Question 1

Issue:

Whether Michael can revoke the offer made by Joey by making the revocation of the
acceptance by telephoned before the letter of acceptance reaches Joey.

Law:

According to the section 2(a) of Contracts Act 1950 defines that when one person
(offeror) indicates to another person (offeree) his or her willingness to abstain from doing
anything, and hope that to obtain the consent of that other to the act or abstinence, he or she is
said to make a proposal (Coursehero 2015). Based on section 2(b) Contracts Act 1950 defines
that the proposal only can be a valid contract when the acceptance from offeree must deliver
to the offeror (Coursehero 2015). As the same time, according to the Section 2 (a) & (b) of CA
1950, an offer was a signification of willingness for an individual to become binding with
another party when acceptance is present (Lawteacher 2017). Section 9 Contracts Act 1950
states that if the acceptance is expressed when it made in words while the acceptance is implied
when it is made by other than in words (Coursehero 2015). Moreover, promisor is the person
who makes the proposal while promisee is the person who accepts the proposal according t
to section 2(c) Contracts Act 1950. If a person who makes an offer is known as an offeror while
a person to whom an offer is made is known as an offeree (MacIntyre 2011).

Acceptance of an offer means unconditional agreement to all the terms of that offer
(Elliott & Quinn 2009). Acceptance can be oral form or in writing, but in some cases an offeree
may accept an offer by doing something, such as delivering goods in response to an offer to
buy (Elliott & Quinn 2009). In addition, Section 5(2) Contracts Act 1950 states that revocation
of acceptance can happen at any time before the communication of acceptance is completed
against the acceptor but not afterwards (Lawteacher 2017).

Apart from that, Section 4(1) Contracts Act 1950 described that when it comes to the
knowledge of the person who making it, the communication of the proposal is complete
(Coursehero 2017). Based on section 4(2) (a) Contracts Act 1950 defines that the
communication of an acceptance is complete as against the proposer, when it is put in a course
of transmission to him, so as to be out of the power of the acceptor. The postal rule was
prescribe in the case of Adams v Lindsell in the year 1818. On 2 September, the defendant sent
a letter to the plaintiff offering for the sale of some wool and added to ask for a reply which

1
put 'in the course of post'. However, the letter has been postponed. The plaintiff issued a letter
of acceptance on the same day after receiving the letter. However, due to delays, the defendant
assumed that the plaintiff was not interested in wool and sold it to a third party. The plaintiffs
sued for breach of contract. The court held that the acceptance has been completed upon posting
and there was a valid contract between the parties involved (Casebrief 2013).

According to the section 4(2) (b) Contracts Act 1950 provide that acceptance shall be
communicated by other means than post or telegram (Scribd 2011). For acceptance by other
means than post or telegram, it is considered complete against the proposer if the acceptance
comes to the knowledge of the proposer. This principle is applicable for acceptance made in
any means agreeable by both parties in the contract. Section 4(3) CA 1950 states that the
revocation of acceptance must be communicated to the offeror. This is illustrated in the
illustration (d) of section 4 CA 1950 where B revokes his acceptance by telegram. Bs
revocation is complete as against B when the telegram is despatched and as against A when it
reaches him (Lawnotes 2017).

Application:

Based on the case, Joey is the offeror and Michael is the offeree. On 7th November 2016,
Joey signifies her willingness to sell his car for RM 80,000.00 by wrote a letter to Michael. On
15th November, the offer letter has come to the knowledge of Michael which fulfilled under
section 4(1) Contracts Act 1950. Then, he signifies his acceptance by letter to Joey which
fulfilled under section 9 Contracts Act 1950. When the letter was posted, the offeree (Michael)
had put it in the course of transmission process. According to the section 4(2) Contracts Act
1950, he is no longer has any control of the letter.There was a binding contract between them
when Michael (offeree) convey his acceptance to the Joey (offeror) which fulfilled under
section 2(a) Contracts Act 1950. However, Michael changed his mind and informed Joey by
phone call about the revocation of the acceptance to her. So, there was a revocation of
acceptance made by the Michael and has come to the knowledge of Joey which fulfilled under
section 4(3) Contracts Act 1950. The revocation of acceptance happened before the letter of
acceptance is completed against Joey (offeror) but not afterwards, this scenario is fulfilled
under section 5(2) Contracts Act 1950. In this case, Michael has sent the revocation of
acceptance by telephoned to Joey before she received the acceptance letter. So, the revocation
of acceptance was valid and there was no binding contract between them.

2
Conclusion:

The revocation of acceptance made by Michael was valid before the letter of acceptance
received by Joey. There was no binding contract between Joey and Michael.

3
Question 2

Issue:

Whether there is an agreement between Johnny and Lim when Lim makes a counter
offer or does the original offer remains open?

Law:

According to the section 2(a) of Contracts Act 1950 defines that when one person
(offeror) indicates to another person (offeree) his or her willingness to abstain from doing
anything, and hope that to obtain the consent of that other to the act or abstinence, he or she is
said to make a proposal (Coursehero 2015). When the offeree agree with the proposal, then the
proposal is said to be accepted and the contract is formed between the offeror and offeree will
be legally binding under section 2 (a) of Contract Act 1950 (Coursehero 2015).

The proposal can be rejected by offeree if there is an introduction of new term, condition
or offer is known as counter offer. If offerees change their minds and try to accept, then they
are said to be making a new offer. This is an attempt to get more favourable terms, a price
reduction. A counter offer is defined as where an offeree responds to an offer by making an
offer on different terms (E-lawresources 2017). This has the effect of destroying the original
offer so that is no longer open for the offeree to accept (E-lawresources 2017). A counter offer
means no acceptance between the parties. This situation similar with the case law Hyde v
Wrench in 1840 (Casebrief 2015). The case is about the Wrench, the defendant wrote to Hyde,
the plaintiff offering to sell his farm for 1000 pounds but plaintiff responded with an offer of
price 950 pounds in which defendant needs some time to think about it. Plaintiff made a counter
offer that he only accept the offer when it reduces to 950 pounds. After two weeks, defendant
rejected the offer and the plaintiff immediately replied that he accepted Wrenchs earlier offer
to sell to real estate for 1000 pounds. In this case, defendant was offering to sell his estate to
plaintiff at the price of 1000 pounds. Wrench refused to accept and then Hyde sue him for
breach of contract and bring to a specific performance. The court held that there was no contract
was made between the parties as the earlier offer to sell the land was terminated by the counter
offer and it could not be revived (Elliott & Quinn 2009).

4
Application:

In this case, Johnny is the offeror who signifies his willingness to Lim (offeree) that he
offers to sell his farm at a price of RM5000.00 to Lim. But, Lim said only accepted the offer if
this price can be reduced to RM 4800.00. Here, Lim is making a counter offer by reducing the
original price from RM 5,000.00 to RM 4,800.00 then he will buy the farm with the new price
or offer. A counter offer means no acceptance between the parties. But, Johnny rejects and
disagrees the new offer or price offered by Lim. Here, there is no acceptance between them.
After that, Lim changed his mind that he agreed on the original price of RM5000.00. This has
destroying the original offer and the offer is no longer available for Lim. A counter offer mean
there is no acceptance takes place because Lim has rejected the original offer while he tried to
revive the original offer by accepted the original price at RM5000.00 which is illustrated in the
case law of Hyde v Wrench.

Conclusion:

From this case, we know that by making counter offer, Lim rejected the original offer
and he was not entitled to revive it. Under this condition, there are no binding contracts between
both parties.

5
Question 3

Issue:

Whether Ben have the right to sue Sam for breach of contract, even though Ben has not
provide the consideration to Sam while the consideration is provided by their mother.

Law:

Consideration is defined as being something which represents either some benefit to

the person who making a promise (the promisor) or some detriment to the person to whom the
promise is made (the promise) or both (Elliott & Quinn 2009). In most contracts, two promises
will exchanged each other, so that each party is a promisor and a promisee in the contract.

Based on section 26 of Contract Act 1950, an agreement that is not considered is invalid.
Section 2 (d) Contracts Act 1950 that When at desire of the promisor, the promisee or any
other person has done or abstained from doing, or does or abstains from doing, or promises to
do or to abstain from doing, something ,such act or abstinence or promise is called a
consideration for the promise (Lawteacher 2017). This is illustrated in the case of Curie v Misa
which states that consideration can consist of a right, interest, profit, benefit, detriment or
forbearance (Inbrief 2017). This is where the company called Lizardi & Co,and then it is in
good credit and reputation in the city. This company has sold four bills of exchange to Mr Misa,
drawn from a bank in Cadiz. Mr Currie was the owner of the banking firm and the plaintiff
bringing the action. The bills of exchange were sold on the 11th of February, and by the custom
of bill, brokers were to be paid for on the first foreign post-day following the day of the sale.
That first day was the 14th of February. Lizardi & Co. was much in debt to his banking firm,
and being pressed to reduce his balance, gave to the banker a draft or order on Mr Misa for the
amount of the four bills. This draft or order was dated on the 14th, though it was, in fact, written
on the 13th, and then delivered to the banker. On the morning of the 14th the manager of Misa's
business gave a cheque for the amount of the order, which was then given up to him. Lizardi
failed, and on the afternoon of the 14th the manager, learning that fact, stopped payment of the
cheque (Vansluytman 2011).

However, consideration can move from the promisee under section 2(d) Contracts Act
1950 in which if a person other than the promisee the consideration, the promisee cannot
enforce the agreement (E-lawresources 2017). This means that consideration can be provided

6
by anyone or any other person other than the promisee. This principle is applied in Venkata
Chinnaya v. Verikatara Maya in 1881 where a sister agreed to pay an annuity of 653 Rupee to
her brothers who has provided no consideration for the promise, her sister (Casebrief 2013).
However, at the same day, their mother gave the sister some land, stipulating that she had to
pay the annuity to her brothers (Lawteacher 2017). However, the sister later failed to pay the
annuity to her brothers after that she was sued by him. The court held that she was responsible
to pay the annuity to her brothers. Although it did not remove from her brother, but it was a
good consideration for the promise

Application:

When something is given in return for something else, it is clear that consideration has
been given to make the agreement to be valid. In this case, Sam is the promisor who promise
to provide financial support for Bens (promisee) education by paying for his school fees and
monthly living expenses is the consideration for his mother to transfer the ownership of her
land to him. The consideration by his mother is a good consideration. Land is the consideration
by his mother for Sam to pay school fees and monthly living expenses to his younger brother,
Ben. Based on the case, only Sam and his mother provide the consideration where Ben did not
provide any consideration in return. Based on the Section 2(d) of Contracts Act 1950 and also
refer to the case of Venkata Chinnaya v. Verikataya Maya, consideration can move from the
promisee. This means that the consideration can be done by any other person, not necessary
from the promisee. Even if his brother did not provide any consideration, the agreement is still
valid between the parties.

Conclusion:

Sam hereby advised to pay the school fees and monthly living expenses to his brother,
Ben. There is no reason to state that the agreement is valid in the circumstances of it must be
made by the parties involved. However, Ben has a right to sue Sam for breach of contract if he
fails to provide him the school fees and monthly living expenses.

7
 REFERENCES

Casebref 2012, Byrne v Van Tienhoven, viewed 4 August 2017,

<http://casebrief.me/casebriefs/byrne-v-van-tienhoven/>.

Casebrief 2013, Adam & Ords v Lindsell & Anor, viewed 3 August 2017,
<http://casebrief.me/casebriefs/adam-ords-v-lindsell-anor/>.

Coursehero 2015, Gilbert Sim LLB (HONS), viewed 3 August 2017,

<https://www.coursehero.com/file/pA1bvvth/Revised-by-Gilbert-Sim-LLBHons-CLP-May-
2015-Page-4-BBBL-2023-Commercial-Law-Law/>.

E. MacIntyre 2011, Essentials of Business Law, 3th Edition, Pearson Education Limited,
England.

E-lawresources 2017, Adams v Lindsell (1818) 106 ER 250, viewed 3 August 2017,
<http://www.e-lawresources.co.uk/Adams-v-Lindsell.php>.

Inbrief 2017, Consideration in contract law, viewed 3 August 2017,

<http://www.inbrief.co.uk/contract-law/consideration-in-contract/>.

Lawnotes 2017, Section 4 of Malaysian Contracts Act, 1950, viewed 3 August 2017,
<https://www.lawnotes.in/Section_4_of_Malaysian_Contracts_Act,_1950>.

Lawteacher 2017, Consideration In Contract Formation, viewed 4 August 2017,

<https://www.lawteacher.net/free-law-essays/consideration-law/consideration-in-contract-
formation.php>.

Lawteacher 2017, Contract Law in Malaysia, viewed 4 August 2017,

<https://www.lawteacher.net/free-law-essays/contract-law/contracts-law-in-malaysia.php>.

Quinn, C. E. &. F. 2009, Contract Law, 7th Edition, Pearson Education Limited, England.

REFERENCES

Scribd 2011, Law of Contract, viewed 3 August 2017,

<https://www.scribd.com/presentation/60802677/2-Law-of-Contract>.