Case Study: The Best Deal

Issue Statement

Law & Application

Usop decided to sell his car by parking it outside his house with a notice on the
windscreen which comprises information about his address and the specific price for
the car. Regarding to the legal principle of proposal, a proposal can be addressed to
a particular person or to a general public. Usop has made a proposal that has been
communicated to the general public by parking his car outside with a notice on the
windscreen which leads to the fact that the offer has been communicated to the
offeree so that there is a possibility of its acceptance.

Sarah has been the first person seeing the car and getting back to Usop. She
telephoned Usop from her work and suggested him a counter offer in the maximum
amount of RM8000,00. Following the legal principle, the counter offer has not been
accepted at that moment because Usop neither agreed nor disagreed with the
counter offer and with reference to felthouse v bindley, ‘Silence’ should not be
accepted as a form of acceptance. Due to the reason that Sarah has put in a new
condition while accepting, the offer already offered by the propose is not complete
until the Usop accepts the condition. This means that that the counter proposel must
have been accepted by Usop before a contract could have been made between
Sarah and Usop.

At 11:00 am, on the same day, Betty tried to call Usop’s but he did not answer the
phone so that Betty had to leave a message which comprises her assent against the
proposal of Usop. Section 7 (a) claims that the acceptance should be absolute and
unqualified to convert a proposal into a promise. Betty mentioned that she is
interested in buying the car and offered a cheque to Usop as well. This can be
interpreted as definite and without any doubts or confusion as well as having the right
knowledge which means that Betty has made a legal acceptance to the offer against
Usop.
Regarding to section 4(2) the communication of 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 (2) as against the acceptor when it comes to the
knowledge of the proposer. This means that the communication is completed if the
proposer has put its acceptance in a course of transmission and the acceptance is
communicated to offerer. Hence, an acceptance does not take effect until it is
communicated to the offeror. Betty agreed on the offer on Monday 11:15 am. On
Monday afternoon at 4:00pm Usop received the message of acceptance from Betty.
Following section 4(2) the communication of acceptance was completed and a
contract has been concluded between Usop and Betty on Monday 4:00 pm.

On Monday afternoon, Usop decided to agree to Sarahs counter offer by posting a

letter of agreement at 2:30 pm which should have reached Sarah on Tuesday
morning. The postal rule for general acceptances by post is that they take effect
when they are posted, rather than when they are communicated so that the
communication of acceptance is completed and a contract is concluded when the
acceptor has posted the letter of acceptance.

After Usop postet the letter of agreement to Sarah he received the message of
acceptance from Betty. Usop immediately called Sarah but only go to the answering
machine and left a message of revocation by telling her that he wants to revoke the
letter of acceptance which he posted the afternoon. By that point Usop was unable to
revoke the contract due to section 5 (1) which says that a proposal may be revoked
at any time before the communication of its acceptance is complete as against the
proposer, but not afterwards. The acceptance against the counter offer has been
completed after Usop postet the letter of agreement by post already.

At 2:15 pm, on the same day, Ramesh posted a letter of acceptance with a cheque
for RM8,750 but misaddressed his letter so that the letter reached Usop by Friday.
Following section 5 (1) the acceptance was completed at 2:15 already due to the
reason that Ramesh posted the letter by post. An acceptance by post takes effect
when it is posted, rather than when it is communicated.

This leads to the conclusion that Ramesh has secured the deal with Usop.

Conclusion