Contract Law Malaysia Consideration

In Malaysia, considerations are a crucial aspect of contract law. It is necessary to understand the concept of consideration in order to form a valid and enforceable contract. As a copy editor with SEO experience, I will be discussing the importance of consideration in Malaysian contract law.

What is Consideration?

Consideration refers to the value given by one party in exchange for the promise made by another party. It is an essential element in the formation of any contract in Malaysia. Consideration can take any form, including money, goods, services, promises, or forbearance to act.

Consideration serves as a form of exchange and is required for a contract to be considered valid and enforceable. It is a means of ensuring that both parties are bound by the agreement and that there is mutual obligation between them.

The Two Forms of Consideration

Consideration can come in one of two forms; past and present consideration. Present consideration is when something is given at the time of the contract being formed. On the other hand, past consideration is something that was given before the time the contract was formed. In Malaysia, past consideration is not recognized as valid consideration.

For example, if John promises to pay Sarah RM1,000 in exchange for her designing a website for his business, the consideration would be present. However, if John promises to pay Sarah RM1,000 for designing his website after she has already completed the task, the consideration would be a past act and may not be considered valid.

The Importance of Consideration

Consideration ensures that a contract is not one-sided. Both parties will have obligations to fulfil, and this helps to ensure fairness and equity in dealings between parties. Consideration also ensures that parties do not enter into contracts void of obligations.

Moreover, consideration helps to determine the validity of a contract. A contract must have sufficient consideration to be enforceable in a court of law. The consideration must be of adequate value to be legally recognised.


In Malaysia, consideration plays an essential role in contract law. It is an essential element in forming a valid and enforceable contract, as it ensures that both parties have obligations to fulfil. It is necessary to ensure that the consideration given in exchange for a promise is of adequate value to be legally recognised in Malaysia. As a professional, it is crucial to include relevant keywords in articles on contract law in Malaysia, such as “consideration,” “mutual obligation,” and “enforceability.”

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