Contracts Act 1950 (Act 136).

This Malaysian Contracts Act 1950 (Act 136) sets out the legislative framework governing contracts in Malaysia. It consists of 191 Sections divided into 10 Parts.
Part 2 provides for the communication, acceptance and revocation of proposals, and Part 3 defines contracts, voidable contracts and void agreements. Section 2(b) states that a proposal when accepted becomes a promise; Section 2(h) affirms the binding nature of promises and states that ‘an agreement enforceable by law is a contract’. The essential requirement of free consent is set out in Section 10(1) which provides that ‘All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void’. Free consent is further defined in Section 14 as consent which is not caused by coercion, undue influence, fraud, misrepresentation or mistake. When consent to an agreement is caused by coercion, fraud, or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused (Section 19(1)). Part 5 makes provisions on performance of contracts. Section 38(1) of the Contracts Act 1950 provides that the parties to a contract must either perform or offer to perform their respective promises, unless such performance has been dispensed with by law. Part 6 deals with certain relations resembling those created by contract. Part 7 makes provisions on the consequences of breach of contract, including: compensation for loss or damage caused by breach of contract, compensation for failure to discharge obligation resembling those created by contract, etc. The Contracts Act 1950 further makes provisions for indemnity and guarantee, and appoinment and authority of agents.