1. PUAN YUHANZA BINTI OTHMAN
LAW OF CONTRACT
OFFER
BY :
PUAN YUHANZA BINTI OTHMAN
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2. CONTENTS Elements Discharge Remedies Offer Acceptance Consideration
Capacity
Intention
Certainty
Free consent
Lawful object
PERFORMANCE
AGREEMENT
FRUSTRATION
BREACH
RESCISSION
DAMAGES
SPECIFIC PERFORMANCE
INJUNCTION
QUANTUM MERUIT
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3. CONTRACT = AGREEMENT WHAT IS CONTRACT?
GH Treital
An agreement which is either enforced by the law or recognized by law as affecting the legal rights or duties of the parties
SECTION 2(H) of the Contract Act 1950
an agreement enforceable by law is a contract
Not all agreements are contract but all contracts are agreement
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4. ELEMENT OF CONTRACT PROPOSAL (OFFER) ACCEPTANCE CONSIDERATION
LEGAL CAPACITY
INTENTION TO CREATE LEGAL RELATION
CERTAINTY
FREE CONSENT
LAWFUL OBJECT
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5. INTENTION TO CREATE LEGAL RELATION
CONTRACT
OFFER +
ACCEPTANCE =
CONSIDERATION
LEGAL CAPACITY
INTENTION TO CREATE LEGAL RELATION
CERTAINTY
FREE CONSENT
LAWFUL OBJECT
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6. Condiiton
Definition
OFFER
Revocation
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7. PROPOSAL/OFFER Auth: Sec. 2(a) CA 1950 one person signifies
willingness to do or abstain from doing
with a view to obtaining assent of that other
An offer is a promise by a person to another person with the INTENTION to create a LEGALLY BINDING RELATIONSHIP
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8. HOW A PROPOSAL CAN BE MADE?
SECTION 9 CA 1950
So far as the proposal or acceptance of any promise is made in
words, the promise is said to be express. So far as the proposal or
acceptance is made otherwise than in words, the promise is said to
be implied.
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9. To whom a proposal can be made?
One person
(specific offer)
To the world at large
(general offer)
BOULTON v JONES
CARLILL v CARBOLIC SMOKE BALL CO.
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10. Boulton had taken over the business of one Broklehurst.
BOULTON v JONES
Boulton had taken over the business of one Broklehurst.
Jones sent an order for goods to Broklehurst. Jones had no knowledge that the business had changed hands.
Boulton supplied the good to Jones. Jones refused to pay because the good was not from Brocklehurst. Boulton sued Jones for the price.
Court held that: Jones is not liable to pay for the good because he intends to make a contract only with Brocklehurst not Boulton.
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11. CARLILL v CARBOLIC SMOKE BALL CO
The Defendant (Df) manufactured a smoke ball and published advertisement at the time of influenza epidemic that their smoke ball could cure all kinds of ailments. And stated that, anyone who bought one of their smoke ball, used it as directed and still suffer from influenza would be paid l100.
Plaintiff(pf) bought the smoke ball but still had influenza. She claimed l100 from df.
The df argued that, there was no contract because the advertisement was an invitation to treat not an offer.
The court held that: it was an offer addressed to public at large which could be accepted by anyone who fulfills the conditions attached o the offer.
From this case:
An advertisement to give reward for the return of lost goods would be considered as an offer to public at large.
it was an offer addressed to public at large which could be accepted by anyone who fulfills the conditions attached o the offer
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12. CONDITION OF AN OFFER Clear communicated Acceptor must aware
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13. CLEAR clear = final, definite GUTHING v LYNN
Lynn offered to buy a horse from Guthing on condition that if the horse brings luck to him, he will pay another L50
A dispute arose and the issue is whether there was a valid offer.
The court held that, the offer was not final and complete and hence, it was not valid.
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14. An proposal must come to the knowledge of the acceptor.
COMMUNICATED
S.2(a), when one person signifies to another his willingness
S.4. (1) The communication of a proposal is complete when it comes to the knowledge of the person to whom it is made
An proposal must come to the knowledge of the acceptor.
TAYLOR v LAIRD
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15. T quit but helped to work at the vessel home without L’s knowledge
TAYLOR v LAIRD
T was engaged to command L’s Ship and to conduct certain explorers on an expedition up to River Niger.
T quit but helped to work at the vessel home without L’s knowledge
T claimed to be paid for the service rendered.
The court held that, he cannot recover as his offer to work at the vessel home was not communicated to L, thus it would not amount to a contract between T and L.
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16. ACCEPTOR MUST AWARE R v CLARKE
The Australian Government made an offer to pay a reward for any information leading to the arrest and conviction of persons responsible for the murder of 2 police officers.
Mr.A and Mr. Clerk were arrested for the crime. Clerk without knowledge of the reward, gave an information which led to the arrest of Mr.B.
Clerk was released as he was not guilty for the offence.
Clerk then found that, there was a reward from Australian Government and claimed the reward.
The court held that, Clerk failed to claim because at the time he gave the information, the reward was not present in his mind, he gave the information only to release himself not because of the reward. He was not aware of the reawrd.
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17. INVITATION TO TREAT RULE FOR ITT COURT GUIDELINE DEFINITION
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18. INVITATION TO TREAT
DEFINITION
Preliminary communications, negotiations, invitation to make an offer.
Must differentiate offer from invitation to treat because response to invitation to treat would not form a binding contract
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19. RULEs FOR ITT
The offeree merely invites the readers to respond with an offer
When a person respond to ITT, that person make an offer
It is entirely up to the offeree whether to accept or to reject the offer made by the public.
If the offeree accept there will be a contract between the offeree and the offeror. If not, there will be no contract between them.
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20. DISPLAY OF GOODS IN A SELF SERVICE SHOP
ADVERTISEMENT
DISPLAY OF GOODS IN A SELF SERVICE SHOP
EXAMPLE OF INVITATION TO TREAT
QUOTATION
TENDER
AUCTION SALE
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21. ADVERTISEMENT
RULE
The advertiser merely invites the readers to respond with an offer
When a person respond to ITT, that person make an offer
It is entirely up to the advertiser whether to accept or to reject the offer made by the public.
If the advertiser accept the offer the contract is concluded
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22. ADVERTISEMENT PLACES AN ADVERTISER ADVERTISEMENT
ADVERTISER IS NOT MAKING
AN OFFER
PERSON WHO
RESPONDS TO
ADVERTISEMENT
IS MAKING AN OFFER
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23. RELEVANT CASES HARRIS v NICKERSON PARTRIDGE v CRITTENDEN EXCEPTION
READER RESPONSE TO ADVERTISEMENT
AND WAS ACCEPTED = CONTRACT
COELHO v PUBLIC SERVICES COMMISSION
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24. The Pf sued the Df to claim damages.
HARRIS v NICKERSON
Df made an advertisement for a sale of certain goods at a particular place.
The Pf. Traveled to the location specified and discovered that the goods had been withdrawn from the sale.
The Pf sued the Df to claim damages.
The court held that, the advertisement was not an offer but it was only ITT.
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25. CONTINUE…. EXCEPTION:-
Anyone who fulfils the conditions in the advertisement = contract
CARLILL v CARBOLIC SMOKE BALL CO
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26. DISPLAY OF GOODS IN A SELF-SERVICE SHOP WITH PRICE TAGS ON
Legal aspect: not amount to an offer
The shop owner is making an ITT
The shop owner invites customers to make an offer for him
The offer comes from the customer
If the shop owner/cashier accept the aoffer made by the customer= contract
Pharmaceutical Society of Great Britain v Boots Cash Chemist (1953)
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27. NOTICE OF TENDER INVITATION TO TREAT Co or organization = & NOT OFFER
put work out to tender =
CASE : SPENCER v HARDING
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28. PRICE LIST / QUOTATION
EARLY INFORMATION WHICH INVITES PROSPECTIVE BUYERS TO MAKE AN OFFER
HARVEY v FACEY
PRESTON CORPORATION SDN BHD v EDWARD LEONG
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29. AUCTION
AUCTIONEER (HE IS NOT MAKING AN OFFER BUT AN INVITATION TO TREAT)
OFFER
IS MADE
BY THE
BIDDER(S)
AUCTIONEER IS FREE TO ACCEPT
OR REJECT THE OFFER MADE BY
THE BIDDER
The auctioneer is deemed to make an acceptance at the fall of the hammer
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30. Specific offer and general offer Acceptor aware
Clear
Condition
Sect. 2(a)
Introduction
Communicated s.4(1)
Specific offer and general offer
Acceptor aware
Sect. 5(1)
Revocation
Rule of ITT
ITT
Effective revocation sect.4(3)(a) &(b)
Types of revocation
Guideline
Advertisement
Display of goods
Tender
Quotation
auction
Notice
Lapse of time
Not fulfill condition
Unsound mind/death
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31. Acceptance
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32. Exceptions to communication
Condition
Definition
Acceptance
Exceptions to communication
Revocation
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33. ACCEPTANCE
Key words in section 2(b) : when the person to whom the offer was made signifies his assent thereto
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34. Conditions for acceptance to be valid
Section 7 (a)
Acceptance must be absolute & unqualified
Absolute = acceptance in totality, accept the whole offer
Unqualified = no restrictions, no conditions attached to the acceptance
No counter-offer
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35. COUNTER-OFFER
When the offeree responds with another offer or when the offeree changes the nature of the offer
E.g. ask for reduction of price, introduce new terms which change the offer or which are not included in the offer
Effect : original offer is destroyed & no contract is created
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36. NO ACCEPTANCE BY OFFEREE
Hyde v Wrench A
FARM
£1,000
OFFEREE
OFFEROR
OFFER
£950
Lah..
SOLD TO ANOTHER
NOT ACCEPTANCE
- COUNTER OFFER
NO ACCEPTANCE BY OFFEREE
NO CONTRACT CREATED
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37. DISTINGUISH THESE CASES :
STEVENSON JACQUES & CO v MCLEAN
Mere inquiry / request for further information is not a counter-offer
JONES v DANIEL
Introducing terms which are not in the contract = counter-offer
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38. X contract. Counter offer Sell :RM15 Buy :RM 10 with a condition
ACCEPTANCE
REMARKS
Sell: RM15
Buy :RM15
contract
Buy : RM10
X contract. Counter offer
Sell :RM15
Buy :RM 10 with a condition
Buy:RM10
The seller agreed with RM10.
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39. HOW AND WHEN AN ACCEPTANCE CAN BE MADE S. 7(b) CA 1950
Acceptance must be expressed in some usual and reasonable manner unless the proposal prescribes the manner in which it is be accepted…
Concern with: mode of acceptance & time of acceptance
If a particular mode of acceptance is prescribed + the Offeree must follow
If not prescribed + use a usual and reasonable manner depending on the case
ELIASON v HENSHAW
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40. CONTINUE….
Offer + prescribed mode of acceptance and Offeree not follow the mode but the Offeror accept the acceptance = contract
WESTERN ELECTRIC v WELSH DEVELOPMENT A
If there is prescribed time = Offeror must accept within
the time limit
If no time prescribed = must be reasonable time
FRASER v EVERETT
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41. COMMUNICATION OF ACCEPTANCE:
GENERAL RULE:
Acceptance must be communicated
Section 2(b) = “signifies”
The Offeror must known of the acceptance
receives information of the acceptance
Mere intention to accept = not contract
Silence does not amount to an acceptance
FRASER v EVERETT
POWEL v LEE
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42. Pf applied for post of headmaster of a school.
POWEL v LEE
Pf applied for post of headmaster of a school.
The board of managers passed a resolution selecting the pf for the post. The resolution was not communicated to the pf .
The manager acting under his individual capacity informed the pf regarding the appointment. but the pf did not receive any appointment letter.
Court held that: no contract in the absence of authorized communication of acceptance
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43. EXCEPTIONS RECIPROCAL PROMISES ACCEPTANCE BY POST OFFEROR SAYS NO NEED
ALLOWS
OFFEREE
TO FULFILL
CONDITIONS
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44. EXCEPTIONS OFFEROR SAYS NO NEED OFFEROR ALLOWS OFFEREE TO FULFILL
CONDITIONS
ACCEPTANCE
BY POST
RECIPROCAL
PROMISES
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45. Postal Rule Section Offer Sect.2(a)
When one person signifies his willingness
Communication of offer
(offer is effective/complete…)
Sect.4(1)
When offer come to the knowledge of an acceptor
Acceptance
Sect.2(b)
When one person accept the offer
Communication of acceptance (effective./complete.)
Sect.4(20(a)(b)
When the acceptor post letter of acceptance
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46. ENTORES v MILES FAR EAST CORPORATION
The court held that: when the contract is made by post, the acceptance is complete as soon as the letter is put into the post box.
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47. pf sent an acceptance by registered post Pf must accept the offer
IGNATIUS v BELL
The df offered to sell his land to the pf on the condition that the acceptance must be made on or before 20/8/1912
16/8/1912
20/8/1912
25/8/1912
pf sent an acceptance by registered post
Pf must accept the offer
Df received letter of acceptance from pf
The court held that: the acceptance was complete when the pf post on 16/8/1912. there was a contract between pf and df.
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48. Revocation of acceptance
Postal Rule
Offer
Sect.2(a)
Sect.5(2)
Sect.4(1)
Revocation of acceptance
Revocation of offer
Sect.4(3)(a)(b)
Sect.5(1)
Sect.4(3)(a)(b)
acceptance
Sect.2(b)
Sect.4(2)(a)(b)
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49. REPRESENTATIVE ACTING ON HIS BEHALF
REVOCATION OF OFFER
WHO CAN REVOKE
REPRESENTATIVE ACTING ON HIS BEHALF
OFFEROR
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50. WHEN CAN OFFER BE REVOKED?
S. 5(1) a proposal may be revoked at any time
Before the communication of its acceptance is complete as against the proposer but not afterwards…
PAYNE v CAVE
Df made the highest bid for the pf’s good at an aution sale but revoked his bid before the fall of the hammer.
The court held that: the offer could be revoked at any time before the fall of hammer. The revocation was effective.
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51. HOW AN OFER CAN BE REVOKED?
BY NOTICE
WHICH MUST BE
COMMUNICATED
s. 6(a)
LAPSE OF
TIME
S. 6(b)
OFFEREE
DOES NOT
FULFILL
CONDITIONS
S. 6(c)
FRASER v EVERETT
PYM v CAMPBELL
BYRNE v VAN TIENHOVEN
OFFEROR
DIES OR
BECOMES
INSANE
S. 6(d)
BRADBURY v MORGAN
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52. BY NOTICE 6. A proposal is revoked—
(a) by the communication of notice of revocation by the proposer to the other party;
5. (1) A proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards
(3) The communication of a revocation is complete—
(a) as against the person who makes it, when it is put into a course of transmission to the person to whom it is made, so as to be out of the power of the person who makes it; and
(b) as against the person to whom it is made, when it comes to his knowledge
BYRNE CO v VAN TIENHOVEN & CO
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53. BYRNE CO.v VAN TIENHOVEN
1/10
8/10
11/10
20/10
Df post letter of offer to pf in New York
Df post a letter revoking the offer
Pf received the letter of offer and sent letter of acceptance
Pf received the df’s letter of revoaction of offer
The court held that: there was a contract between df and pf. The revocation of offer was not effective since the contract was created on 11/10 because the pf had already accepted the offer on 11/10
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54. LAPSE OF TIME S. 6(b)
An offer may expire by lapse of time in 2 situation :
by the lapse of the time prescribed in the proposal for its acceptance, or,
if no time is so prescribed, by the lapse of a reasonable time, without communication of the acceptance;
FRASER v EVERETT
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55. OFFEREE DOES NOT FULFILL CONDITIONS S. 6(c)
(c) by the failure of the acceptor to fulfill a condition precedent to acceptance;
PYM v CAMPBELL
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56. OFFEROR DIES OR BECOMES INSANE S. 6(d)
(d) by the death or mental disorder of the proposer, if the fact of his death or mental disorder comes to the knowledge of the acceptor before acceptance.
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57. REVOCATION OF ACCEPTANCE
Section 5(2) : “…at any time before the communication of the acceptance is complete as against the acceptor…”
Section 4(3) (a) & (b) – revocation of acceptance must be communicated & it is effective when offeror gets knowledge of acceptance
DUNMORE v ALEXANDER
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