2.2.1 Agreement made on account of natural love and affection :

2.2.1 Agreement made on account  of natural  love and affection :       26/03/2017

This exception is provided in sec26(a) of the contracts act 1950 of Malaysia.

The rule provides that any agreement which is made without consideration is still valid “if it is expressed in writing and registered under the law (if any ) for the time being in force for the registration of such documents and is made on account of natural love and affection between parties standing in a near relation to each other”.

This means the agreement that is not supported by any consideration is valid if it fulfills the following conditions :

(a)    The agreement is made in writing ;

(b)   The agreement is registered under the existing law which requires its registration ; and

(c)    The agreement is made on account of natural love and affection between the parties standing in near relation to each other.

Forexample  A,for natural love and affection ,promises to give his son B,$1000. 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 a contract . Under the exception ,there is a phrase ”near relation”that is attached to the position of the parties in the agreement.

Therefore ,in order to enforce the agreement made on account of natural love and affection ,the court must be satisfied that the parties who enter into the agreement must stand in near relation to each other besides having natural love and affection.The term “near relation “,  may be different for every social group ,depending on the ethnic groups and their customs .This is because the  personal law relating to family matters is applicable to the groups. 

In the Somali civil law ,This phrase “near relation”, is meant here that there is a direct family relationship between the parties who can make an agreement based on natural love and affection;such as parent and their children, being brothers or sisters, a husband and his wife etc.

2.2.2 Agreement to Compensate a Past Voluntary Act.

This the exception provided in section 26(b) of the contracts act 1950 in Malaysia .The rule provides that an agreement without considerationis valid  if “it is a promise to compensate ,wholly or in part ,a person who has already voluntarily done something for the promisor ,or something  which the promisor was legally compellable to do “.

It means ,if the promisee (acceptor) has done some act voluntarily on his own will,for the promisor promises to compensate the promisee for such,then that promise is enforceable.Similarly ,if the promisee has done some act ( an act which the promisor is compellable to do in law, forexample ,paying tax to the government )voluntarily on his own will for the promisor ,the promise made  by the promisor to compensate the act is also enforceable .

For example : A support B’s infant son. B promises to pay A’s experience in doing so . This is a contract and A can enforce B’s promise.

Similar to section2(d) this exception covers the principles of past consideration which has been explained above.If section 2(d) coves an act which has been done at the request of the promisor, section 26 (b) covers an act which has been done voluntarily by the promisee ( before the promise to compensate the promisee is made by the promisor ). Thus in order to enforce the promises made for the past consideration under sec26(b) the promisee must have acted voluntarily for the promisor in that particular action.

2.2.3 Agreement to     Pay a Statute-barred Debt.

This is another exception provided in section 26(c) of the contracts act 1950  in Malaysia .

The rule provides that an agreement without consideration is valid “if it is a promise ,made in writing and signed by the person to be charged therewith,or by his agent generallyor specially authorized in that behalf ,to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits”.

What it means under this  exception is that ,the promisor is liable to pay a previous debt ( which the creditor cannot recover through legal action because the time within which the creditor must commence legal action is limited by statute ) if the following conditions arise :

·         The debtor makes a fresh promise to pay the statute-barred debt ; and

·         The promise is made in  writing and signed by the person to be charged or his authorized agent .

For example A owes B $1000 but the debt is barred by limitations. A signs a written  promise to pay $500 on account of the debt .This is a contract .

What is meant by statute-barred debt ? It is a debt which cannot be recovered because the time allowed to a party to enforce his legal rights is limited by the limitation act of 1953 in Malaysia.The limitation act provides six years as the  time  limit for any party to take legal  action in contract .The six years run from the time the cause of action arises ( usually from the time of the breach of contract by the contracting party ).Therefore, the promise to pay the statute-barred debts under this exception will form a new cause of action although without consideration,the fresh promise is valid .This is provided in sec26(2) of the limitation act 1953 in Malaysia.

SELEF-CHECK QUESTIONS: 1.What is the general rule of consideration ? 2.Is there any exception available to the general rule of consideration ? 3.What are the important conditions required in an agreement to pay a statute-barred debt ?