CONTRACT LAW
By Faudzil Harun
The Principles of Contract Law
In Laws v London Chronicle (1959 2AER285) Lord Evershed said :
“A contract of service is but an example of contracts in general so that the general law of contracts will be applicable.” A contract is an agreement by which two or more persons agree to regulate their legal relationship recognized and enforced by the law. Before the law will recognize an agreement as a contract, certain conditions must be fulfilled.
They are :
1. One party must expressly or implicitly agree to perform an undertaking
and the other party must agree to accept such performance, that is to say
there must be an offer by one party and an acceptance by the other.
2. The agreement must be supported by consideration. In the contract of
employment, wages paid for work done is the consideration.
3. Both parties must be persons whom the law acknowledges as competent
to enter contracts. They must be adults who can enter into contracts as
provided in the Contracts Act, 1950. Section 13 of the Children and Young
Persons (Employment) Act, 1966 provides that a child that is one who has
not completed his fourteenth year of age shall be competent to enter into
a contract of service to engage in occupation permitted by the Act.
4. Both parties must intend that the agreement shall give rise to a legally
recognized obligation. The object of the contract must be legal.
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All contracts having objects contrary to statue or common law or which entail the passing of an illegal consideration are void. However the basic common law distinction is that contracts illegal in inception are void but contracts, which are legal in inception but later, performed in an illegal manner may not be void. In Coral Leisure Groups Ltd. V Barnett (1981 IRLR 204) the Employment Appeal Tribunal held that the Tribunal had jurisdiction to hear a claim for unfair dismissal by an employee whose duties partly entailed hiring prostitutes for the employer’s clients. The EAT held that the ex-employee had not been taken on to hire prostitutes and it was not part of his contract to do so. The contract was therefore not illegal in inception.
Requirement of Documented Contracts
The Employment Regulations, 1957 under the Employment Act, 1955, require the employer to furnish to every employee covered by the Employment Act, 1955, with the following :
Regulation 8
A certified copy of the terms and conditions of employment.
Regulation 9
A statement of particulars relating to details of wages and other allowances
earned during each wage period.
Failure to do so is an offence, for which the employer can be punished under
Section 97 of the Employment Act, 1955.