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Contract Law 1 - Coggle Diagram

- - - - Section 7(a) CA:
        
        “In order to convert a proposal into a promise the acceptance must—
        
        (a) be absolute and unqualified;
        
        The Federal Court in Seni Jaya Sdn Bhd & Anor v Dato’ Hj Ahmad Tarmizi Hj Puteh & Anor
        
        Terms of offer amended at time of acceptance
        
        Jones v Daniel
        
        , in reply to a written offer by the defendant to purchase the plaintiff's property for £1,450, the plaintiff's solicitors wrote accepting the offer, and continued: "We enclose contract for your signature. On receipt of this signed by you across the stamp and deposit we will send you copy signed by him".
        
        The enclosure was a contract with the usual conditions of sale providing for a deposit of 10%, fixing a date for completion, and limiting the period of the defendant's title.
        
        The Court held that by the addition of a new document (the enclosed contract), the acceptance was not absolute but amounted to a counter-offer which was never accepted by the defendant.
        
        If the acceptance contains clauses adding on or amending the terms of the offer, it is not absolute and unconditional and there is no valid acceptance
        
        Acceptance made "subject to contract" or to fulfil condition precedent
        
        There are two approaches to this matter:
        
        The parties have already entered into a legally binding contract and the execution and signing of the document is a mere formality
        
        4 more items...
        
        There is no contract and the court will construe such words so as to postpone liability until the formal document is signed.
        
        1 more item...
        
        (b) be expressed in some usual and reasonable manner, unless the proposal prescribes the manner in which it is to be accepted. If the proposal prescribes a manner in which it is to be accepted, and the acceptance is not made in that manner, the proposer may, within a reasonable time after the acceptance is communicated to him, insist that his proposal shall be accepted in the prescribed manner, and not otherwise; but, if he fails to do so, he accepts the acceptance.
      - The effect of s 7(a) of the Contracts Act is that an acceptance must be an unconditional assent to the terms proposed in the offer.
        
        This principle was stated in The Ka Wah Bank Ltd v Nadinusa Sdn Bhd & Anor [1998] 2 MLJ 350, FC stated as follows:
        
        According to Chitty on Contracts, 26th Ed (1989) Vol 1, para 54, p 44, 'an acceptance is a final and unqualified expression of assent to the terms of the offer'. But, where the reply is qualified or attempts to vary the terms of the offer or attempts to accept an offer on new terms (not contained in the offer), then such a reply is not a communication of an acceptance but may be a rejection accompanied by a counter-offer which the original offeror can accept or reject.
  - - - Tinn v Hoffman & Co
    - - two conflicting decisions whether acceptance can take place if the acceptor is not aware of the offer.
        
        In Gibbons v Proctor, (1891) 64 LT 594, the Court allowed the claim for a reward even though the claimant was not aware of the offer of the reward. In this case, the defendant published on May 29 a handbill for a reward of £25 to any person who could give information leading to the conviction of a perpetrator of a certain crime, such information to be given to a superintendent of the police named Penn.
        The plaintiff was a police officer and in the early morning of May 29, before the bill was published, communicated to a fellow policeman named Coppin important information which led to the conviction of the offender. …
        The Court ruled that the plaintiff was entitled to the reward, since the information had reached Superintendent Penn after the publication of the handbill and the announcement therein contained the defendant's offer of the reward to the informant.
        
        different decision was given in a similar case in Fitch & Anor v Snedaker 38 NY 248 (1868). In this case, the sheriff of a county offered a reward for information leading to the apprehension and conviction of the murderers associated in a crime. The informers (the plaintiffs) provided information concerning the murder, but failed to obtain the reward from the sheriff. With respect to the first informer, he was not entitled because his information was given before the sheriff made the offer of a reward. With respect to the second informer, he was not entitled because his information was given before he was aware of the sheriff's offer of a reward.
    - - Williams v Carwardine 5 C7 P 566, the plaintiff knew of a reward but gave the information leading to the discovery of the murderers, not for the reward, but to "ease her own conscience and in hopes of forgiveness".
        The Court held that her motive was not material; as long as she came within the terms of the handbill (offer), it was sufficient.
      - A different decision was arrived at by the Australian court in R v Clarke (1927) 40 CLR 227. In this case, the Government of Western Australia offered a reward "for such information as shall lead to the arrest and conviction of the person or persons who committed the murders" of two police officers. Clarke, who had seen the offer, gave information that led to the arrest of one person, and the conviction of that person and one other. When giving that information, he was under arrest on a charge of murder. He then claimed payment of the reward. The Court held that the government was under no contractual obligation to pay him the reward “… in giving the information he was not acting on or in pursuance of or in reliance upon or in return for the consideration contained in the proclamation, but exclusively in order to clear himself from a false charge of murder ... he has, in my opinion, neither a legal nor a moral claim to the reward.
  - - - Section 4(2)(a) & (b) of CA
      - Section 9 of CA
      - Section 8 of CA
      - Section 7(b) CA
  - - - While the general rule at common law is that acceptance is complete when it is brought to the notice of the offeror, an exception is the postal acceptance rule. This rule stipulates that acceptance is complete when the letter containing such acceptance is posted, or when the telegram containing such acceptance is handed in.
        
        Household Fire and Carriage Accident Insurance v Grant (1879) 4 EX D 216; 41 LT 298, CA, the defendant made an application for shares in the plaintiff's company under circumstances from which it must be implied that he authorised the company, in the event of their allotting to him the shares applied for, to send the notice of allotment by post. The company did allot him the shares, and posted a letter duly addressed to him containing the notice of allotment, but it was found as a fact that the letter never reached its destination.
      - Adams v Lindsell (1818) 1B & Ald 681.
        
        In this case, the defendants, who were dealers of wool, had on September 2, written to the plaintiffs, woollen manufacturers, offering to sell to them a number of fleeces. They required an answer "in course of post". The letter was misdirected by the defendants, and consequently was not received by the plaintiffs until September 5. On the same evening, the plaintiffs wrote an answer, agreeing to accept the offer on the terms proposed. The acceptance did not reach the defendants until September 9. On September 8, the defendants, not having received an answer on September 7, as they had expected (which they would have, if their letter had not been misdirected), sold the wool to a third party.
        
        The Court applied the postal rule of acceptance and held that the acceptance was complete as against the defendants on September, 5 ,i.e., prior to the revocation of their offer through the sale of the wool to the third party on September 8.
        
        The Court held that if the rule was that no contract could be formed until the acceptance was actually received, no contract could ever be completed; for if the defendants were not bound by their offer till the answer was received, the plaintiffs ought not to be bound till after they had received the notification that the defendants had received their answer and assented to it, and so it might go on ad infinitum.
        In the above case, the defendants specified that the acceptance be made via the post. Where it is not specified, an acceptance is to be made in the usual and reasonable manner.
      - Henthorn v Fraser
        
        Henthorn v Fraser [1892] 2 Ch 27, CA the Court of Appeal inferred that both parties would have contemplated that the letter be sent by post.
        
        In this case which involved the offer of an option to purchase some houses, Lord Herschell stated:
        
        “In the present case an authority to accept by post must be implied. Although the Plaintiff received the offer at the Defendants’ office in Liverpool, he resided in another town, and it must have been in contemplation that he would take the offer, which by its terms was to remain open for some days, with him to his place of residence, and those who made the offer must have known that it would be according to the ordinary usages of mankind that if he accepted it he should communicate his acceptance by means of the post... Where the circumstances are such the acceptance is complete as soon as it is posted”
      - Holwell Securities Ltd v Hughes
        
        , in Holwell Securities Ltd v Hughes [1974] 1 WLR 155, CA, also a case of an option to purchase property, the Court of Appeal had refused to make a similar inference. In this case, the defendant granted the plaintiffs an option to purchase certain property. The option provided that it "shall be exercisable by notice in writing to the [defendant]". The plaintiff's solicitor sent a written notice exercising the option by ordinary post to the defendant but it never reached the defendant.
        
        Lawton LJ referred to the postal rule and to Henthorn's case above but held that it would not apply if the offer expressly specifies that the acceptance must reach the offeror and if application of the rule causes "manifest inconvenience and absurdity".
        
        The Court placed much emphasis on the meaning of notice which must mean that it must be known or intimated to the vendor who never was since the letter carrying the information went astray.
      - Lee Seng Heng & Ors v Guardian Assurance Co Ltd
    - - Entores Ltd v Miles Far East Corporation
    - - Woon Yoke Lin (Berniaga sebagai Syarikat Ceritaku) v United Estate-Projects Berhad
      - EMS Bowe (M) Sdn Bhd v KFC Holdings
    - - Fraser v Everett
      - Felthouse v Bindley
      - Weatherby v Banham
    - - Contracts Act 1950, s 7 provides that “the acceptance must—
        
        (a) be absolute and unqualified;
        
        (b) be expressed in some usual and reasonable manner, unless the proposal prescribes the manner in which it is to be accepted. If the proposal prescribes a manner in which it is to be accepted, and the acceptance is not made in that manner, the proposer may, within a reasonable time after the acceptance is communicated to him, insist that his proposal shall be accepted in the prescribed manner, and not otherwise; but, if he fails to do so, he accepts the acceptance.”
        
        Under s 7 (b) of the Contracts Act, if the acceptance is not made in the manner prescribed by the proposer, the onus is on the proposer to insist that it shall be accepted in the prescribed manner. If he does not insist, then he is deemed to have accepted the acceptance.
      - Manchester Diocesan Council for Education v Commercial & General Investments Ltd
      - Ramakrishnan Chelliah v Lotte Chemical Titan Holding Bhd & Anor [2020] MLJU 1921
  - - - Section 5(2) of the Contracts Act 1950 provides:
      - “An acceptance may be revoked at any time before the communication of the acceptance is complete as against the acceptor, but not afterwards.
      - Following s 4(2)(b) of the Contracts Act, the communication of acceptance is complete as against the acceptor when it comes to the knowledge of the proposer.
      - Thus, an acceptance may be revoked at any time before or at the moment the letter communicating the acceptance reaches the proposer, but not afterwards (see the last illustration in s 5).
      - If the revocation is made within the time frame allowed, it is then necessary to determine when the co
- - - - Abdul Rashid v Island Golf Properties Sdn Bhd [1989] 3 MLJ 376
    - - Payne v Cave 1789) 3 Term Rep 148
        
        M & J Frozen Food Sdn Bhd & Anor v Siland Sdn Bhd & Anor[1994] 1 MLJ 294, S
    - - blackpool and fylde aero club v blackpool BC
    - - spencer & ors v Hans & Ors
    - - Fishers v bell
      - Pharmaseutical society of Great Britain v Boots
    - - Malaysia cases
        
        Coel v the public services commission
        MN Guha Majumder v RE donough
      - bilateral
        partridge v crittenden
      - unilateral
        S8 CA
        Carlill v Carbolic Smoke ball
      - most case an advertisment is treated as an ITT
  - - - it may be expressly or impliedly
        
        2.1 Section 9 CA: so far as the proposal or acceptance of any promise is made in words, the promise is said to be express. so far as the proposal or acceptance is made otherwise than in words, the promise is said to be implied.
        
        2.2 preston corpn sdn bhd v edward leong
      - its meaning must be clear
        
        3.1 Ahmed meah & anor v Nacodah Merican
      - it must be valid
        
        4.1 affin credit sdn bhd v yap yuan fui
    - - carlill v carbolic smoke ball
  - - - In Offord v Davies & Anor, (1862) CBNS 748; 142 ER 1336 the Court explained why the promisor has not to revoke a promise made. Erie CJ stated:
      - Dickinson v Dodds
    - - Macon Works & Trading Sdn Bhd v Phang Hon Chin& Anor
        
        Aberfoyle Plantations Ltd v Khaw Bian Cheng
      - Ramsgate Victoria Co v Montefiore
      - Failure of acceptor to fulfil condition precedent to acceptance
        
        Am Financings Ltd v Stimson,5
    - - Dickinson v Dodds