(1) Contract Offer

LAW OF

CONTRACT

PREPARED BY:

•

Agreement between 2 or more parties

that legally binding between them.

• Essential Elements of the Contract: 1. Offer & Acceptance

2. Consideration

3. Intention to create legal relation 4. Certainty

5. Legal capacity 6. Free Consent 7. Legality of the Objects

Offer

Definition s2(a) CA

Communication of offer

s. 4 (1) of CA

ITT

• An offer is a proposal

• Once it is accepted, it creates a legally binding agreement • A person who makes an offer is called an offeror or promisor

Definition of an offer

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

Definition of an offer

A, by offering to buy B’s car for RM

20,000 in the hope that B will accept

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

.

To Whom Offer can be made ?

1) Specific

1) Specific



Addressed to specific person



_{Only the addressee may accept the}

offer



_{Who is not addressee, cannot make}

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

• Held:

• D was not liable to pay for the goods.

• No contract between the P and the D. Because the P had no right to accept the

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

Carlill v Carbolic Smoke Ball

 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

 The court held that:

Condition of an offer

•

1. certain

•

1. certain

•

Guthing v Lynn (1831)

•

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.

•

2. communicated

•

S. 2 (a)

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

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).

R v Clarke

DISTINCTION BETWEEN

OFFER & INVITATION TO

ITT

•

Can’t form a contract

•

Thus,

NO BINDING

•

It merely invitation from 1 party to

another party to make an offer.

•

No element of offer as S.2(a)

a. Advertisement

Harris v Nickerson (1873)

The D advertised a sale of certain goods including certain office accessories of a certain date at a

particular place.

The P then travelled to the said location and he discovered that the office accessories had been

Harris v Nickerson (1873)

The P sought damages because the D had breached the contract based on the argument that the advertisement

was an offer and his presence at the sale was an acceptance.

Court :

However,

Coelho v The Public Services Commission

[ 1964] MLJ 12

The R advertised in the Malay Mail inviting applications for the post of an assistant Passport Officer. (ITT)

The applicant made an application and was subsequently accepted for permanent post and letter of appointment is given based on the unconditional condition.

Coelho v The Public Services Commission [ 1964] MLJ 12

Subsequently, the R tried to terminate the A based on the reason that the A was appointed on

probation.

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

 _{Thus, there was a valid contract of employment.}  _{The termination of the applicant on probation is}

However,

Coelho v The Public Services Commission

[ 1964] MLJ 12

The R advertised in the Malay Mail inviting applications for the post of an assistant Passport Officer. {ITT}

The applicant made an application { offer} and was subsequently accepted for permanent post { acceptance} and letter of appointment is given based on the unconditional condition.

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..

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

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.

Fisher v Bell

•

The court held that

•

displaying the knife was merely an ITT,

not an offer

Pharmaceutical Society of Great

Britain v Boots Cash Chemist.

• The D displayed a poison drugs on the shelves of self service system. Customers selected their purchases from the shelves, put them into basket and took them to the cashier desk.

• However, the selling of poison drugs by using the above method is contravened the law.

Pharmaceutical Society of Great

Britain v Boots Cash Chemist.

• Argument was made.

Issue: whether Contract is complete at the moment customer took an article from the

Pharmaceutical Society of Great

Britain v Boots Cash Chemist.

• COA laid down the principle:

• Sale /contract complete at the cashier desk (when the payment has been made/the

cashier scan )

Pharmaceutical Society of Great

Britain v Boots Cash Chemist.

• COA laid down the principle:

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

C. Tender

• A tender is only ITT.

• X invites a supplier to tender a quotation for goods or services.

C. Tender

• An offer is actually made by the supplier to X. • A person who make a notice of

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.

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.

Spencer v Harding

•

The Court:

• HOWEVER…

• It is different if stated that “ the highest bid/low quotation will be definitely be

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.

D. Auction

• Acceptance to the offer by the auctioneer is by knock of hammer

E. Price List/ Quotation

• Not an offer= only ITT.

E. Price List/ Quotation

• Given opportunity to the buyers to choose the best price.

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.

•

_{The Court laid down the principles:}

• _{The quotation were only supply of information} which was an invitation to the A to make an

offer /ITT in order to get the R’s service.

•

Explanation :

The printing orders made by the A=Offer which was subject to the acceptance by the R.

Date of order { offer}

• 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

REVOCATION OF OFFER

A proposal, once

communicated, remains

open

until it is withdrawn,

cancelled, retracted or

REVOCATION OF OFFER

• S.5(1) of the CA :

“ a proposal may be revoked at any time before the communication of its

Communication of Acceptance

s. 4(2) of the Contracts Act 1950

(a) against the OFFEROR : put in the course of transmission to him.

Communication of Acceptance

• Illustration (b) of s4 stated :

– B accepts A’s proposal by a letter sent by post. The communication of the

acceptance is complete as against A, when the letter is posted.

REVOCATION OF OFFER

• S.5(1) of the CA :

“ a proposal may be revoked at any time before the acceptor send letter of

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

HOW Revocation can be made

Section 6 of CA: A Proposal is revoked:

(a)Communication of notice of revocation by the proposer to the acceptor;

(b)Lapse of time prescribed in the proposal or if no time prescribed, by of lapse of a reasonable

time;

(c)Failure of the acceptor fulfill a condition of an acceptance;

how Revocation can be made – S6

By communication of

notice of revocation (a)

Lapse of the time Prescribed (b)

(Ramsgate’s Case)

Failure of the acceptor to fulfil the condition (c ) Death, mental

Revocation :

Section 6 of CA:

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)

 Section 4(3)(b) of CA:

on the part of the offeree when it comes to his

Byrne v Van Tienhoven

(1880) 5 CPD 344

• The D offered to sell 1000 boxes of tinplate to the P.

• 1/10= D posted a LO from Cardiff to the P in New York

• 8/10= D posted a LOR to the P revoking the offer

Byrne v Van Tienhoven

(1880) 5 CPD 344

• 15/10= P sent again the LOA to reconfirm his acceptance that made on 11/10

Byrne v Van Tienhoven

(1880) 5 CPD 344

The court held:

There was a contract.

Revocation of offer posted on 8/10 was not effective till 20/10 ( when the P received

the said LORO)

Byrne v Van Tienhoven

(1880) 5 CPD 344

The court held:

There was a contract.

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

Example:

 A offers by letter to sell a house to B. The

communication of offer complete when B receives the letter.

 A then revokes his offer by telegram.(S.6(a) of CA.

 The revocation is complete (S. 4(3)(a) (b) of CA.

 on the part of A when the telegram is

despatched.

Revocation :

Section 6 of CA:

(b) Lapse of time prescribed in the proposal or if no time prescribed, by of lapse of a reasonable

Macon Works & Trading Sdn Bhd v

Phang Hon Chin (1976) 2 MLJ 177



Court laid down the principles:



An offer lapses after a reasonable time.

Failure to accept the offer within

Ramsgate Victoria Hotel Co v

Montefiore (1866)LR Ex Ch 109



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.

Ramsgate Victoria Hotel Co v

Montefiore (1866)LR Ex Ch 109



The court held:

that there was no valid binding contract

bacause acceptance was not made within

Revocation :

Section 6 of CA:

Example:

A company offers to employ Iskandar

on condition that he passes a skill test.

If the applicant fails the test, the

Financing Ltd v Stimson

The D offered to buy a car from P’

company if the car remain in the same

conditions.

However, before the D accepted the

offer, the said car was stolen and was

Financing Ltd v Stimson

The court held:

The D’s 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

Revocation :

Section 6 of CA:

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.

Bradbury v Mogan

 Court laid down the principle:

The death of the offeror WILL NOT

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