TUTORIAL 1 (WEEK 2): PROPOSAL/OFFER

Question 1
Distinguished between the term agreement and contract under the Contracts Act 1950
(Revised 1974).
All contracts are an agreement, but not all agreements are contracts this is an old statement
but why it is so? According to the Contracts Act 1950 (Revised 1974) (CA), it mentions the
distinction between the term agreement and contract. The Contracts Act 1950 is the principal
legislation governing contracts in Malaysia and is modeled after the Indian Contract Act
1872. The Contracts Act is unique in drawing a distinction between an agreement and a
contract. This Act also contains provisions on offer, acceptance, consideration and capacity
necessary for the formation of valid contracts.
Under Section 2(e) of the Contracts Act 1950, an agreement is defined as "every promise
and every set of promises, forming the consideration for each other. Simply said, when the
parties have made mutual promises to each other, there is an agreement. However, not all
agreements are enforceable as s 2(g) of the Contracts Act provides that "an agreement not
enforceable by law is said to be void." Therefore, an agreement can only be considered as a
contract when it is enforced by law as s 2 (h) of the Contracts Act provides that "an
agreement enforceable by law" is a contract.
Furthermore, there are also the approach taken by the Contracts Act to distinguish between
agreement and a contract. It was noted by the Supreme Court in Beca (Malaysia) Sdn Bhd v
Tan Choong Kuang & Anor (1986] 1 MLJ 390, which held that It is useful to bear in mind
the distinction between an agreement and a contract. The word "contract" has at times been
loosely used in the past.According to this case, we are used to the English common law
which does not make the distinction between the two terms as our s2 of the Contracts Act.
However, it is necessary to remember that an agreement is different from a contract.
Moreover, the distinction between an agreement and a valid, binding enforceable contract is
provided for in s 10 of the Contracts Act, which is All agreements are contracts if they are
made by the free consent of competent to contract, for a lawful consideration and with a
lawful object and are not hereby expressly declared to be void. Thus, the requirements for a
legally enforceable contract are free consent, competency to contract and lawfulness of
consideration and object.

According to s 13 of the Contracts Act, "two or more persons are said to consent when they
agree upon the same thing in the same sense. This provides that the requirement of free
consent is foundational to contractual obligations, giving rise to the concepts of freedom and
sanctity of contract. Freedom of contract means that a person is free to enter into contracts
with any party and agree to the terms of any bargain while sanctity of a contract binds both
parties to the contract freely entered into. Therefore, free consent is an essential element to
form a legally enforceable contract
Besides, the competency of parties to enter into contracts is another important element to the
enforceability of contracts. As s 11 of the Contracts Act provides that every person is
competent to contract who is of the age of majority according to the law to which he is
subject, and who is of sound mind (s12), is not disqualified from contracting by any law to
which he is subject". By this, the law ensures persons of full capacity are responsible for and
are bound by law their actions.
Other than that, an agreement is only enforceable if the consideration for it is lawful and for a
lawful purpose. The law does not recognise illegal transactions and s 2(g) defines a void
agreement as "an agreement not enforceable by law. Section 24 of the Contracts Act is the
main provision on agreements, setting out what considerations and objects are lawful what
are not.
In conclusion, only the legally enforceable agreements are contract , which means they must
have a consideration, a lawful object, the parties makes their consent freely, they are
competent to contract, and the agreement is not declared void. If any one of the above
conditions does not satisfy, the agreement will cease to become a contract. Therefore, it can
be said that agreements are distinct from contracts.

Question 2
Discuss the meaning of offer and proposal as provided under Contracts Act 1950
(Revised 1974) and support your answer with decided cases.
According to Halsbury Laws of England, 4th edition, it define a contract or an agreement is
usually reached by the process of offer and acceptance and the law requires an offer on
ascertainable terms which receives an unqualified acceptance from the person to whom it is
made.
In Malaysia, The Contract Act 1950 it uses the term proposal, but it has the same meaning
as an offer. According to S. 2(a) of the Act it defines a proposal as when one person
signifies to another his willingness to do or to abstain from doing anything, with the view to
obtaining the assent of that other to the act or abstinence, he is said to make a proposal.
The meaning of an offer can be explained in Preston Corpn Sdn Bhd v Edward Leong
[1982] 2 MLJ 22,FC. In this case, the appellants were a company carrying on the business
relationships regarding the printing of school textbooks. There was an exchange of letters
which commenced with the respondents submitting quotations for the printing of books. This
was followed by the appellants issuing the printing order. The issue before he Federal Court
was whether the respondents quotations constituted a binding offer which when accepted by
the appellants by the issuing of the relevant printing orders, resulted in contract between
them. The court held that, the quotation were never intended to be a binding offer but was a
mere supply of information. The offer of this case was actually constituted by the printing
offer issued by the appellants. Salleh Abas FJ stated that an offer is an intimation of
willingness by an offeror to enter into a legally binding contract. Its terms either expressly or
impliedly must indicate that it is to become binding on the offeror as soon as it has been
accepted by the offeree.
There are some requirement must be fulfil regarding to an offer. A valid offer may be made
specific person or to the world. It may be made expressly or impliedly. A valid offer must be
clear and it must be valid at law.
The first requisite of a contract is that the parties should have reached agreement. Generally
speaking, an agreement is made when one party accepts an offer made by the other party.

A proposal is an expression of willingness to do contract on certain terms, made with the

intention that it shall become binding as soon as it is accepted by the other person to whom it
is addressed.
It can be inferred that the proposal has become a promise and then he is called the promisor
and the person accepting the promise is called the promisee.
An offer must be clear, complete, final and specific to avoid any vagueness. According to
Guthing v Lynn (1831) 2B & AD 232, Lynn offered to buy a horse from Guthing. He was to
pay 5 pounds extra if the horse brought him good luck. The condition laid was held by the
court to be too vague to constitute a binding contract.
A proposal may be addressed either to an individual, or to a group of persons, or to the world
at large, and may be made expressly or by conduct. According to Carlil v Carbolic Smoke
Ball Co. 1892] 2 QB 484, QB; [1893] 1 QB 256, CA, the defendant manufactured and sold
The Carbolic Smoke Ball. The company placed advertisement in various newspapers offering
a reward of 100 pounds to any person who used the smoke ball three times per day as
directed and contracted influenza, colds, or any other disease. After seeing the advertisement
Carlill (the plaintiff) purchased a ball and used it as directed. Carlill contracted influenza and
made a claim for the reward. The issue is whether there is a binding contract between the
parties. The court held that the advertisement was not mere puff, because of this statement
1000 is deposited with the Alliance Bank, showing our sincerity in the matter. This stated
that the company had proof and show the sincerity to pay.
In the section 2(b) Contracts Act provides that when a person to whom the proposal is
made which appears to say that only the addressee may accept the proposal.
In the case Boulton v Jones (1857) 2H & N 564 the defendant had business dealing with a
shopkeeper named Brocklehurst. The defendant had ordered some stocks from B but on the
day of the order B had sold his business to the Plaintiff. The Plaintiff delivered the goods
without informing the Defendant of the change of ownership.; The Defendant then refused to
make any payments. It was held that the plaintiff had no rights to accept an offer not made to
him.
According to section 4(1) Contracts Act 1950 the communication of a proposal is complete
when it come to the knowledge of the person to whom it is made. Unless there is a
communication of the proposal there can be no acceptance to form an agreement.[1] The fact

that the other party has done something which coincides with proposal without being aware
of the proposal does not bring an agreement into being. A party accepting the proposal must
be aware of its existence. In one sense a proposal cannot take effect until it is received, for
until the offeree knows about it, he can take no action in reliance on it.
In R v Clarke (1927) 40 C.L.R the Australian Government offered a reward for information
leading to an arrest and conviction of persons responsible for the murder of Two Police
officers. X and Clarke were arrested and charged with murder but later Clarke gave
information leading to arrest of Y. X & Y were later convicted and Clarke claimed for the
reward. Clarke failed to claim the reward as the information he gave was to clear himself and
not in reliance of the offer to reward.
An invitation to treat is not a proposal. There can be no acceptance as to constitute a binding
contract. When parties negotiate with the view of making a contract, many preliminary
communications may pass between them before the definite proposal is made. One party may
simply respond to a request for information (eg. By stating the price at which he might be
prepared to sell his house[2]) That party is then said to make an invitation to treat. In this
situation he does not himself make an offer but invites the other party to do so. It can be
shown in the case of Patridge v Crittenden.
Invitation to treat is an offer to make an offer. For example display of goods with price tags in
a self-service supermarket, an advertisement or an auction inviting bids for a particular
article.
In the case of Harts v Mills (1846) 15 Lj Ex 200 you offer to negotiate, or you issue
advertisement that you have got a stock of books to sell or houses to let, in which case there
is no offer to be bound by any contract. Such advertisements are offers to negotiate.
The general rule is that a display of price marked goods in a shop window is not an offer to
sell goods but is an invitation to treat to customers to make offer to buy. It can be define in
the case of Pharmaceutical Society of GB v Boots Cash Chemist Ltd (1953) 1 QB 401.
The general rule is that an advertisement is only an invitation to treat. Basically,
advertisement can be divided into two categories, namely Advertisement of bilateral contract
and advertisement of unilateral. An advertisement which is bilateral in nature, does not
amount to an offer but a mere invitation to create an offer. There are two reasons why such
bilateral advertisement does not amount to an offer, firstly it may lead to further bargaining;

and secondly that the seller of the goods may make sure whether the purchaser has the ability
to pay the price of the goods before entering into the contract. This principle has been
explained in Partridge v Crittenden [1968] 1 WLR 1204 and Grainger & Son v Gough
[1896] AC 325, whereby in Partridges case, the appellant had placed an advertisement in the
newspaper stating that he has some wild birds to sell. The issue here is whether such
advertisement amounts to an offer or an invitation to treat. It was held by the Court of Appeal
that an advertisement which is bilateral in nature does not amount to an offer but only a mere
invitation to create an offer.
An advertisement which is unilateral in nature, which clearly states the price or reward has
been held by the common law to be an offer, and is enforceable in the court of law. In
Carlills case, the defendant advertised in a newspaper promising a reward of 100 deposited
in the bank for anyone who could not recover from influenza after consuming the medicine
manufactured by the defendant's company. The Court, in this case, held that such an
advertisement constitutes an offer since the defendant had indicated his intention clearly in
the advertisement.
Whether a statement made is an offer or an invitation to treat depends on the intention of the
party making the statement, and the manner in which the person or persons to whom it is
made interprets it.
Advertisement can be treated either as an invitation to treat or a contract, it is depends on the
circumstances of the case. However, a general rule had been laid down in case of Eckhardt
Marine GMBH v Sheriff by Gopal Sri Ram JCA an advertisement is considered by courts
to be not an offer but a mere invitation to treat, that is to say, an offer to make offer".
Therefore, generally, the statement make by Ah Chong is amount to invitation to treat, not an
offer.
By referring to case of Crawley v R [1909] Transvaal 1105, 1108, the court held that it is
unreasonable to expect a seller to have sufficient goods for sale, hence, goods advertised for
sale in newspaper is held to be invitations to treat rather than offers.
In the case of MN Guha Majumder v RE Donough [1974] 2 MLJ 114 , the court had held
that the sale of house through an advertisement in the newspaper is amount to invitation to
treat; and in case of Eckhardt Marine GMBH v Sheriff, the court of appeal hold that an

advertisement for the sale of a motor vessel by a sheriff was an invitation to treat and not an
offer.
It is essential to note that not all advertisements is an invitation to treat. It can be an offer to
which another party can accept. In order to decide whether it is an invitation to treat or a
proposal, we have to look at the intention of the parties involved.
Tender is also an invitation to treat and the person who announced the tender may accept or
refuse the offer made by the readers of the said tender.
According to Spencer v Harding (1870) LR 5 CP 561, the defendant had sent out letters of
tender for a said article. The Plaintiffs tender was the highest but the defendant did not
accept it. The Court held that the defendant was right to refuse the offer because no contract
had existed between them. A letter of tender is only an invitation to treat.

Question 3
Distinguished between an offer and an invitation to treat under the Contracts Act 1950
(Revised 1974) and support your answer decided cases.
According to Oxford Dictionary, offer is defined as a present or proffer for someone to
accept or reject it. An offer is a definite promise to be bound provided that certain terms are
accepted. Offer is capable of being converted to an agreement by its acceptance. In other
word, offer can be known as proposal under Contract Act. By the virtue of section 2(a) of
the Contract Act 1950, proposal is defined as a person signifies another person 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.
Next, Invitation to treat is defined as an invitation to another person to make an offer to
contract. Basically, an invitation to treat is an invitation to make an offer, to negotiate, to
make a deal or an offer to receive offers. It has no legal consequences and only a preliminary
communication which passes at the stage of negotiation.
An offer is different from an invitation to treat as invitation to treat is a statement which is not
intended to be binding at law. An invitation to treat invites parties who are interested to make
an offer. Invitation to treat is one of the situations where a statement is not regarded by the
law as proposal. Invitation to treat can be divided into a few categories which are Goods on
Display, Auctions, Advertisements and Tenders.
Advertisements could be a picture, short film, song that tries to persuade people to buy a
product or services according to Cambridge Dictionary. An advertisements can be offer or an
invitation to treat which depends on the intention of the party that placing the advertisement.
Advertisement is not a proposal, it only attempt to induce people to make an application or to
make a proposal to buy. The proposal is actually made by the applicant through his
application. However, there are exception where advertisement could also be held as offer
based on the case Carlil v Carbolic Smoke Ball Co. [1892] 2 QB 484, QB; [1893] 1 QB
256, CA. This case shows an example of advertisements of unilateral contracts which will
usually be held as offers. In this case, the advertisement promise a reward of 100 if a person
contracted influenza after using the smoke ball. The plaintiff after using the smoke ball
contracted influenza and the defendants have to perform their promise to pay the 100. Based

on section 8 of Contract Act, it is a statutory recognition of acceptance by the conduct and

of the concept of a unilateral contract.
If an advertisement is a bilateral contract, it is usually not offers. Usually, an offeror will
make a promise in return for a promise by the offeree. This situation can be seen in the case
Coelho v The Public Services Commission [1964] MLJ 12, the appellant applied for the
post of Assistant Passport Officer which was advertised in the newspaper. The appellant was
then informed accepted. However, after being posted to the Immigration Office, he was
terminated by payment of one month salary in lieu of notice. He applied for certiorari to
quash the decision. However, the court held that the resulting applications was an invitation
to qualified persons. The information conveyed to the appellant was an unqualified
acceptance. Thus, the respondent had acted ultra viresin purporting to terminate his
appointment for officers on probations.
Next, display of goods on a shops shelves or windows do not constitute a proposal to sell
from the shop-owner. A display of goods is generally regarded as an invitation to treat. It is
not offer because it is the customer who makes the proposal to buy. For instance, by taking
the goods off the shelf and placing them on the counter. Agreement will be formed when the
shop-owner or cashier accepts the offer by accepting the customers money. This can be seen
in the case Fisher v Bell [1961] 1 QB 394. In this case, the court held that displaying a knife
in a shop window did not amount to an offer for sale. The issue of this case is whether the
shopkeepers display in his shop window of a flick knife amounted to an offer of the knife for
sale contrary to section 1(1) of the Restriction of Offensive Weapons Act 1959. The court
held that the display of knife is merely an invitation to treat.
Furthermore, tenders are normally considered as offer unless it is accompanied by words that
the highest tender will be accepted. An advertisement for tenders is an invitation to treat
because the advertisement intended to invite contractors to submit their application for the
tenders. Thus, it is the tenders that offers. In the case Spencer & Ors v Han & Ors (18694870) LR 5 CP 561, the defendant issued to the plaintiff and other persons in the wholesale
trade a circular in the following words which are we are instructed to offer to the wholesale
trade for sale by the tender the stock in trade of Messrs G. Eilbeck & Co. which will be sold
at a discount in one lot and payment in cash. The plaintiff sent in a tender which turned out
to be the highest tender, however it was not accepted. The plaintiffs insisted that the circular
amounted to sell to the highest tender. The court held that there was a total absence of any

words to the effect that the highest bidder would be the purchaser. It is only an attempt to
ascertain whether an offer can be obtained within such a margin as the sellers are willing to
adopt.
Moreover, an auctioneers request for bids is not an offer but a mere invitation to make a bid.
It is the bidder who makes the proposal to buy the auctioned things. The acceptance is
completed once the auctioneer accepts the bid at the fall of the auctioneers hammer.
According to the case Payne V Cave (1789) 3 Term Rep 148, the defendant made the
highest bid and withdrew it before the fall of the hammer. The judge, Lord Kenyon CJ held
that the bid itself constituted the proposal which the auctioneer was free to accept by the fall
of the hammer. Thus, there was no contract between the parties. The general rule that in an
auction, the sale is concluded at the fall of the hammer. This application is also applied in
Malaysia.
In a nutshell, offer is not invitation to treat. Invitation to treat is a statement which is not
intended t be binding by law. Invitation to treat is actually an invites for the parties to make
an offer. Thus, an offer should be distinguished from an invitation to treat.

Question 4
Discuss the legality of communication in making an offer, acceptance and revocation
under the Contracts Act 1950 (Revised 1974) and support your answer with decided
cases.
According to s 2(a) of Contracts Act 1950 (hereinafter referred to as CA1950), an offer is
defined as when one 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 general, an offer is a definite promise to be bound provided that certain
specified terms are accepted. Besides, s 2(b) of CA 1950 defines acceptance as when the
person to whom the proposal is made signifies his assent thereto, the proposal is said to be
accepted. A proposal when accepted becomes a promise. Moreover, according to Blacks law
Dictionary, revocation in the perspective of contract is defined as withdrawal of an offer by
the offeror.
In order to have legal effect, an offer must be communicated. S 3 of CA 1950 provides
general provision on the communication of acceptance of offers as well as revocation of
offers and acceptances. S 3 also allows communication through any act as well as omission.
Apart from that, s 4(1) of CA 1950 states that the communication of making an offer is
complete when it comes to the knowledge of the person to whom it is made. The examples of
case law is Tinn v Hoffman & Co (1873) 29 LT 271, HL. In this case, Hoffman wrote to
Tinn offering to sell him 800 tons of iron at 69s per ton. On the same day, Tinn wrote to
Hoffman offering to buy on same terms. The issue was whether simultaneous cross-offer
could be formed into a contract. It was held by five judges against two that no contract had
been concluded as the parties were not ad idem.
Furthermore, s 5(1) of CA 1950 states that a proposal may be revoked at any time before the
communication of its acceptance is complete as against the proposer, but not afterwards. This
section must be read with s 4(2)(a) of CA 1950 on the communication of acceptance as
against the proposer. Reading both sections together, an offer may be revoked at any time
before acceptance has been sent to proposer. S 4(3) of CA 1950 provides that the
communication of revocation is complete as against the person who makes it, when it is put
into a course of transmission to the person to whom it is made and as against the person to

whom it is made, when it comes to his knowledge. In other words, the communication of
revocation of offer is complete as against proposer when he has sent out notice of revocation
while complete as against offeree when the person receives notice of revocation. For
example, in Byrne & Co v Leon Van Tienhoven & Co. [1874-1880] All ER 1432, the
defendants posted a letter in Cardiff on October 1 to the plaintiffs, offering to sell 1000 boxes
of tinplates. On October 8, the defendants posted a letter revoking the offer. The plaintiffs
telegraphed acceptance on October 11 and the letter of revocation reached on October 20. It
was held that the revocation was inoperative until October 20 and that the offer continued to
be open up that it had been accepted by the plaintiffs.
Lastly, an acceptance to be effective must be communicated. As provided by s 4(2) of CA
1950, the communication of an acceptance is complete as against proposer when it is put in a
course of transmission to him and as against the acceptor when it comes to the knowledge of
proposer. For instance, in Brogden v Metropolitan Railway Co (1877) 2 App Cas 666, the
defendants had supplied the plaintiffs with coals for some years and the defendants suggested
to enter into a contract. Subsequently, the defendants declined to continue the supply of coals
and denied existence of any contract. House of Lords held that the act of plaintiffs agent
putting document on desk does not amount to communication of acceptance.
Other than that, the example of case is Carlil v Carbolic Smoke Ball Co [1892] 2 QB 484;
[1893] 1 QB 256. By the provisions of s 7(b) of CA 1950, it provides that acceptance must be
communicated according to the method specified in an offer. If no mode is specified,
acceptance by any reasonable manner as to show intention to accept is sufficient.
In short, the legality of communication in making offer, acceptance and revocation has
certain requirements to be met under Contracts Act 1950. Also, the complete communication
of each is divided into parts of proposer and acceptor.

Question 5
Write a commentary (include the summary of facts, legal issues and judgments) for the
following cases:
1. Offord v Davies & Anor, [1862] CBNS 748; 142 ER 1336
Facts:
The defendant guaranteed to secure moneys advanced to a third party on discount for the
space of 12 calendar months.
Issue:
Whether the defendants had a right to revoke the promise?
Judgements:
Erie CJ stated:
the demurrer raises the question whether the defendants had a right to revoke the
promise. We are of opinion that they had This promise by itself creates no obligation. It
is in effect conditioned to be binding if the plaintiff acts upon it, either to the benefit of
the defendants, or to the detriment of himself. But, until the condition has been at least in
part fulfilled, the defendants have the power of revoking it.
Hence, the offer could be withdrawn within the specified period unless it had been acted
upon. The revocation of an offer must generally be communicated to the other party
otherwise it will not be a valid withdrawal and the other party will still be able to accept.
2. Abdul Rashid v Island Golf Properties Sdn Bhd [1989] 3 MLJ 376
Facts:
The plaintiff applied to become a member of the golf club owned, managed and operated
by the defendants.
Issue:
Whether application for club membership was an offer, or was the offer made by the club
after considering the application?
Judgement:
Wan Adnan J stated:
In my view the plaintiff's application for membership was merely a preliminary step.
The offer for membership came from the defendants after the defendants had considered
the plaintiff's application. The contract between the plaintiff and the defendants was
formed only when the plaintiff accepted the offer by making the payment of the entrance
fee and the first subscription
3. Aberfoyle Plantations Ltd v Khaw Bian Cheng [1960] MLJ 47, PC (Appeal from
Malaysia)

Facts:
A purchase had been made conditional on the renewal of certain leases. Accordingly the
successful negotiation of those renewals with a third party had been made a condition of
the contract. The consequences of failure had been spelt out in detail. All depended upon
the true construction of the agreement in question. Until the condition was purified, there
was no contract of sale to be completed.
Judgement:
Lord Jenkins stated:
But, subject to this overriding consideration, their Lordships would adopt, as warranted
by authority and manifestly reasonable in themselves, the following general principles: (i)
Where a condition or contract of sale fixes a date for the completion of the sale, then the
condition must be fulfilled by that date; (ii) where a condition or contract of sale fixes no
date for completion of the sale, then the condition must be fulfilled within a reasonable
time; (iii) where a condition or contract of sale fixes (whether specifically or by reference
to the date fixed for completion) the date by which the condition is to be fulfilled, then the
date so fixed must be strictly adhered to, and the time allowed is not to be extended by
reference to equitable principles.
In the absence of any contrary indication, a date fixed by a contract subject to a condition
precedent, for performance of a duty must be strictly adhered to, and the time allowed is
not to be extended by reference to equitable principles.
4. Affin Credit (Malaysia) Sdn Bhd v Yap Yuen Fui [1984] 1 MLJ 169, FC
Facts:
The appellant let a motor-car to the respondent under a hire-purchase agreement. The
respondent fell into arrears with the payment and the appellant brought an action for the
balance outstanding under the hire-purchase agreement. The respondent alleged that the
appellant had failed to comply with various provisions of the Hire-Purchase Act 1967
(Rev 1978) Act 212.
Issue:
Whether non-compliance with s4(1) of the Hire-Purchase Act, which requires the owner
of the goods to the prospective hirer a written agreement consisting of a summary of the
hirer's financial obligations under the proposed hire-purchase agreement, would render a
the hire-purchase agreement void ab initio?
Judgement:
The Federal Court held that the fulfilment of the condition set out in s 4(1) of the HirePurchase Act was a condition precedent for the hire-purchase agreement :

 the plaintiff's claim was rightly dismissed by the lower court, not because the hirepurchase agreement was unenforceable, but because no agreement had in fact been
entered into by the parties.
5. Ahmed Meah & Anor v Nacodah Merican [1890] 4Ky 583
Facts:
An agreement was made between the parties whereby, in consideration of the plaintiff
marrying the defendant's daughter, the defendant promised to build and the plaintiff and
his daughter a "house which must be a suitable building. The plaintiff sought specific
performance of the agreement.
Judgement:
Pellereau J stated:
There must be certainty as to the subject of the contract. If it is uncertain as to the nature
of the house to be built, if uncertain as to value, it would be difficult for the Court to
enforce itThe Court is left in doubt as to what way it is to be suitable I therefore hold
the promise is void fix uncertainty, and cannot be deemed to be specifically performed. I
can give no damages for the same reason.
6. Am Financings Ltd v Stimson [1962] 1WLR 1184, CA.
Facts:
The defendant at the premises of a dealer signed a form by which he offered to take a car
on HP terms from the plaintiffs. He paid a deposit and was allowed to take the car away.
He was dissatisfied with it and returned it to the dealer, saying he did not want it. The car
was stolen from the dealer's premises and damaged. The plaintiffs, not having been told
that the defendant had returned the car, signed the HP agreement.
Judgement:
The Court of Appeal held:
(a) that the defendant had revoked his offer by returning the car to the dealer. (b) In view
of an express provision in the form of the contract that the defendant had examined
the car and satisfied that it was in good order and condition, the offer was conditional
on the car remaining in substantially the same condition until the moment of
acceptance. That condition not being fulfilled, the acceptance was invalid.
7. Beca (Malaysia) Sdn Bhd v Tan Choong Kuang & Anor [1986] 1 MLJ 390
Facts:
In this case the appellants were housing developers and the respondents were the buyer.
The respondents had agreed to buy three units of flats from the appellants. The
respondents then paid a deposit of $20,000.00. The deposit was made before the
appellants received the issuance of the Developers Licence. The respondents refused to

sign the Sale and Purchase Agreement and claimed for refund for the deposit that they
had paid.
Issue:
Whether contract voidable or not?
Held:
Lee Hun Hoe CJ (Borneo) held that the deposit was meant to be a booking fee and not
part of the payment. The appellant had not obtain the licence permit at the time of
collecting the respondents deposit. Thus, the appellant were not authorized to collect the
deposit. Therefore, the appellant should make the refund of the deposit. The agreement in
this case was valid but was voidable at the instance of the buyers. Since the buyers had
elected to avoid the agreement by not signing the contract. Hence, they were entitled to
claim for the return of the deposit.
8. Blackpool and Fylde Aero club v Blackpool BC [1990] 3 All ER 25, CA
Facts:
The defendant council owned an airport and granted concessions to operate flights. It sent
an invitation to tender to the plaintiff and the other six parties whom are all connected to
the airport. The invitation to tender stated that it must be submitted in the envelope
provided and sent before the deadline. Those who sent after the deadline would not be
considered. The plaintiff sent the tender in time to the post box but the post box was not
cleared. The tender were then marked late when it reached the defendant and was not
considered.
Issue:
Whether there was any contract between the parties?
Held:
Bingham LJ held that the defendant was liable for damages for breach of contract. The
appeal by the defendant was dismissed. The court of appeal stated that in certain situation,
an invitation to tender can give rise to a binding obligation to consider tenders which
conform with the conditions of the tender. From the case above, the invitation to tender
set out a clear, orderly and familiar procedure. Thus, the tenderer who submitted a tender
conforming to the deadline should have it considered.
9. Bradbury v Morgan [1862] 1H&C 249; 158 ER 877

Facts:
JM Leigh requested Bradbury & Co to give credit to HJ Leigh. JM Leigh guaranteed his
brothers account to the extent of 100. Bradbury thereafter credited HJ Leigh in the usual
way of their business. JM Leigh died but Bradbury, having no notice or knowledge of his
death, continued to supply HJ Leigh with goods on credit. JM Leighs executors
(Morgan) refused to pay and said that they were not liable as the debts were contracted
and incurred after the death of JM Leigh and not in his lifetime.
Issue:
Whether there is a contract between Bradbury and Morgan?
Held:
Channell B held that it is a contract, and if so, it is not revoked by the death of the
guarantor. A mere authority is determined by death. Death does not generally operate as
revocation but only in exceptional cases, and this case is not within them. Thus, there is a
contract and Morgan is liable.
10. Byrne &Co v Leon Van Tienhoven &Co. [1874-1880] All ER 1432
Facts:
The defendant posted a letter on Cardiff on October 1 to the plaintiffs in New York,
offering to sell 1000 boxes of tinplates. It should be noted that it takes 10 to 11 days for
the posted letter to reach each other. On October 8, the defendants posted a letter revoking
the offer. The plaintiff telegraphed their acceptance of the offer on October 11 and
confirmed it on a letter posted on October 15. The revocation letter reached the plaintiffs
on October 20.
Issue:
Whether the revocation is allow or not?
Held:
Lindley J held that the revocation was inoperative because the plaintiff did not receive it
yet until October 20. The plaintiff have accepted to the offer before the revocation. Thus,
it may be taken now as settled that where an offer is made and accept by letters sent
through the post. The contract is completed when the moment the letter accepting the
offer is posted. Therefore, revocation is not allow as revocation can only be done before
the acceptance of the offer.
11. Carlill v Carbolic Smoke Ball Co [1892] 2 QB 484, QB; [1893] 1 QB 256, CA.

Facts:
Carbolic Smoke Ball Co. (the defendant) manufactured and sold The Carbolic Smoke
Ball. The company placed advertisement in various newspapers offering a reward of 100
pounds to any person who used the smoke ball three times per day as directed and
contracted influenza, colds, or any other disease. After seeing the advertisement Carlill
(the plaintiff) purchased a ball and used it as directed. Carlill contracted influenza and
made a claim for the reward.
Issue:
Whether there is a binding contract between the parties?
Held: (Court of Appeal)
Lindley LJ:

The advertisement was not mere puff, because of this statement 1000 is deposited
with the Alliance Bank, showing our sincerity in the matter. This stated that the

company had proof and show the sincerity to pay.

Promise is binding even though not made to anyone in particular like a unilateral
offer. An offers to anybody who performs the conditions accept the offer.

His Lordship noted the argument that this was a 'nudum pactum' and there was no
advantage to the defendants in the use of the ball. His Lordship rejected this
argument, stating:

'It is quite obvious that in the view of the advertisers a use by the public of their remedy,
if they can only get the public to have confidence enough to use it, will react and produce
a sale which is directly beneficial to them. Therefore, the advertisers get out of the use an
advantage which is enough to constitute a consideration.'
His Lordship also observed that a person who acted upon this advertisement and accepted
the offer, put himself to inconvenience at the request of the defendants. This alone was
sufficient to constitute consideration.
Bowen LJ:

His Lordship noted that the advertisement constituted an offer. On the defendants'
contention that the terms of that offer were too vague to constitute an offer. His
Lordship observed that it was necessary to read this advertisement in its plain
meaning, as the public would understand it.

AL Smith LJ:

His Lordship noted that the advertisement clearly contained a request for those who
read it to perform an act (use the smokeball) and sincerity was demonstrated by
lodging money at the bank. This was not a 'mere expression of confidence in the
wares' of the defendant, but was 'an offer intended to be acted upon'.

Appeal dismissed.
12. Cheng Keng Hong v Govern of the Federation of Malaya [1966] 2 MLJ 33
Fact:
The Chief Architect of the Ministry of Education had issued a notice inviting tenders for
the erection of a school. The applicants tender was accepted. Later the applicant
discovered that the specification for electrical service was at variance with the layout
drawings. The applicant thus wrote to the Chief Architect. He received a reply from a Mr
Hewish (who was an architect appointed to supervise the work) for the Chief Architect
that extra payment would be paid for fittings, other than those specified in the
specifications. The government refused to pay.
Issue:
Whether the contract was valid without condition stated.
Held:

The court held that although Mr Hewish had no authority to sign the letter for the
Chief architect, the respondents had by their conduct represented to the applicant that
Mr Hewish had the authority to act on their behalf and consequently the respondents
were bound by their acts to the same extent as if he had the authority. Therefore, in the

circumstances the respondents were stopped from disputing the authority of Mr

Hewish.

Raja Azlan stated,

The law with regard to acceptance of a tender is perfectly clear. The unconditional
acceptance of a tender by the employer binds the parties and a contract is thereby
formed
13. Coelho v The Public Services Commission [1964] MLJ 12
Fact:
The applicant, a Health Inspector under the Town Board, Tanjong Malim, applied for the
post of Assistant Passport Officer in the Federation of Malaya Government Oversea
Missions advertised in the Malay Mail dated 19 February 1957. Consequently, the
applicant was informed that he was accepted and, after undergoing training, he was
posted to the Immigration Office, Kuala Lumpur, where he remained until December
1958 when he was transferred to the Immigration Office at Johor Bahru.
On 5 November 1959, the Secretary to the Public Services Commission in a letter
addressed to the applicant as Assistant Passport Officer on Probation informed him that,
following a report from the Controller of Immigration concerning his conduct in the
irregular issue of certain passports, disciplinary action was being taken against him with a
view to his dismissal. The applicant made representation as invited by the said letter and,
on 24 December 1959, the applicant was informed that the respondent had decided that he
should not be dismissed but that his appointment on probation be terminated forthwith by
payment of one months salary in lieu of notice.
Issue:
Whether the application made by the appellant could be an offer.
Held:

The court held that the advertisement is an invitation to treat and the resulting
applications were offers.

The information conveyed to the appellant was an unqualified acceptance.

Thus, there was a valid contract of employment. The termination of the applicant on
probation is illegal.(unconditional offer)
14. Dickinson v Dodds [1876] 2 Ch D 463, CA
Fact:
On Wednesday, June 10, 1874 Dodds (the defendant) sent Dickinson (the plaintiff) a
memorandum in which he agreed to sell a specified piece of land for 800 pounds with the
offer held open until 9AM the following Friday. Dickinson alleged that he had decided to
accept Dodds offer on Thursday morning but did not contact him immediately because
he thought he had until Friday morning to accept. On Thursday afternoon Dickinson
learned that Dodds had offered or agreed to sell the land to a third party. Dickinson wrote
a note accepting the offer and delivered it to his home, leaving it with his mother-in-law
who neglected to give the note to Dodds. On Friday morning before the original deadline
to accept the offer, both Dickinson and his agent gave Dodds a written acceptance of the
offer. Dodds stated that he had already sold the land to another party the previous day.
Dickinson sued for specific performance. The trial court found in Dickinsons favor and
ordered that Dodds convey the property to him and Dodds appealed.
Issue:
Whether a promise to hold an offer open is binding where the other party does not accept
until after he learns that the offeror has already conveyed the property.
Held:

The offer had been effectively revoked. Therefore no contract existed between the
parties. There was no obligation to keep the offer open until Friday since the claimant
had provided no consideration in exchange for the promise.

The offeror is free to withdraw the offer at any time before acceptance takes place
unless a deposit has been paid.

15. Fisher v Bell [1961] 1 QB 394

Facts:
The defendant had a flick knife displayed in his shop window with a price tag on it. The
Restriction of Offensive Weapons Act 1959 made it an offence to offer such a knife for
sale. The defendant argued that a display of anything in a show window is simply an offer
to treat and this means that, under contract law, it is the customer who makes the offer to
buy the knife. The offer is instead made when the customer presents the item to the
cashier together with payment. Acceptance occurs at the point the cashier takes payment.
Issue:
Whether displays of good amount as to an offer for sale?
Held:
High Court:
The Prosecutor submitted that the Defendant has displayed the knife and ticket in the
window with the object of attracting a buyer, and that this constituted an offer of sale
sufficient to create a criminal liability under section 1(1) of the Act. The Defendant
submitted that this was not sufficient to constitute an offer. The judges at first
instance found that displaying the knife was merely an invitation to treat, not an offer, and
thus no liability arose. The Prosecutor appealed the judges' decision.
Court of Appeal:
The court held that the display of the knife in the window was indeed only an
invitation to treat, and the knife had not been offered for sale. In the Keating and
Wiles cases the Acts in question allowed a conviction where an item was exposed for
sale. That did not apply here.

Parker LJ:
His lordship had clearly clarified his explanation by stating:

It is perfectly clear that according to the ordinary law of contract the display of an
article with a price on it in a shop window is merely an invitation to treat. It is in no sense
an offer for sale the acceptance of which constitutes a contract.
Appeal dismissed.
16. Harris v Nickerson [1873] LR 8 QB 286
Fact:
The defendant, an auctioneer advertised a sale of certain goods including certain office
accessories of a certain date at a particular place. The plaintiff then travelled to the said
location and he discovered that the office accessories had been withdrawn from the sale.
The plaintiff sought damages because the defendant had breached the contract based on
the argument that the advertisement was an offer and his presence at the sale was an
acceptance.
Issue:
Whether the plaintiff could bring action against the defendant.
Held:

The plaintiff could not maintain the action as the notice of auction was merely a
declaration of an invitation to treat and did not constitute a promise to potential
bidder.

The court also ruled that in a sale by auction without reserve, the vendor cannot
bid at the auction.

17. Dunlop v Higgins [1848] 1 HL Cas 381

Facts:
Dunlop and Company offered by post to sell 2000 tons of pig iron at some price. The
offer was sent on 28/1/1845 and reached Higgins on 30/1/1845. Higgins posted letter of
acceptance on same day but the defendant received it on 1/2/1845 with some delay which
is cause by the post office. The defendant refused to supply the goods as the price of the
pig iron have increased.

Issue:
Whether the letter of acceptance posted by Higgins on 30/1/1845 constitute an acceptance
to the offer made by Dunlop & Co. ?
Held:
1) It was held that the acceptor was not responsible for any delay in the course of transit.
2) The posting of a letter accepting an offer constitutes a binding contract even if the
letter never arrives due to the fault of the post office.
18. Harvela Investments v Royal Trust Co. Canada (CI) Ltd & Ors, All ER 65, CA
[1985] 2 All ER 966, HL
Fact:
The plaintiff and the second defendant were rival offerors for a parcel of shares which
would give effective control of a company to whichever was the successful purchaser.
The parcel was held by the first defendant, who invited both parties to submit confidential
telex a single offer for the whole parcel by a stipulated date. The vendors stated that they
bid to accept the highest offer received by them which complied with the term of the
invitation. The plaintiff tendered a bid of $2,175,000. The second defendant tendered a
bid of $2,100,000 or $101,000 in of any other offer expressed as a fixed monetary
amount, which is the higher. The vendors accepted the second defendants bid which are
$2,276,000 and entered into a contract with the defendant for the sale of the parcel of
shares. The plaintiff commenced proceedings against the first and second defendants,
contending the defendants bid was invalid.
Issue:
Whether the telex inviting tenders should be treated as an invitation to treat or offer?
Held:
Lord Templeman 1) The court of appeal held that the second defendants bid was higher and was therefore
the successful bid.
2) It was held that the telex was not a mere invitation to treat. In the case, the House of
Lords took a new approach, the two-contract approach where Lord Diplock used the
term synallagmatic contract.

19. Mawn Works & Trading Sdn Bhd v Phang Hon Chin & Anor [1976] 2 MLJ 177
Facts:
The defendants who were owners of a piece of land had given an open-dated option to
purchase the land to plaintiffs. The plaintiffs exercised the option but the defendants
claimed that the option had expired.
Issue:
Whether the offer was lapsed since no time was fixed?
Held:
Hashim Yeop A Sani J- Since no time was fixed, the offer would lapse after the
expiration of a reasonable time not because this must be implied in the offer but
because failure to accept within reasonable time implies rejection by the offeree. As a
consequence, the court can take into account the conduct of the parties after the offer
was made in deciding whether the offeree has allowed too long time lapse before
accepting.
20. MN Guha Majumder v RE Donough [1994] 2 MLJ 114
Facts:
It was alleged that the defendant who advertised his property for sale, had accepted
the plaintiffs offer to purchase the property during the first visit. On the second visit
of plaintiff to the property, they had some discussion on the mode of payment. There
was also no clear agreement on the sale of orchid plants which the defendant wished
to sell separately, although the matter was discussed between the parties. The
defendant denied that he had decided to go on with the sale.
Issue:
Whether there was a contract existent between the plaintiff and defendant at the
material time?
Held:

BTH Lee J- The evidence indicated that the parties did not intend to be Immediately
bound. They had no necessary animus contrahendi (intention to contract). What
passed was only a negotiation from beginning to end.
21. Partridge v Crittenden [1968] 1 WLR 1204
Facts:
Partridge advertised live wild birds for sale in a periodical bird magazine. The
advertisement appeared in the classified advertisements section of the magazine.
Thus, Partridge was charged with offering live wild birds for sale.
Issue:
Whether the advertisement was an invitation to treat or an offer?
Held:
Ashworth J, High Court- The advertisement was only an invitation to treat because
nowhere was there any indication of an expression of invitation to be bound.
22. Payne v Cave [1789] 3 Term Rep 148
Facts:
Mr Cave made the highest bid for Mr Paynes goods at an auction. However, before
the auctioneer brought down his hammer, Mr Cave changed his mind and withdrew
his bid.
Issue:
Whether there was a contract formed when the defendant, Mr Cave bid?
Held:
Lord Kenyon CJ- The defendant was not bound to purchase the goods. His bid
amounted to an offer which he was entitled to withdraw at any time before the
auctioneer signified acceptance by knocking down the hammer.
23. Pharmaceutical Society of Great Britain v Boots [1953] 1 QB 401, CA
Facts:

The defendants carried business in the retail sale of drugs. Customers were free to
select the items which he wished to buy and would put them in the basket. Payment
was to be made at the exit where a cashier was stationed. In every case involving
drugs, a pharmacist supervised the transaction and was authorized to prevent a sale.
Issue:
Whether there was a sale when a customer selected items he wished to buy and placed
them in his basket?
Held:
Somervell LJ, Court of Appeal- The display even with prices marked, was only an
invitation to treat. A proposal to buy was made when the customer put the articles in
the basket. Hence, the contract would only be made at the cashiers desk. As such, the
defendants had not made an unlawful sale.
24. Preston Corpn Sdn Bhd v Edward Leong [1982] 2 MLJ 22, FC
Facts:
The appellant were a company carrying on business of publishing books. The respondents
were a firm of printers. The parties entered into a business relationship regarding printing of
school textbooks. There was an exchange of letters which commenced with the respondents
submitting quotations for the printing of books. This was followed by the appellants issuing
printing orders.
Issue:
Whether the respondents quotations constituted a binding offer which when accepted by the
appellants by the issuing of relevant printing orders, resulted in a contract between them?
Judgement:
Salleh Abas FJ (Federal Court) the quotations were never intended to be a binding offer but
was a mere supply of information. The offer in this case was actually constituted by the
printing offers issued by appellants.
25. Ramsgate Victoria Co v Montefiore [1866] LR 1 EX 109
Facts:
The defendant applied for shares in the plaintiff company in June and paid a deposit into the
companys bank. He did not hear from the company until the end of November when he was
asked to pay for the balance due for shares that had been allotted to him. His refusal to take

up the shares was upheld by the court on the ground that interval between June and November
was excessive. The defendants offer should have been accepted within a reasonable time.
Issue:
Whether the offer had lapsed after a reasonable time?
Judgement:
The offer was no longer open as due to nature of subject matter of the contract. The offer
lapsed after a reasonable time. Therefore, there was no contract and the claimants action for
specific performance was unsuccessful.
26. Spencer & Ors v Han & Ors [1868-1870] LR 5CP 561
Facts:
The defendants advertised a sale by tender of the stock in trade belonging Eilbeck & Co. The
advertisement specified where the goods could be viewed, the time of opening for tenders and
goods must be paid in cash. There is no reserve stated. The claimants sent a tender to the
defendants which following the submission of all tenders, was the highest tender. The
defendant submitted that it was merely a circular invitation to make offers and refused to sell
stocks to the claimants.
Issue:
Whether an invitation to tender is capable of being a contractual offer to sell to the highest
bidder?
Judgement:
Willes J It is not an offer, simply an invitation to treat. Therefore, the defendant did not need
to sell to the highest bidder as other factors may have been involved.
27. Tinn v Hoffman & Co. [1873] 29 LT 271, HL
Facts:
Hoffman wrote to Tinn offering to sell him 800 tons of iron at 69s per ton. On the same day
Tinn wrote to Hoffman offering to buy on some terms. The House of Lords discussed the
effect of two offers, identical in temrs, which had crossed in the post.
Issue:
Whether simultaneous cross-offers made in ignorance of each other could form a contract?

Judgement:
Blackburn J No contract had been concluded. The parties were not ad idem as the letters
contained diverse terms. Cross-offers could not form a contract.
28. Warlow v Harrison [1859] 1 E & E 309
Facts:
The defendant auctioneer publicly advertised the sale of horses by auction and issued printed
particulars of sale. The owners name was not disclosed. Condition 1 stated that the highest
bidder would be the buyer. The plaintiff attended the auction sale. When a horse named Jane
Pride was put up for sale, the plaintiff bid 60 guineas for her. Immediately, there was a bid
made over him of 61 guineas by her owner. The plaintiff claimed damages as being the
highest bona fide bidder.
Issue:
Whether is there a contract for sale between plaintiff and defendant?
Judgement:
Martin B (Court of Exchequer Chamber)
1) The sale announced by them is to be without reserve, it means that neither the vendor nor
any person in his behalf shall bid at auction.
2) There was a collateral contract between the auctioneer and the highest bidder, consisting of
an offer by auctioneer to sell to the highest bidder and an acceptance of that offer when the
bid was made.
3) The highest bid could not be rejected merely because it was not high enough.
Quain J It would be extremely inconvenient that an auctioneer is bound to give notice of
withdrawal or to be held liable to everybody attending the sale.

Question 6
Eric in Kuala Lumpur offers to sell 1000 tons of oil palm to Faizal at a certain price to
be shipped on the vessel MV Surabaya on 1 st March 19992 and arriving at Surabaya,
Indonesia on 10th March 1992. Faizal telephones from Surabaya to Eric accepting the
offer. However, Eric was not in the office at the said time. A tape recorder voice requests
Faizal to leave any message. Faizal said, I accept your offer. Eric returns to the office
and sends a telex to Faizal revoking his offer. Faizal receives the telex. Later Eric played
the tape and heard Faizals words of acceptance.
Is there a contract between Eric and Faizal and if so, where was the contract made?
The first issue in this case is whether the communication of an acceptance made by Faizal is
complete. The second issue is whether the communication of a revocation made by Eric is
valid.
Firstly, in the first issue, the case of Entores Ltd v Miles Far East Corporation [1955] 2
QB 327, CA may be referred. In this case, a series of communication passed by telex
between the plaintiffs in England and the defendants Dutch agents in Amsterdam, the
material one being a counter-offer made by the plaintiffs and an acceptance of that offer by
the Dutch company received by the plaintiffs in London by telex. The issue is whether the
contract was made in England or Holland. Denning LJ from the Court of Appeal held that the
communication through telex was instantaneous and thus the contract is only complete when
the acceptance is received by the offerer and the contract is made at the place where
acceptance was received in London.
Secondly, in Brinkibon Ltd v Stahay Stahl [1983] 2 AC 24, HL, an offer was made by telex
in Vienna and was accepted by a telex message from London to Vienna. The issue is whether
the contract was formed in Vienna or London. The House of Lords ruled that the contract was
made in Vienna, which was the place where acceptance was received. This shows that the
contract was only complete when the acceptance was received by the offeror in Vienna.
Thirdly, in Bhagwandas Goverdhanda Kedia v Girdhariai Parshottamdas and Co.
[1966] AIR SC 543, the plaintiff offered to get certain goods supplied at Ahmedabad to
defendants who accepted the offer at Khamgaon. The issue is whether the contract was
formed in Ahmedabad or Khamgaon. Shah J from Supreme Court of India held that when the
offer was made by the plaintiff by telephone conversation from Ahmedabad and the same was

accepted by the defendant by telephone conversation from Khamgaon, the contract is made at
Ahmedabad where the acceptance was received. This shows that the contract was only
complete when the acceptance was received by the offeror in Ahmedabad.
Based on the judicial decisions in three cases above, the communication through telex is
instantaneous. The rule about instantaneous communication between parties is different from
the rule about the post, whereby the postal acceptance rule stipulates that acceptance is
complete when the letter or telegram containing the acceptance is posted or handed in. Under
the rule of instantaneous communications, the contract is only complete when the acceptance
is received by the offeror and the contract is made at the place where the acceptance is
received. Thus, section 4(2)(a) of the Contracts Act 1950 (hereinafter referred to as CA
1950) which states 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
acceptor, is inapplicable in this case. Hence, by applying the rule of instantaneous
communication into our case, Faizals communication of acceptance is incomplete because
Eric played the type recorder voice and heard Faizals words of acceptance only after he has
revoked his offer.
Besides, in the second issue, S.4(3) of CA 1950 can be referred to. Under S.4(3)(a), the
communication of a revocation is complete as against the person who makes it, when it is put
into a course of transmission to the person to whom it is made, so as to be out of the power of
the person who makes it. Under S.4(3)(b), the communication of revocation is complete as
against the person to whom it is made, when it comes to his knowledge. This means that the
communication of revocation of proposal is complete as against the proposer who revokes,
when he has sent out the notice of his revocation. However, it will only be complete as
against the person to whom it is made when the said person receives the notice of revocation
of proposal.
Next, in Byrne & Co v Leon Van Tienhoven & Co [1874-1880] All ER 1432, the
defendants posted a letter revoking his offer of selling tinplates to the plaintiffs. The
plaintiffs, having not received the revocation, telegraphed their acceptance to the defendants.
The letter of revocation reached the plaintiffs few days after the acceptance had been made.
The issue is whether the withdrawal of offer had any effect before it was communicated to
the person whom the offer was made. Lindley J from the High Court ruled that the revocation
was inoperative until it had reached the plaintiffs.

Based on S.4(3) of CA 1950, the communication of revocation is complete as against Eric

when Eric sent a telex to Faizal revoking his offer. The communication of revocation is
complete as against Faizal when Faizal received telex. Based on the case of Byrne & Co. v
Leon Van Tienhoven & Co, the revocation was operative when Faizal received telex.
Moreover, it must be noted that S.5(1) of CA 1950 which sets out an offer may be revoked at
any time before the communication of its acceptance is complete as against the proposer, but
not afterwards is inapplicable in our case because our case is related to instantaneous
communication through telex and telephone, and not about the postal rule. Eric may revoke
his proposal even after the communication of acceptance of his proposal is complete as
against Faizal because he has not noticed the acceptance when making the revocation. In
short, the communication of revocation made by Eric is valid.
In conclusion, there is no contract exists between Eric and Faizal because the communication
of revocation made by Eric is valid.