TUTORIAL WEEK 3 : LAW240: 25.10.
2022
LAW OF CONTRACT
Problematic question and suggested answering technique.
Kamala lost her cat, Manjalara. She advertised a reward of RM500 in the local newsletter for it
return. Puteri, Kamala’s neighbour, who was cleaning her backyard found the cat up on her
rambutan tree. She knew that the cat belonged to Kamala, so she returned it to her. Puteri only
knew of the promised reward the next day after reading the advertisement.
Advise Puteri whether she can claim the reward from Kamala.
Structure of the answer:
1. Read the question carefully and identify the relevant topic of discussion – offer and
acceptance – communication of offer.
2. Write an issue based on the given situation – the issue in the situation is whether or not
Puteri could claim RM500 from Kamala depends on whether there is a communication
of the offer.
3. State the relevant Principle of law – student has to provide relevant points based on the
issue. First, state the relevant statute/ Act that governs law of contract in Malaysia.
Principle of law means refer to the specific sections, General Rule and its exceptions,
supporting cases or certain conditions that are relevant to the question.
4. Application of the principle of law to the situation given. First, identify the parties and
apply the principle of law above to solve the problems.
5. Conclusion. Give advice to the person based on the above discussion. The conclusion
must be able to answer the issue stated in the beginning.
Issue :
Whether Puteri could claim RM500 from Kamala depends on whether there is a communication
of the offer between them or not ?.
Principles of Law:
The law of contract is governed by the Contract Act 1950.
Section 2(a)- explain
Section 2(b)- explain
Explain ITT and advertisement for reward
Explain communication of an offer
Case : R V Clarke – explain the facts of the case and the judgement.
Application :
In the situation, there was an offer made by Kamala when she advertised in the local newsletter
a reward of RM500 for the return of her cat. However, the offer was not communicated to Puteri
because Puteri was unaware of the offer at the time when she returned the cat to Kamala. By
applying the case of R v Clarke, there was no communication of the offer and thus, there was no
contract between Kamala and Puteri
Conclusion:
In conclusion, Puteri may not claim the reward because there is no contract between them.
TUTORIAL EXERCISE DURING WEEK THREE:
EACH GROUP WILL TAKE ONE QUESTION & TO BE PRESENTED DURING
OUR NEXT TUTORIAL I.E.WEEK 4
QUESTION ONE(ITT)
Kajol went shopping at SRK Bhd and was attracted to a VCD ‘Dilwale’ displayed on the
shelves. Kajol looked at the price tag of the VCD and saw that it cost RM15. Kajol went to
the cashier’s counter to pay for the VCD. The cashier informed her that the actual price of the
item was RM45, not RM15. Kajol insisted that SRK Bhd had to sell the VCD to her at RM15
as there was a contract between them.
Kajol came to seek your advice. Advise her.
QUESTION TWO(ACCEPTANCE BY POST & REVOCATION OF
PROPOSAL/OFFER)
On 1st January 2015, Ayu Maisara wrote to Anas Mikael, proposing to sell her boutique in
Damansara Perdana at RM800,000. They agreed to use postal communication.
Anas Mikael posted a letter of acceptance on 14 th January and the letter reached Ayu Maisara
on 16th January 2015. Meanwhile, having been offered a higher price by Tunku Mukhriz, Ayu
Maisara called Anas Mikael on 15th January 2015 to withdraw her proposal to sell the
boutique.
Advise Anas Mikael who wishes to bring legal action against Ayu Maisara.
QUESTION THREE(COUNTER OFFER)
Sofea Hana offered to sell her diamond ring to Sarah Hani for 5000 via letter. Sarah Hani, in
reply gave a new figure which is less than RM4500. Sofea Hana was silent as to the offer. A
couple of days later Sarah Hani changed her mind and agreed to the original amount. Sofea
Hana refused to sell and Sarah Hani claimed a contract has come into existence.
Advise Sofea Hana.
QUESTION FOUR(ACCEPTANCE BY POST & REVOCATION OF OFFER)
On 1 May, Wak Din wrote to Abu, his nephew, offering to sell his house and giving Abu
until 31 May to accept the offer. The letter, however, was misdirected and reached Abu on 30
May. Upon receiving the letter of offer on the same day, Abu immediately posted his
acceptance letter. Meanwhile, Wak Din, thinking that Abu was not interested in the offer,
sold the house to his niece, Minah, on 1 June.
Advise Abu whether a valid contract is constituted between him and Wak Din and if so,
whether he can successfully sue for specific performance of the contract.
QUESTION FIVE (COUNTER OFFER )
Usin offered to sell his house to Abi for RM100,000. In reply, Abi agreed to buy the house
but at a purchase price of RM90,000. Usin did not agree with the new price and sold the
house to Usop without informing Abi. Two days later, Abi wrote again to Usin stating that he
was prepared to pay RM 100,000 for the house. Usin informed Abi that the house had been
sold to Usop.
Advise Abi whether a valid contract exists between him and Usin and if so, whether he can
succesfully sue for specific performance of the contract.
ANSWER SCHEME
Q1.ISSUE:whether there is a contract between Kajol and SRK Bhd?
PRINCIPLES OF LAW:
S.2(a) of the CA 1950:
S.2(b) of the CA 1950:
ITT:It is not a proposal. Invitation to potential customer to make offer. Up to potential seller to decide whether or
not to accept.
e.g.Display of goods.
Pharmaceutical Society of Great Britain v. Boots Cash Chemist Ltd.
Application
VCD display on the shelves:ITT.
Mary made the offer when she took the VCD and went to the cashier counter.
Acceptance:when the cashier punched the price.
In this case, the cashier did not punch the price yet. So, no acceptance, no contract.Therefore, she cannot
persuade SRK Sdn Bhd to sell the VCD at RM15.
Conclusion:
Q2:ISSUE:whether there is a contract between Ayu Maisarah and Anas Mikael?
PRINCIPLES OF LAW:
Proposal:must be communicated
S4(1): communication of proposal completes when it comes to the knowledge of the person to whom it is made.
R v. Clarke
Acceptance through post
S.4(2)( a ):communication of acceptance complete against propose/promisor when it is put in the course of
transmission/posted
Adams v. Lindsell
Ignatius v. Bell
Revocation of Proposal
s.5(1)- proposal-can be revoked at any time before acceptance
s.6(a)- proposal maybe revoked by communication of notice of revocation
Bryne v. Van Tienhoven
Application:
Based on section 4(2) (a ) and decided cases, there is a contract created between Ayu Maisarah and Anas
Mikael on 14th January when Anas Mikael posted the letter of acceptance. The revocation was invalid as it was
communicated to AM on 14th January after AM has done the acceptance.
Conclusion:
Q3: ISSUE: whether there is a contract between Sarah hani and Sofea Hana?
PRINCIPLES OF LAW:
S.2(a):
S.2(b):
S.7(a):
Hyde v. Wrench
Facts:
Held:
APPLICATION:
In this case, it is about counter offer. CO is treated as a rejection to the original offer. When Sarah Hani asked for
a discount, automatically the original offer has been terminated. So there is no binding contract between them.
By applying H v W case, Sofea Hana can refuse in not selling the ring since the offer has been terminated.
Furthermore, Sarah Hani cannot insist that there is a contract between them.
CONCLUSION:
In conclusion, there is no contract between Sofea Hana and Sarah Hani since there is an existence of counter
offer.
ALL THE BEST !
