  • Section 158: Compensation for revocation by principal or renunciation by agent
  • Section 159: Notice of revocation or renunciation
  • Section 160: Revocation and renunciation may be expressed or implied
  • Section 161: When termination of agent’s authority takes effect as to agent, and as to third persons
  • Section 162: Agent’s duty on termination of agency by principal’s death or insanity
  • Section 163: Termination of sub-agent’s authority

Agent’s duty to Principal

  • Section 164: Agent’s duty in conducting principal’s business
  • Section 165: Skill and diligence required from agent
  • Section 166: Agent’s accounts
  • Section 167: Agent’s duty to communicate with principal
  • Section 168: Right of principal when agent deals, on his own account, in business of agency without principal’s consent
  • Section 169: Principal’s right to benefit gained by agent dealing on his own account in business of agency
  • Section 170: Agent’s right of retainer out of sums received on principal’s account
  • Section 171: Agent’s duty to pay sums received for principal
  • Section 172: When agent’s remuneration becomes due
  • Section 173: Agent not entitled to remuneration for business misconducted
  • Section 174: Agent’s lien on principal’s property

Principal’s duty to Agent

  • Section 175: Agent to be indemnified against consequences of lawful acts
  • Section 176: Agent to be indemnified against consequences of acts done in good faith
  • Section 177: Non-liability of employer of agent to do a criminal act
  • Section 178: Compensation to agent for injury caused by principal’s neglect
  • Section 179: Enforcement and consequences of agent’s contracts
  • Section 180: Principal how far bound when agent exceeds authority
  • Section 181: Principal not bound when excess of agent’s authority is not separable
  • Section 182: Consequences of notice given to agent
  • Section 183: Agent cannot personally enforce, nor be bound by, contracts on behalf of principal

Presumption of contract to contrary

  • Section 184: Rights of parties to a contract made by agent not disclosed
  • Section 185: Performance of contract with agent supposed to be principal
  • Section 186: Right of person dealing with agent personally liable
  • Section 187: Consequence of inducing agent or principal to act on belief that principal or agent will be held exclusively liable
  • Section 188: Liability of pretended agent
  • Section 189: Person falsely contracting as agent not entitled to performance
  • Section 190: Liability of principal inducing belief that agent’s unauthorized acts were authorized
  • Section 191: Effect, on agreement, of misrepresentation or fraud by agent

Related Topics