Question 16.

Issue

1) Whether there is acceptance from Ananta regarding the counter offer from Param to buy the
bookstore for RM90.000?

2) Whether Param can sue Ananta?

3) Whether there is a binding contract between Ananta and Param?

Law

DEFINITION : Section 2 (b) of the Contracts Act 1950 provides:

"when the person to whom the proposal is made signifies his assent thereto, the proposal is
said to be accepted; a proposal, when accepted, becomes a promise."

Illustration :
A offers to sell his car to B for RM50.000.
B agrees to buy it for that price. This is an acceptance.
A contract is therefore binding between them.

CONDITIONS / REQUIREMENTS OF A VALID ACCEPTANCE

1) Acceptance Must Be 'Absolute & Unqualified'.

- Section 7 (a) of the Contracts Act 1950 provides:
..the acceptance must...be absolute and unqualified"
HYDE V WRENCH (1840)

Exceptions
Under certain circumstances, even though there was a modification or further negotiations on
the original offer, a contract may still exist and binding upon the parties.

Illustration:
A offers to sell his car to B for RM50,000.
B agrees to buy the car, but for RM45,000
A then agrees to sell the car with that new price (RM45,000).

2) Acceptance Must Be Communicated In Some 'Usual & Reasonable

Manner'.
- Section 7(b) provides :
...the acceptance must...be expressed in some usual and reasonable manner, unless the
proposal prescribes the manner in which it is to be accepted…
ELIASON V HENSHAW(1819)
Application

1) There is no valid acceptance by Ananta for the counter offer by Param to buy the
bookstore since the line was cut-off and Ananta did not make any further calls.
2) Param cannot sue Ananta if Ananta refuses to sell the bookstore because they had no
agreement. There is no communication between them.
3) There is no binding contract between Ananta and Param.

Conclusion

To conclude, acceptance only happens when there is communication between both parties.
Question 9
Issue
1)Whether the price tag of the DVD that cost RM15 saw by Lily at Topwell Shopping Centre can
be considered as valid offer ?
2)Whether Lily can sue Topwell Shopping Centre?
3)Whether there is a binding contract between them
Law

A. DEFINITION
Section 2 (a) of the Contracts Act 1950 provides:
"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...he is said to make a proposal."
According to the above section, when a person promises or proposes something to another
party with the intention that his promise / proposal would be accepted by that other party, he is
said to make an offer.
The person who makes an offer is called as an offeror / promisor / proposer. The offeror /
promisor makes the offer with the intention to create a legal binding contract with the other party
(i.e. offeree / promisee / acceptor).
Illustration:
A ask B, "B, do you want to by my car for RM50,000?"
In this situation, when A ask B whether B wants to buy his car for that price, it means that A is
proposing / offering to sell his car to B, with the intention that B will agree to his proposal. A is
the offeror.

E. OFFER DISTINGUISHED FROM INVITATION TO TREAT

An offer must be distinguished from invitation to treat in order to ascertain when the actual offer
takes place. An offer is different from an invitation to treat.
If a person does something with the intention to make an offer, then such act may bind the
offeror if there is an acceptance by another person to such offer.
However. if a person does something with the intention to make an invitation to treat, then
anything done by another person in response to such invitation to treat is only an offer. Thus
there is no binding contract yet until there is an acceptance to such offer.

Definition of Invitation to Treat

An invitation to treat is a sort of preliminary communication, which passes between the parties
at the stage of negotiation" that might lead to an offer. It is merely an invitation from one party to
another party to make an offer. It is an early stage before an offer could be made.

2) Display of Goods in a Self-service Shop.

The act of the seller displaying the goods with the price tags, in a self-service shop is only an
invitation to treat. The customer would make the offer when he selected the desired goods and
bring them to the counter for payment.
When the customer brings the goods to the counter for payment, at that point of time the
customer is actually making an offer to buy according to the price that was tagged on the goods.
The customer / the buyer is the offeror.
The seller / the cashier (offeree) at the counter will make the acceptance by accepting the
money of the customer in agreement to sell the goods to the buyer.
Due to this principle, even though the goods displayed been tagged or marked at a certain
price, the seller is not bound to sell at that particular price to the customer.
The price is subject to changes due to the rule that it is only an invitation to treat.
Sometimes, the seller is not bound to sell it at all to the customer. It is up to the seller whether to
accept or not the offer made by the customer. If the seller accepted the offer of the customer,
then only the contract is binding.
On the other hand, so long as the seller has not made any acceptance to the customer's offer,
the customer is not bound to the contract yet. The customer can withdraw his offer at any time
before the seller makes his acceptance.
Therefore, the customer is not bound to pay if he withdrew his offer right after he been informed
about the difference / change of the price by the cashier / the seller.
However, the withdrawal of the offer should be done before the cashier make the acceptance
(i.e. before the payment is accepted).

PHARMACEUTICAL SOCIETY OF GREAT BRITAIN

V
BOOTS CASH CHEMIST LTD (1953)
The issue in this case is whether the display of goods with the price tags in a self-service shop
is an offer or an invitation to treat.
Held: The display of goods was only an invitation to treat. An offer is made when the customer
placed the articles into the basket and brings them to the counter for payment. Acceptance
would only be made when the cashier or the shop owner accepted the payment made by the
customer. So long as the cashier did not accept the payment, there is no contract yet.
FISHER V BELL (1960)
Held: Display of several kinds of flick-knives in a glass shop window is not an offer but only an
invitation to the customers to make an offer to buy.
Whether the offer is to be accepted or not, it depends on the discretion of the shop owner.

Application

1) the price tag of the DVD that cost RM15 saw by Lily at Topwell Shopping Centre cannot be
considered as valid offer. The displayed goods of a self-service shop only a invitation to treat.
2)Whether Lily cannot sue Topwell Shopping Centre for the price tag of rm15 of the original dvd.
3)there is no binding contract between them.

Conclusion
To conclude, we as a consumer must always double check if we want to buy something. We can
just ask before buying anything in order to get the best item at the best price.
Question 6

ISSUES :

1.Whether the call made by Putri Comel to withdraw her proposal to sell the boutique in Bandar Indera at
price of RM200,000 to Tengku Wira can be considered as an effective revocation of offer or not?
2.Whether Tengku Wira can sue Putri Comel if she refused to sell him the boutique in Bandar Indera at
price of RM 200,000?
3.Whether there is binding contract between Putri Comel and Tengku Wira?

LAW :

- Section 5(1) of the Contracts Act 1950

- PAYNE V CAVE (1789)

- ROUTLEDGE V GRANT (1828)

- By communication of notice of revocation

- Section 6(a) of the Act

- Sections 4(3)(a) and (b) of the Act

- Illustration (c) to section 4

- Revocation of offer under the postal rule

- Illustration to Section 5 of the Act

- BRYNE & CO V VAN TIENHOVEN & CO (1880)

- HENTHORN V FRASER (1892)

APPLICATION :

1.The call made by Putri Comel to withdraw her proposal to sell the boutique in Bandar Indera at price of
RM200,000 to Tengku Wira cannot be considered as an effective revocation of offer because Tengku Wira
had already posted his letter of acceptance of offer before Puteri Comel made a call for revocation of
offer. 2.Tengku
Wira can sue Putri Comel if she refused to sell him the boutique in Bandar Indera at RM 200,000 because
there is binding contract between them. 3.There is a
binding contract between Tengku Wira and Putri Comel once Tengku Wira had posted the letter of
acceptance on 13th June.

CONCLUSION :

To sum up, the revocation will be valid at anytime as long as the revocation has been made before the
offeree made a acceptance of offer