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Question

Offer
LAW416
Offer Must Be
Communicated
Business Law
Revocation of Offer Question3
When Offer Can Be Prepared by:
Revoked NUR ADILAH BT KAMARUDIN 2010224934
Communication of NOR’AFIQAH BINTI SHA’ARI 2010683206
Acceptance SITI NURBAYA BT MOHAMADIAH 2010880876
Nuruljannah Bte Said 2010270274
Postal Rule

Modes of Revocation
Prepared for:
Communication of Mr. Mohd Ab Malek Bin Md Shah
Revocation
Revocation of 12/08/2010
Acceptance
When Communication
of Acceptance Effective
Question
Question
Offer

Offer Must Be Badri sent a letter on 1st May 2007,


Communicated offering Busu to buy his car for RM35,000. Badri
Revocation of Offer then decided to revoke the offer by sending a
letter of revocation to Busu on 6th May 2007. Busu
When Offer Can Be
received the letter of offer on 4th May 2007. As he
Revoked
Communication of
was very much interested to buy the car, he
Acceptance posted the letter of aceptance to Badri on the
same day. The letter of revocation reached Busu
Postal Rule
on 8th May 2007.
Modes of Revocation
Discuss the position of Badri and Busu with
Communication of
reference to the Contracts Act 1950 and decided
Revocation
Revocation of
cases.
Acceptance
When Communication
of Acceptance Effective
Question OFFER
Section 2(a)
Offer
Contracts Art 1950 defines an offer as:
Offer Must Be Offer is a promise or proposal by one person
Communicated (offeror) to another person (offeree/promise) with
Revocation of Offer
the intention to create a legally binding relationship.

When Offer Can Be


Revoked
OFFER MUST BE COMMUNICATED
Communication of Section 4(1) states that
Acceptance communication of a proposal is complete when it
comes to the knowledge of the person to whom it is
Postal Rule made. If an offer is made but it has not come to the
knowledge of the offeree,the offer is hot effective
Modes of Revocation
yet.
Communication of Without communicating an offer,the offeree can’t
Revocation
make an acceptance as a person needs to have
Revocation of
knowledge of certain matter before he can decide
Acceptance
on it.
When Communication
of Acceptance Effective
Question

Offer REVOCATION OF OFFER


Offer Must Be
Communicated Revocation means to retract/cancel/withdraw.
In some situations,even though the offeror has
Revocation of Offer
already made an offer to the offeree,he may
When Offer Can Be change his mind and decides to withdraw the
Revoked offer.
Communication of
If the offer is validly revoked,there will be no
Acceptance
contract created.
Postal Rule

Modes of Revocation

Communication of
Revocation
Revocation of
Acceptance
When Communication
of Acceptance Effective
Question

Offer
WHEN OFFER
Offer Must Be CAN BE REVOKED
Communicated
An offer remains open until it lapses or is
Revocation of Offer withdrawn.
When Offer Can Be Section 5(1),
Revoked ‘A proposal may be revoked at any time before
Communication of any time before the communication of its
Acceptance
acceptance is complete as against the
Postal Rule proposer,but not afterwards’ .
Modes of Revocation Therefore once an acceptance has been
made,the offeror is no longer entitled to revoke
Communication of
Revocation
his offer.
Revocation of
Acceptance
When Communication
of Acceptance Effective
Question

Offer
CASES
Offer Must Be ROUTLEDGE V GRANT
Communicated Defendant offered to sell a house to the Plaintiff.
Revocation of Offer The acceptance was to be made within 6 weeks.
The question was whether the Defendant could
When Offer Can Be
Revoked revoke his offer before the weeks lapses.
Communication of It was held that the Defendant may revoke his
Acceptance
offer at any time within that 6 weeks on
Postal Rule condition that no acceptance had been made by
the Plaintiff.
Modes of Revocation

Communication of
Revocation
Revocation of
Acceptance
When Communication
of Acceptance Effective
Question COMMUNICATION
Offer OF ACCEPTANCE
Offer Must Be General rule, section 2(b):
Communicated An acceptance must be communicated to offeror.
Revocation of Offer Communicated acceptance must be something
more than mere mental assent
When Offer Can Be
Revoked
Keeping silent/accepting in heart does not amount
Communication of to an acceptance.
Acceptance
 Exception :
Postal Rule
In certain circumstances, actual communication is
Modes of Revocation not required even acceptance not physically made.
Communication of When offeror not insist on acceptance to be communicated.
Revocation Offeror allows offeree to fulfill conditions of the offer.
Revocation of Reciprocal promises.
Acceptance Postal rule.
When Communication
of Acceptance Effective
Question
POSTAL RULE
Offer

Offer Must Be  The general rule does not apply to an when


Communicated acceptance made by post.
 Once a letter of acceptance is posted, offeror is
Revocation of Offer bound from the time that it is posted even not
When Offer Can Be come to the knowledge or receives yet.
Revoked
Communication of  Section4(2):
Acceptance  Communication of acceptance complete when:
 As against the proposer, when its put in a course of
Postal Rule
transmission to him.
 As against acceptor when it comes to knowledge of
Modes of Revocation
the proposer.
Communication of  Although letter has not reached by the offeror, an
Revocation acceptance is valid and both are bound.
Revocation of
Acceptance
When Communication
of Acceptance Effective
Question

Offer
CASES
Offer Must Be INGATUS V BELL
Communicated The defendant offered to sell his land to the
Revocation of Offer plaintiff on condition that if the plaintiff would
like to accept the offer, the acceptance must be
When Offer Can Be
made on or before 20th August 1912. The
Revoked
Communication of
plaintiff sent the acceptance by registered post
Acceptance on 16th August 1912 but the letter only reached
the defendant on 25th August 1912. The dispute
Postal Rule
is whether there is a contract created as there
Modes of Revocation was a delay. The court held that the acceptance
was exercised by the plaintiff on 16th August
Communication of
1912 was a valid acceptance and the defendant
Revocation
Revocation of
was bound by a contract..
Acceptance
When Communication
of Acceptance Effective
Question

Offer
MODES OF REVOCATION
Offer Must Be Revocation can be made by any of the modes
Communicated provided under section 6 (a).
Revocation of Offer

When Offer Can Be


Under Section 6 (a) –By the communication of
Revoked notice of revocation by proposer / offeror to
Communication of the other party.
Acceptance
According to this provision, if the offeror decides to
Postal Rule
revoke his offer by giving a notice, the revocation of
an offer would only be effective after the notice of
Modes of Revocation
revocation had come to the actual knowledge of the
Communication of offeree. The notice here is not restricted to a
Revocation written notice. The offeror may also give a verbal
Revocation of notice of the revocation.
Acceptance
When Communication
of Acceptance Effective
Question

Offer
COMMUNICATION OF
Offer Must Be REVOCATION
Communicated
The communication of a revocation is dealt with
Revocation of Offer under Section 4(3) of the said Act which states:
When Offer Can Be
Revoked 4. (3) The communication of a revocation is
Communication of complete:
Acceptance
(a) as against the proposer, when it is put in a
Postal Rule course of transmission to the person to
whom it is made, so as to be out of the
Modes of Revocation power of the person who makes it and
Communication of (b) as against the person to whom it is made,
Revocation when it comes to his knowledge.
Revocation of
Acceptance
When Communication
of Acceptance Effective
Question
CASES
Offer BRYNE CO v VAN TIENHOVEN & CO
Offer Must Be Defendant offered to sell 1000 boxes of tinplates to the
Communicated plaintiff.

Revocation of Offer 1st Oct :D posted letter of offer in Cardiff to the P in NY


8st Oct :D posted a letter revoking the offer.
When Offer Can Be 11st Oct :P received the letter of the offer & sent
Revoked acceptance by telegram on same day
Communication of 15st Oct :P sent acceptance letter, to confirm the
Acceptance acceptance by telegram on 11th Oct
Postal Rule 20th Oct :P received the D’s letter of revocation which
was posted on the 8th Oct
Modes of Revocation
It was held there was contract between the parties.
Communication of The revocation of offer posted on 8th Oct was not
Revocation effective until 20th Oct when it was received by the
Revocation of P. In the meantime, the P had already accepted the
Acceptance offer on 11th Oct when the telegram was sent.
When Communication
of Acceptance Effective
Question

Offer
REVOCATION OF
Offer Must Be ACCEPTANCE
Communicated
Section 5 (2): An acceptance can be revoke at
Revocation of Offer any time before the communication of
When Offer Can Be acceptance is complete against the acceptor.
Revoked
Communication of Section 4 (2)(b): The communication of an
Acceptance acceptance is complete as against the acceptor
Postal Rule when it comes to the knowledge to the proposer.

Modes of Revocation Thus, an acceptance may be revoke at any time before


Communication of the letter reached the proposer. Once the proposer
Revocation receives the letter of acceptance, the acceptor no
Revocation of longer has the right to withdraw his acceptance.
Acceptance
When Communication
of Acceptance Effective
Question

Offer
CASES
Offer Must Be
DUNMORE V ALEXANDER
Communicated The letter of acceptance and the letter of
revoking the acceptance were received by the
Revocation of Offer
offeror simultaneously. It was held that the
When Offer Can Be acceptance had been effectively revoked by the
Revoked offeree. Therefore there was no contract.
Communication of
Acceptance

Postal Rule

Modes of Revocation

Communication of
Revocation
Revocation of
Acceptance
When Communication
of Acceptance Effective
Question
WHEN COMMUNICATION OF
Offer ACCEPTANCE AFFECTIVE
Offer Must Be Refer section 4(3)(a) & (b) stated earlier.
Communicated Illustration (d) to section 4 Contract Act 1950:
Example:
Revocation of Offer
1st January 2008 -A proposes, by telegram to sell his
When Offer Can Be hand phone at a price of rm500.
Revoked
Communication of 14 January 2008: the letter is posted.
Acceptance
Situation for A: The communication of a proposal is complete
Postal Rule when B receives the letters. B accepts A’s proposal by a letter
sent by post. The communication of the acceptance is
Modes of Revocation complete as against A. As such A cannot revoke his proposal.
Communication of
Situation for B: Upon posting the letters is not bound in
Revocation
contract until the letters is received by A. Thus B may revoke
Revocation of his acceptance at any time before the letter reached by A.
Acceptance
When Communication
of Acceptance Effective
Question

Offer
CONCLUSION
Offer Must Be The offeree has the advantage in 2 situations:
Communicated
1. He could post the letter of acceptance and
Revocation of Offer
thus stop the offeror from withdrawing or
When Offer Can Be revoking his offer.
Revoked
Communication of
Acceptance
2. In the meantime, he could revoke the
acceptance by using a speedier means
Postal Rule (telephone) of communication before the
letter of acceptance reaches the offeror.
Modes of Revocation

Communication of
Revocation
Revocation of
Acceptance
THE END
When Communication
of Acceptance Effective

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