Collateral Contract Essay

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7.5 COLLATERAL CONTRACTS Kluang Wood Products Sdn Bhd & Anor v Hong Leong Finance Berhad and Anor,[1999] 1 MLJ 193, FC. ISSUE OF THE CASE: Whether the evidence of the oral promise could be given in view of sections 91 and 92 of the Evidence Act 1950. FACTS OF THE CASE This case went on appeal to the Federal Court. The majority of the Federal Court judges upheld the trial judge's decision and held that a collateral warranty existed. In this case, the first appellant was a housing developer and the registered proprietor of a piece of land. The second appellant ('Chew') was a director of the first appellant. Chew was introduced to Pang, the southern regional manager of the first respondent and they discussed banking facilities to enable the first appellant t& develop the land into a housing estate Judgment of the case: the trial judge held that in order to establish the presence of a collateral contract, the party must show the following: (i) a representation which was intended by the defendants to be relied upon; (ii) the representation induced the signing of the contract; and (iii) the representation itself must amount to a warranty, collateral to the main contract and existing side by side with it. 75.1 Exist side by side yet independent Tan Swee Hoe Co Ltd v Ali Hussain Brother [1980] 2 MLJ 16, FC Issue: Whether the evidence of the oral promise could be given in view of sections 91 and 92 of the Evidence Act 1950. Facts of the case: In this case, Tan Swee Hoe was the landlord or the appellants to the Ali Hussain Bros, while Ali Hussain Bros was the tenant or the respondents to the Tan Swee Hoe. The appellants actually had brought this case to the lower court but had been dismissed. Yet, in December 1970, they filed their present claim to the federal court, praying for vacant premises, arrears of rent, mesne profits and damages. It

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