Documente Academic
Documente Profesional
Documente Cultură
What is a contract?
2 elements :
1) There must be agreement
Important !!!!
Valid agreement s. 2(e)
Offer s. 2(a)
Acceptance s. 2(b)
Certainty of terms s. 30
Considerations - s. 2(d), s. 26
Intention to create legal relations
Capacities of parties s. 11 & 12
Formalities
Example :
When a person puts an item for auction with
express provision that he will sell the item to
whomever places the highest bid, his
conduct is offer to sell.
When a person takes an item from a shops
shelf, puts it in the shopping basket before
presenting it for payment at the cashier, it is
said that by his conduct the person is making
an offer.
1. Bilateral Offer
- made to a specific person or group of
persons.
2. Unilateral Offer
- made to the world at large.
Argument:
- The advertisement was a mere sales puff
rather than an offer, there was no valid offer
as a contract cannot be made to the whole
world ; and the advertisement was too vague
to be an offer.
Held :
- The offer was a valid offer of unilateral
contract. The offer stipulated that
acceptance could be made by anyone who
used a smoke ball properly and yet the
person caught flu.
Some circumstances :
1. Display of Goods in Shops
Fisher v. Bell [1961] 1 QB 394
-- The D was found not guilty of the criminal
offence of offering the knife for sale merely
by displaying a flick knife in his shop window.
-- Lord Parker :
the display of an article with a price on it
in a shop window is merely an invitation to
treat. It is in no sense an offer for the sale
the acceptance of which constitutes a
contract.
Argument :
The sale was completed the moment any buyer
put any goods they picked into their baskets.
Held :
The Court reject the argument and held that
the display of goods on supermarket shelves
amounted to an invitation to treat rather
than an offer to sell. The mere fact that the
customer picks up a bottle of medicine from
the shelves in this case does not amount to
an acceptance of an offer to sell.
It is an offer by the customer to buy and no
sale is effected until the buyers offer to buy
is accepted by the acceptance of the price.
3. Auction
- Generally, any calls for bids are merely
invitation to treat. When A places his bid, he
is regarded as making an offer and hence the
auctioneer is free to accept or reject.
-
4. Tenders
- Usually presumed as mere invitations to
treat.
- Case : Spencer v. Harding (1870) LR 5 CP 561
- Held :
- an announcement inviting tenders is not
normally an offer; unless accompanied by
words indicating that the highest or lowest
tender will be accepted, it is a mere attempt
to ascertain whether an acceptable offer can
be obtained.
5. Reply to enquiry
- An offer, being a proposal is transformed into
a binding promise once it is accepted.
- However, when a person supplies an answer
to any enquiry, there is no presumption that
in supplying the answer the person has the
intention to be bound by his word.
Case:
Preston Corp. Sdn. Bhd. V. Edsward Leong &
Ors [1982] MLJ 22
- Fed Ct of Malaysia applied this principle,
holding that when the appellants placed
printing orders based on the quotations
supplied by the respondents, the conduct
was merely a supply of information, which in
nature was merely an invitation to treat.
Cross-offers.
The offeree must know about the proposal
before he can accept it.
Case : Tinn v. Hoffman & Co. (1873)
Facts :
On 28/11/1871, the D wrote to the P
offering to sell him 800 tons of iron at 69s.
Per ton, together with a further quantity at
the same price. On the same day, the P
wrote to the D offering to buy 800 tons at
69s., together with a further quantity at a
lower price. The letters crossed in the post.
The P contended that there was, at all
events, a good contract for 800 tons at 69s.
Per ton.
Facts :
The P was engaged to command the Ds ship
and to conduct explorers upon an expedition
up the River Niger. He threw up his command
in the course of the expedition, but helped
to work the vessel home, though without the
knowledge of the D. He then claimed to be
remunerated for the services thus rendered.
Held :
The offer was effectively revoked when the
offeree was informed by a 3rd party that the
property, which was initially offered for sale
to him, was sold to another few days before
the offer lapsed.
Facts :
The D had allowed 2 weeks option period to
the P upon receiving the payment of RM300
from the P. The P had exercised the option
by sending a letter accepting the offer
coupled with the cheque for the payment of
10% of the purchase price being deposit for
the contract. Despite this, the D refused to
proceed with the agreement.
Held :
Since the option was exercised within the
stipulated period and the conditions required
were met, the offeror by her promise.
-- meaning that the offeror cannot sell the
property until expiration of option period.
Held :
Ps action for specific performance failed as
it was found that there was no valid contract
as the counter offer amounted to rejection
of the offer. The rejection terminated the
offer and therefore the P could not accept an
offer which was no longer in existence.