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What is Contract?
4. Certainty
5. Legal capacity 6. Free Consent 7. Legality of the Objects 8. Required Formalities.
1. OFFER
Offer
Definition s2(a) CA
ITT
Revocation of offer
An offer is a proposal
Definition of an offer
Section 2 (a) of CA 1950
S.2(a) when one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to the act or abstinence, he is said to make a proposal.
Definition of an offer
Example:
A, by offering to buy Bs car for RM 20,000 in the hope that B will accept MAKING OFFER/ PROPOSAL
Types of Offer
An offer maybe:
express (verbally or in writing i.e. : agreement). implied
Types of Offer
Section 9 of CA: If an offer is made in word or writing it is said to express. If an offer is made by one act or behavoiur it is said to be implied.
1) Specific
2) General/ Public
1) Specific
Addressed to specific person Only the addressee may accept the offer Who is not addressee, cannot make the acceptance
Boulton v Jones
Jones (D) normally had some business deal with Brocklehurst. D offered to buy some goods from Brocklehurst, but on the day the order was sent, Brocklehurst had sold his company to P. The P did not inform the D that the business had changed hands. When the D knew the goods had not come from Brocklehurst , he refused to pay for the goods.
Held:
1) Public/General
Addressed generally to any one who may satisfy all the terms or conditions stipulated by the offeror. One who satisfies all the terms of the offer is considered as making acceptance. Then, the offeror is bound to the contract.
the D issued an advertisement in which they offered to pay 100 pound to any person who suffered from influenza after having used one of their smoke balls. The P bought and used the smoke ball and caught influenza. She sued the company for the promised reward. The D refused to pay because he argued that one cannot make an offer with entire world.
the D has to pay the reward to P as an offer can be made to the entire world.
Condition of an offer
1. certain
2. communicated
1. certain
Lynn offered to buy a horse from Guthing on condition that if the horse brings luck to him. Then only he pay another 5 pound extra.
Held: The offer was not final & incomplete. Therefore, NOT VALID.
2. communicated
S. 2 (a)
when one person signifies to another
Communication of an Proposal
S. 4(1) the communication of proposal is complete when it comes to the knowledge of the person to whom it is made
R v Clarke
Australian government offered a reward for information leading arrest of persons responsible for the murder of two policeman. X and Clarke were arrested and charged with murder. During investigation, Clarke gave information which lead to the arrest of Y (the real culprit). X and Y later convicted for murder and Clarke was discharged.
R v Clarke
Clarke then reward. Claimed for the
Clarkes claim was rejected by the court because he has no knowledge with regard to the offer by Australian government. He gave the info not because he knows about the reward but to release himself.
ITT
Cant form a contract Thus, NO BINDING It merely invitation from 1 party to another party to make an offer.
advertisement
Display of goods
tender
Auction
a. Advertisement
An advertisement is only an invitation to applicants to make an offer.
However,
Subsequently, the R tried to terminate the A based on the reason that the A was appointed on probation. Then A sued R for breach of the contract.
The court held that: the advertisement was an invitation to treat. But The application made by the applicant was considered as an offer. And the appointment of the applicant was considered as an acceptance
However,
B. Display of Goods
Self service shop/ shop window display Do not constitute a proposal to sell=ITT The proposal /OFFER: when the customer selects the desired goods for payments at the counter.. Offer comes from the customer, not from the shop/supermarket
B. Display of Goods
When the offer is made by the customer It is entirely up to the cashier at the counter to make acceptance (scan the goods) or to refuse the offer.
Fisher v Bell
The D displayed a flick knife in the window of his shop. Under the Restrictive Weapon Act, it was illegal to manufacture, sell, hire or offer for sale or hire or lend to any other person any flick knife. Because of that display act, the D then was charged for contravened the Act by offering the flick knife for sale. The D submitted that this was not sufficient to constitute an offer.
Fisher v Bell
The court held that
Issue: whether Contract is complete at the moment customer took an article from the shelves and put in the basket?
Sale /contract complete at the cashier desk (when the payment has been made/the cashier scan ) not only by putting the things in the basket { OFFER}
The cashier has the right to accept/ reject. Thus, The display of goods=ITT The shop owner HAD NOT MADE an unlawful sale.
(Payment was to be made at the exit where a cashier was stationed and in every case involving drugs, a pharmacist supervised the transaction and was authorised to prevent a sale).
C. Tender
A tender is only ITT. X invites a supplier to tender a quotation for goods or services. An action taken by X is not an offer, therefore X is not bind to accept the bid.
C. Tender
An offer is actually made by the supplier to X. A person who make a notice of tender/announcement all FREE to ACCEPT/REJECT.
Spencer v Harding
The D made announcement inviting tenders for sale of certain goods.
The offer made by the P is the highest but the D did not accepted that.
The P alleged that the D had breached the contract.
Spencer v Harding
The Court:
A circular offering stock for sale by tender was simply a proclamation that the D were already to negotiate for sale of goods and it merely ITT.
No obligation to sell to the highest bidder
Spencer v Harding
The Court:
HOWEVER
It is different if stated that the highest bid/low quotation will be definitely be accepted.
D. Auction
An auction is only ITT. The auctioneer is merely inviting the people present to make proposals which the auctioneer may accept or decline to accept. Person who bids the price is the offerror.
D. Auction
Acceptance to the offer by the auctioneer is by knock of hammer (S.10 of the Auction Sale Act).
Preston Corporation Sdn Bhd v Edward Leong & Others [1982] 2 MLJ 22
The Publisher asked for quotation from the Printers The (R ) gave quotation to the A. A then made some printing orders based on the quotation given.
Explanation :
The printing orders made by the A=Offer which was subject to the acceptance by the R.
Salleh Abas F.J in our view, the date of confirmation was the date on which contractual relationship between the parties began because the offer in the context of offer & acceptance necessary for the formation of a contract was the printing order and not the quotation.
REVOCATION OF OFFER
REVOCATION OF OFFER
A proposal, once communicated, remains open until it is withdrawn, cancelled, retracted or lapsed.
REVOCATION OF OFFER
S.5(1) of the CA :
a proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards
Communication of Acceptance
s. 4(2) of the Contracts Act 1950 (a) against the OFFEROR : put in the course of transmission to him. i.e.: Offeree post the LOA to Offeror.
Communication of Acceptance
Illustration (b) of s4 stated : B accepts As proposal by a letter sent by post. The communication of the acceptance is complete as against A, when the letter is posted.
62
REVOCATION OF OFFER
S.5(1) of the CA :
a proposal may be revoked at any time before the acceptor send letter of acceptance, but not afterwards
Routledge v Grant
The D offered to sell a house to P and the acceptance was to be made within 6 weeks. Issue:
Routledge v Grant
Court laid down the principle :
the Offeror can revoke his offer at any time provided that NO acceptance be made by the Offerree during that time .
Revocation :
Section 6 of CA: (a) Communication of notice of revocation by the proposer to the acceptor;
When communication of revocation of proposal is complete? Section 4(3)(a) of CA: on the part of the offeror, when it is put into a course of transmission to the offeree. (A sent the LORO to B)
on the part of the offeree when it comes to his knowledge. (B received the LORO from A)
Revocation of offer posted on 8/10 was not effective till 20/10 ( when the P received the said LORO) At the meantime, P had already accepted the offer on 11/10 (telegram).
Revocation of offer posted on 8/10 was not effective till 20/10 ( when the P received the said LORO) At the meantime, P had already accepted the offer on 11/10 (telegram).
Example:
A offers by letter to sell a house to B. The communication of offer complete when B receives the letter.
Revocation :
Section 6 of CA: (b) Lapse of time prescribed in the proposal or if no time prescribed, by of lapse of a reasonable time;
Macon Works & Trading Sdn Bhd v Phang Hon Chin (1976) 2 MLJ 177
An offer lapses after a reasonable time. Failure to accept the offer within reasonable time shows rejection by the offeree.
The D applied for shares in the P company on 8 June, and had paid a deposit.
He received no further news until 23 November when he was informed that the shares had been alloted to him and that he should pay the balance due on them.
D refused to pay the balance.
that there was no valid binding contract bacause acceptance was not made within reasonable time.
Revocation :
Section 6 of CA: ( c) Failure of the acceptor fulfill a condition of an acceptance;
Example:
A company offers to employ Iskandar on condition that he passes a skill test. If the applicant fails the test, the proposal is revoked because Iskandar does not fulfill a condition
The Ds offer to buy the car is only accepted if the car remained in the same condition when the offer was made.
Since, the offerree fails to fulfill the condition, offer is automatically revoked.
Revocation :
Section 6 of CA: (d) Death or mental disorder of the proposer;
Example
the offer only revoked if the offeree aware the facts that before he makes acceptance , the offeror is death/mental disorder. The acceptance without prior knowledge of the death or mental disorder of the proposer is a good acceptance. acceptance is valid and binding.
Bradbury v Mogan
Court laid down the principle:
The death of the offeror WILL NOT TERMINATE the offer if the acceptance is made in IGNORANCE of his death.
Note: This Notes and Copyright therein is the property of Madam Norazla Abdul Wahab and is prepared for the benefit of her students enrolled in the MGM 3351 course for their individual study. Any other use or reproduction by any person WITHOUT CONSENT IS 86 PROHIBITED.