Under the Contracts Act 1950, it is important to consider the authority given by the principal to the agent. If the agent exceeds their authority, the principal may not be bound by the contract. In this case, Hans appointed Olaf as his agent with a specific limit of RM120,000 to buy a car. However, Olaf went ahead and ordered a car priced at RM140,000, exceeding the authorized limit.
Based on these facts, Hans may have grounds to argue that there was no contract between him and the seller because Olaf exceeded his authority. If the court determines that Olaf exceeded his authority, Hans may not be bound to fulfill the contractual obligations.
However, it's worth noting that the seller may claim that a contract had been concluded through ratification, where Hans accepted and benefited from the car. Ratification occurs when the principal accepts the unauthorized actions of the agent after the fact. If the court finds that ratification has taken place and all the conditions of ratification have been fulfilled, Hans may be held responsible for the contract.
To provide a specific case example, one relevant case is the Malaysian case of Taw Cheng Kong v Su Chen Kuok Sdn Bhd [1983] 2 MLJ 227. In this case, the court held that if an agent exceeds their authority, the principal is not bound by the contract unless ratification occurs. The court emphasized that the principal must have full knowledge of the agent's unauthorized act and accept it explicitly or implicitly.
Based on the information provided, Hans should consult with a legal professional to assess the specific circumstances and legal implications in his situation.