AIZAT ALIFF BIN AZAHAR
2021123471
KBA1114R
Lela had lost her son, Amirul. She advertised in the local newspaper that whoever finds Amirul
and returns him to Lela, she would give that person RM 10,000 as a reward. Three days later,
Amirul was found by Daniel who returned him to Lela. Daniel had read the newspaper and
seen the advertisement.
Advise Daniel whether he is entitled to the reward.
Issue
Whether Daniel is entitled to the reward offered by Lela.
Principle of law
In the matter of valid offer, in Section 2(a) of the Contracts Act 1950, offer is defined as “when
a 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 said to make a
proposal”.
In CARLILL v CARBOLIC SMOKE BALL CO, it was held that the advertisement by Smokeball
Co was valid because it was a general offer which is directed to the public. It was also clear,
complete and final. Anyone who fulfil the three conditions stated in the advertisement is
considered as a Valid Acceptor.
Consideration meanwhile is a form of exchange of value given by the promisee or any other
party to the promisor. Section 2(d) Contract Act 1950 defines consideration as ‘when, at the
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’.
There are three types of consideration which is executory, executed and past consideration.
Executory consideration is when one promise is made in return for another promise. For
example, A agrees to sell his house to B for RM10,000. Here, B promise to pay the sum of
RM10,000 is the consideration for A’s promise to sell the house, and A’s promise to sell the
house is the consideration for B’s promise to pay the RM10,000. These are lawful
consideration.
Executed consideration is a consideration is executed when a promise is made in return to
the performance of an act. For example, X promises to pay RM200 to anyone who finds and
returns his lost handphone. In response to the offer Y put some effort and finally finds the
handphone of X. Y returns it to X. In this situation the act of Y in finding and returning the
handphone is the executed consideration for X’s promise to pay. Therefore, X’s promise is a
contract.
Past consideration is where one promise is made subsequent to and in return for an act that
has already been performed. For example, X asks Y to help him in finding his lost handphone.
In response to that request, Y puts some effort and finally finds it. When Y returns it to X and
feeling thankful, X promises to pay RM200 to Y. X’s promise is made in return for the past act
of Y. The past act of Y is considered as a past consideration. Hence, X’s promise is a contract.
Application
On the facts of Daniel and Lela, Lela’s advertisement was an offer according to the case of
CARLILL v CARBOLIC SMOKEBALL CO and Section 2(a) of Contract Act 1950. It clearly
stated the conditions of the offer. It was also a general offer. Daniel’s finding Lela’s son was a
valid offer and the offer as in the case of CARLILL v CARBOLIC SMOKEBALL CO by fulfilling
Lela’s condition. Thirdly, Daniel’s effort in finding Lela’s son is a form executed consideration.
This type of exchange of value was seen in the case of CARLILL v CARBOLIC SMOKEBALL
CO where the increase sales of smokeball during an influenza was an exchange of value to
the promise by smokeball to pay the 100 pounds reward.
Conclusion
In conclusion, Daniel is entitled to the reward offered by Lela since the advertisement was an
offer.
