GST 5093 BUSINESS LAW

ORDER OF PRESENTERS FORM

VENUE
SEMESTER

MGSEB UMK KUCH

AUGUST SEPTEMBER 2015

SEMESTER ID

INTAKE 2014/2015 GROUP 3

(WEEKEND)

INSTRUCTUR

ASSC. PROF. DR. TARUDIN YASSIN

GROUP : REACTION PAPER 1

NAME/MATRIC
NO.

DAYANG ADELINA BT ABANG MUAN

P14D394P
NORHANA HAINI BT SAINI
P14D398P
SYARIFAH ROHAYA BT WAN IDRIS P14D397P

SUBMISSION
DATE

NOVEMBER 28TH, 2015

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REACTION PAPER 1
THE BEST DEAL

1.

2.

ISSUE
1.1

Is there an issue of invitation treat occurred?

1.2

Was the counter offer a rejection of the original offer?

1.3

Did Plaintiff accept the counter offer?

1.4

When does an acceptance sent through the post become effective?

LAW
2.1

Issue of invitation to treat

Invitation to treat is The essential feature of an offer is that the person making it must
(actually or objectively) intend to be bound without further negotiation, by a simple acceptance of
his terms. Thus there is no offer where the owner of a house, in response to an enquiry from a
person who wishes to buy it, states the price at which he might be prepared to sell; nor even where
the owner wishes to sell and invites offer at or about a specified price. In the latter case he is said to
make an invitation to treat, and he is not bound to accept the highest or nay other offer. In border
line cases it is obviously hard to determine with what intention the statement was made: but the
difficulty is mitigated in two days. First, it is enough to show that the statement was reasonably
understood by the person to whom it was addressed as indicating an intention to be bound; and
secondly, the character of certain frequently-recurring types of statements is settled by rules of law,
at any rate in the absence of clear evidence of contrary intention.
In Pharmaceutical Society of Great Britain v Boots [1953] 1 QB 40 case of an ordinary
shop, although goods are displayed and it is intended that customers should go ahead and choose
what they want, the contract is not completed until, the customer having indicated the articles which
he needs, the shopkeeper, or someone on his behalf, accepts that offer. Then the contract is
completed.
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In Partridge v Crittenden case was a case stated by the Magistrates' Court sitting at the
Castle in Chester on the 19th July 1967.On the 13th April 1967 an advertisement by the appellant
(Arthur Robert Partridge) appeared in the periodical "Cage and Aviary Birds", under the general

heading "Classified Advertisements" which contained, amongst others, the words Quality British
A.B.C.R... Bramblefinch cocks, Bramblefinch hens 25 s. each. In no place was there any direct use
of the words "offer for sale". A Thomas Shaw Thompson wrote to Partridge asking him to send him
an ABCR Bramblefinch hen (a brambling) and enclosed a cheque for 30s. On the 1st May 1967
Partridge dispatched a brambling, which was wearing a closed-ring around its leg, to Thompson in a
box. Thompson received the box on 2nd May 1967 and was able to remove the ring from the bird's
leg without injuring it. Partridge was charged by Anthony Ian Crittenden, on behalf of the RSPCA,
with illegally offering for sale a wild life bird which was not a close-ringed specimen, bred in
captivity, against s. 6(1)* and Sch. 4* of the Protection of Birds Act 1954. The magistrates decided
that the advertisement was an offer for sale and that the ABCR Bramblefinch hen was not a closeringed specimen bred in captivity, because it was possible to remove the ring from the bird's leg. It
was held that the advertisement in question constituted in law an invitation to treat and it is not
an offer to sell, therefore the offence with which the appellant was charged was not established.

In The Carbolic Smoke Ball Company, during an influenza epidemic, placed an

advertisement indicating that they promised to pay 100 to anyone (hence a unilateral contract) who
caught influenza after using their ball as indicated for two weeks. They had deposited 1000 in a
bank account as a gesture of good faith. Mrs. Carlill purchased the ball, used it as directed, but
caught influenza and sued the Carbolic Smoke Ball Co. who then refused to pay.

2.2

Issue of Counter Proposal

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Any Modification Or Variation Of The Proposal Does Not Constitute An Acceptance But
Amounts To A Counter Offer. A Counter Offer Destroys The Original Offer.

In Hyde vs. Wrench (1840) cases The defendant offered to sell his farm for 50000. The
claimant at first said that he would pay only 45000, but after a few days said he would pay the full
price. He heard nothing from the defendant. It was held that there was no contract between the
parties: the defendant had not accepted the offer from the claimant, who had destroyed the
defendants original offer by his counter offer of a reduced price. The claimants subsequent
statement that he would pay the asking price could not revive the original offer. It was a new offer
which the defendant never accepted.

If the offeree, while not accepting an offer, asks for further information, or tests out the
ground to see if further negotiation is possible, this is not treated as a counter offer; it, thus, does
not destroy the offer. (Law For Business Students Alix Adams; Fourth Edition; p53, 2006).
An offer made in response to a previous offer by the other party during negotiations for a final
contract. Making a counter offer automatically rejects the prior offer, and requires an acceptance
under the terms of the counter offer or there is no contract.

2.3

Issue of Acceptance

Acceptance results in the formation of a contract: both parties are bound and neither can withdraw
from the bargain without incurring liability to the other. The general rule is that acceptance of a
proposal must be communicated to the proposer for there to be a binding contract between the
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parties. For an acceptance to be communicated it must normally be brought to the notice of the
offeror.
Section 4(2) Contracts Act 1950 - The Communication of an acceptance is complete :
(a)

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, and

(b)

as against the acceptor, when it comes to the knowledge of the proposer.

For example in Eliason v Henshaw (1819) 4 Wheaton 225. Eliason offered to purchase flour from
Henshaw. Eliason specified that acceptance of offer be made by mail coach to Harpers Ferry.
Henshaw sent the acceptance by post to Georgetown on the assumption that it would reach Eliason
faster. Unfortunately the mail was late and the Court held Eliason was justified to refuse Henshaws
acceptance.
The exceptions to the rule that acceptance must be communicated are as follows:(i)

The proposer has dispensed with the need for it.

(ii)

The proposer allows the party to whom the proposal is made to perform the condition of a
proposal, i.e acceptance taking the form of performance of an act stated in the proposal. A
common sense approach to the law.

APPLICATION

The first issues is relating to invitation of treat . The case established that, Usop has decided to sell
his proton car by parking it outside his house with a notice on the wind screen stating : For sale ,
One Owner. Best Price RM8,750.00. Please call at number 34 Jalan Semarak 2, Kuala Lumpur or
telephone 03-2251178. Such display is treated as an invitation to treat by the seller, and not an
offer. The offer is instead made when the customer call him or come over to his house together with
payment. Acceptance occurs at the point the seller takes payment.
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The second issue was counter offer exist in this case when Sarah saw the car and called Usop by
offering RM8,000.00 for the car. Although a that time Usop said nothing but on Monday afternoon
Usop decided to sell his car to Sarah by posting a letter agreement at 2.30pm. This mean that Usop
had agree with the price Sarah offered.

The third was issues of acceptance. There are 3 issue of acceptance in this case.
(i)

Sarah was the first person who saw the notice that Usop put on the car windscreen she made

a call to Usop made a offer to buy the car with the price of RM8,000. Sarah offers to buy the cars
for RM8,000. This is a counter-offer which operates as a rejection of Usops offer to sell for
RM8,750. Sarah is now the offeror. Usop, however, Usop didnt say nothing but later in the evening
Usop decided to sell his car to Sarah by posting a letter agreement that should reach Sarah by
tomorrow. But Sarah didnt receive the message because she was away at the time Usop leave the
message. She was away on business and only listens to the answering machine and Wednesday.
Acceptance is complete as against the accepter, when it comes to the knowledge of the
proposer. This Implies that while the proposer is bound upon dispatch of acceptance by
the acceptor, the latter is not bound until it is actually received by the proposer.
(ii)

Ramesh saw notice and hurriedly posted a letter of acceptance with a cheque for

RM8,750.00 but unfortunately he misaddressed his latter and it only reached Usop on Friday.
Ramesh could be out of picture according to Sec. 7(b).
(iii)

Betty on Monday 11.00 am also interested to buy the car and has called at Usop house but

nobody was there except Fatimah, His daughter. Betty left her massage to Usop saying she is
interested to buy the car and left a cheque and her contact number.
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When Usop reaches home at 4.30 on Monday, he saw the message and immediately call and
revoking or withdrawing his offer to sell to Sarah and left his message by saying: I have posted
a letter of agreement to you this afternoon. Please ignore it. Our deal is off. Usop

4.

CONCLUSION

There is no contract between Usop and Ramesh because according to Sec. 7(b) the acceptance must
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. In this case, there is
no communication between Usop and Ramesh since Ramesh misaddressed his letter to Usop that
will be reached to him on Friday.
There is no contract between Usop and Sarah because according to Section 5(1), a proposal may be
revoked at any time before the communication of its acceptance is complete as against the proposer,
but not afterwards. An offer can be withdrawn at any time before acceptance, except where the
promise to keep the offer open is supported by consideration. Sarah did not pay a deposit to Usop so
Usop is free to revoke his offer. However, to be effective, the revocation must be communicated to

the offeree either by the offeror or a reliable third party (Byrne v VanTienhoven). Usops attempted
revocation by phone fails, however, his left his message on answering machine and only listen by
Sarah on the Wednesday. It must be remembered that a revocation of offer by post is not deemed to
have been communicated until it has been received and read by the offeree.
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The best deal goes to betty because according to Section 4(2)(b), the communication of an
acceptance is complete as against the acceptor, when it comes to the knowledge of the proposer. In
this case, Betty is the person who has secured the deal with Usop since Usop received the message
from Betty and she willing to pay the amount of the car according to Usop offer.

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