Can Ernie Cancel the Contract with Hadi for the iPhone?

Question from Sa, Can Ernie Cancel the Contract with Hadi for the iPhone?

Answer from AI:

Issue

Ernie was coerced by Hadi into selling her iPhone for RM1000 under the threat of smashing it. Hadi then sold the iPhone to Kamal for RM3000. After one year, Ernie wants to cancel the contract she made with Hadi, knowing that the iPhone is now with Kamal.

Law

The relevant law here is the **Sale of Goods Act 1957** (Malaysia). This Act governs the sale of goods and includes provisions on the formation of contracts, the transfer of property, and the rights and obligations of the parties involved.

Key sections of the Sale of Goods Act 1957 that may apply include:
– **Section 14**: Implied terms about title, quality, and fitness.
– **Section 15**: Implied condition that the seller has the right to sell the goods.
– **Section 16**: Implied condition as to quality or fitness.
– **Section 17**: Sale by description.
– **Section 18**: Sale by sample.
– **Section 27**: Transfer of title.

Additionally, the **Contracts Act 1950** may be relevant, particularly regarding the validity of contracts formed under duress or undue influence.

Application

1. **Ernie’s Rights**:
– **Duress**: Under the Contracts Act 1950, a contract entered into under duress (threats or coercion) is voidable at the option of the party under duress. Ernie can argue that her consent was not freely given due to Hadi’s threat to smash her iPhone.
– **Implied Terms**: Under the Sale of Goods Act 1957, there is an implied condition that the seller has the right to sell the goods. If Ernie can prove that her consent was obtained under duress, the sale to Hadi could be voided, meaning Hadi did not have the right to sell the iPhone to Kamal.

2. **Hadi’s Position**:
– **Breach of Contract**: If the contract with Ernie is voided, Hadi may be liable for breach of contract and may have to compensate Ernie.
– **Unjust Enrichment**: Hadi sold the iPhone for RM3000, making a significant profit. If the contract is voided, Ernie may have a claim for unjust enrichment against Hadi.

3. **Kamal’s Rights**:
– **Bona Fide Purchaser**: Under Section 27 of the Sale of Goods Act 1957, if Kamal bought the iPhone in good faith and without knowledge of the duress, he may have a good title to the iPhone. This means Kamal could retain ownership of the iPhone despite the issues between Ernie and Hadi.

Conclusion

Ernie may have the right to cancel the contract with Hadi due to duress, but this does not automatically mean she can reclaim the iPhone from Kamal if he is a bona fide purchaser. Ernie should consider the following steps:

1. Consult a legal professional to assess the strength of her claim of duress and the potential for voiding the contract.
2. File a claim in court to void the contract with Hadi and seek compensation for any losses incurred.
3. Consider negotiating with Hadi for a settlement, possibly involving the return of the RM1000 and additional compensation.

For more detailed information, you can refer to the [Sale of Goods Act 1957](https://www.agc.gov.my/agcportal/uploads/files/Publications/LOM/EN/Act%20262.pdf) and the [Contracts Act 1950](https://www.agc.gov.my/agcportal/uploads/files/Publications/LOM/EN/Act%20136.pdf).

**Note**: This information is intended to provide a general understanding of the legal issues involved. For personalized legal advice, it is crucial to consult with a qualified legal professional.