TOPIC REVIEW 2

Question 1

On Monday, Popeye hand delivers to Olive a letter states, I am willing to

sell to you 100 ounces of gold at RM400 per ounce. Determine whether the
parties have a contract in each of the following situations:

a) On Tuesday, Olive mails a letter that states, I accept your offer. On

Wednesday, Popeye contacts Olive by telephone and says, I am revoking my
offer. On Thursday, Popeye receives Olives letter of acceptance.

Popeye make an offer to Olive as he hand delivers the offer letter stated that he
willing to sell 100 ounces of gold at RM400 per ounces to Olive on Monday. Olive accepted
Popeyes offer and mailed his letter of acceptance the next day. The next following day,
Popeye however contacts Olive by telephone and revoked his offer. Olives letter of
acceptance was received by Popeye on Friday which is a day after Popeye had already
revoked his offer.

In Contract law, offer is the most basic elements of a contract. An offer or also known
as proposal is necessary the formation of an agreement. Section 2(a) of the Contract Act 1950
provides that when a person signifies another 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 or an offer. For a contract to be valid there must be a proper acceptance
by the offeree. Section 2(b) of Contract Act provides that when the offeree signifies his
accent to the offer, the offer is said to be accepted. Acceptance by post as happened in above
mentioned situation allowing the postal rule to be applied. Acceptance by post is deemed to
take effect when the letter is correctly addressed, properly stamped and placed into the post
box. Acceptance is therefore said to be complete as soon it is posted.

In this situation, offer was communicated and becomes valid on Monday. On

Tuesday, the moment when Olive mails his letter of acceptance, offeror is said to bind with
contract as per postal rule. This is because the offer was made by hand delivery. Therefore
Popeye cannot revoke his offer on Wednesday. On Thursday, when Popeye received Olives
letter the contract is completes.
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 b) On Tuesday, Popeye mails a letter that states, I revoke my offer. On
Wednesday, Olive mails a letter states, I accept your offer. On Thursday, Olive
receives the letter of revocation that Popeye mailed on Tuesday. On Friday,
Popeye receives the letter of acceptance that Olive mailed on Wednesday.

Popeye make an offer to Olive as he hand delivers the offer letter stated that he
willing to sell 100 ounces of gold at RM400 per ounces to Olive on Monday. Olive accepted
Popeyes offer and mailed his letter of acceptance the next day. The next following day,
Popeye however contacts Olive by telephone and revoked his offer. Olives letter of
acceptance was received by Popeye on Friday which is a day after Popeye had already
revoked his offer.

In Contract law, offer is the most basic elements of a contract. An offer or also known
as proposal is necessary the formation of an agreement. Section 2(a) of the Contract Act 1950
provides that when a person signifies another 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 or an offer. For a contract to be valid there must be a proper acceptance
by the offeree. Section 2(b) of Contract Act provides that when the offeree signifies his
accent to the offer, the offer is said to be accepted. An offer is too said can be revoked by the
offeror before it has been properly accepted.

In this situation, offer was communicated and becomes valid on Monday. The offer is
then properly accepted by Olive on Wednesday. Popeyes revocation on Tuesday only valid
on Thursday when Olive receives the letter as revocation is valid upon communication.
Therefore when olive sent her acceptance on Wednesday is valid and Popeye is bound with
contract.

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 c) On Tuesday, Olive mails a letter that states, I accept your offer. On
Wednesday, the gold market drop price of RM300 per ounces. On the same day,
Olive telephones Popeye and says, I reject your offer. On Thursday, Popeye
receives the letter of acceptance that Olive mailed on Tuesday.

Popeye make an offer to Olive as he hand delivers the offer letter stated that he
willing to sell 100 ounces of gold at RM400 per ounces to Olive on Monday. Olive accepted
Popeyes offer and mailed his letter of acceptance the next day. The next following day,
Popeye however contacts Olive by telephone and revoked his offer. Olives letter of
acceptance was received by Popeye on Friday which is a day after Popeye had already
revoked his offer.

In Contract law, offer is the most basic elements of a contract. An offer or also known
as proposal is necessary the formation of an agreement. Section 2(a) of the Contract Act 1950
provides that when a person signifies another 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 or an offer. For a contract to be valid there must be a proper acceptance
by the offeree. Section 2(b) of Contract Act provides that when the offeree signifies his
accent to the offer, the offer is said to be accepted. Acceptance by post as happened in above
mentioned situation allowing the postal rule to be applied. Acceptance by post is deemed to
take effect when the letter is correctly addressed, properly stamped and placed into the post
box. Acceptance is therefore said to be complete as soon it is posted. In such circumstances,
contract is deemed to be complete when the acceptance is actually received by the offeror.

In this situation, offer was communicated and becomes valid on Monday. When Olive
mails his letter of acceptance on Tuesday, Popeye is directly bound under postal rule. On
Tuesday, when Olive calls to revoke her acceptance it is possible as she is not bound with the
contract as Popeye has not receives his letter of acceptance. Olive is bound only when Popeye
receives the acceptance letter. Olives revocation is communicated on Tuesday, which is
before the letter of acceptance was properly received. Therefore the revocation is valid. On
Thursday when Popeye received the letter of acceptance it brings no effect as the acceptance
had been revoked earlier on.

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Question 2

Salleh is a wholesaler of basmathi rice. On 15 October 2014 Salleh entered into a

contract to sell 200 kgs of basmathi rice to Jacob and agreed to deliver the rice to
Jacob's shop premises on 20 October 2014. Jacob is a regular customer of Salleh and
has regularly bought basmathi rice from him. Jacob paid the purchase price for the 200
kgs of rice on 17 October 2014 in cash. On 18 October 2014 Salleh set aside 200kgs of
basmathi rice for delivery to Jacobs premises on 20 October 2014. On 19 October 2014
Jacob contacted Salleh and told him not to deliver the 200 bags until 22 October 2014
due to some problem at his shop. On 21 October 2014 after a particularly heavy
downpour Sallehs premises was flooded and Sallehs entire stock of basmathi rice,
including the 200kgs set aside for delivery to Jacob, were destroyed. Salleh contacted
Jacob on 23 October 2014 about the flood and told Jacob that he would not return
Jacobs above-mentioned payment. Jacob seeks your advice on the above matters.
(15 Marks)

Salleh is a wholesaler of basmathi rice and Jacob his regular customer. On 15 October 2014,
Salleh has make a contract sell of 200 kg of basmathi rice to Jacob. Salleh also agree to
deliver the 200 kg basmathi rice to Jacob premise on 20 October 2014. In this situation, an
contract of sale has been made between Salleh and Jacob and it is valid.

Jacob then made a full payment to his purchase of 200 kg basmathi rice on 17 October 2014
to Salleh. Then on the next day that is 18 October 2014, Salleh put a side 200 kg basmathi
rice for deliver to Jacob premise. This show that, Salleh has make his responsibilities to
handle with care Jacob purchases item before delivery been made.

Suddenly, on 19 October 2014, Jacob call Salleh and ask Salleh for not to made a delivery
until 22 October 2014. This is due to some problem at Jacob premise. Salleh agree with Jacob
and wait until 22 October 2014.

On the date 22 October 2014, Salleh premise were flooded and all of his stock were damage
include 200 kg basmathi rice that need to deliver to Jacob premise. Salleh then on the next
day call Jacob and told him about the flood. Salleh mention Jacob that he will not return
Jacob payment of 200 kg basmathi rice that Jacob purchases.

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This case is refer to Law of tort. The person who commits the tort is known as the
tortfeasor. When a tort is committed, the law allows the victim to claim compensation from
the tortfeasor. Based on what is happen to Jacob, the damage of basmathi rice is not
because of breach duty of Salleh, but it is because of natural disaster that is flood. Jacob
should be alert and prepared either to buy an insurance for his item purchases. If Jacob had
buy the insurance for his item purchases, then only he can claim compensation from Salleh.
Only one thing Jacob can do is make another purchases with Salleh. This is because, Salleh
have right to not pay back Jacob money. Salleh does not know the disaster will happen on the
date of 22 October 2014.

Jacob also cant claim the compensation because, in the contract, the delivery should had
been made on 20 October 2014, but Jacob told Salleh to send on 22 October 2014. This is the
factor that lead to the disaster that come without notice to Salleh premise. Salleh has full fill
the contract after he receive the full payment from Jacob, Salleh on the next day has put aside
200 kg basmathi rice that Jacob purchases. He also did remind in the contract the delivery is
on 20 October 2014. The contract is revoke because Jacob change the date of delivery a day
before 20 October 2014.