Tuesday, July 24, 2007

A Guarantee that didn't work.

This case happened in Malacca.
A ordered some goods from B.B claimed that had it not because of a verbal promise by C to guarantee payment of the goods he wouldn't have delivered the goods to A.This was so far what was claimed by B,whatever things that you said, it has to be proved in Court.There must be witness or any documents to support your claim.
B denied that he had ever made any such verbal guarantee.
The matter did not just end here. A few days after the delivery of the goods and upon A 's failure to pay for it, B got C.B brought a few people to meet up with C.D, a friend of C,witnessed the meeting from afar.
B brought five people to see C in a restaurant. D waited in the car outside of the restaurant.
When C came back,he told D that he was assaulted by B's people in the restaurant.He was made to sign a guarantee agreement.C immediately went to lodge police report regarding the incident.
In more formal language we would say that C was being coerced into signing the agreement.
Section 15 of the Contract Act 1950 explains 'Coerction'
15.Coercion
Coercion is the committing or threatening to commit any act forbidden by the Penal code....with the intention of causing any person to enter into an agreement.

Obviously B had made use of some people to cause fear into C resulting in the signing the agreement.

These were all facts coming from the mouths of witnesses in the Court.
What was the outcome of the case?
The Court held that it was not convinced by B's claim that C hab made a verbal guarantee.There was insufficient evidence for the claim.
As to the written guarantee which C entered into later,the Court ruled that it was not a document voluntarily signed by C.It was signed under intimidation therefore not a valid document.

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