Business Law
Proposal & Acceptance
Tutorial 2 & 3
Question 1

Ken is doing his weekly shopping for
groceries in Star supermarket. When would
the contract for the sale of ‘his’ groceries
come into existence?
(10 marks)
Answer

Identification of Issues


When does the contract between Ken and Star Supermarket come into existence?
Explanation of the law

State the legal principles



Explain that display of goods in supermarket shelves amounts to ITT with relevant cases:



Pharmaceutical Society of Great Britain v Boots Cash Chemist Ltd. (1953)
Fisher v Bell (1961)
Application of the Law


Define ITT: An invitation to enter into negotiation
State the difference between ITT and a proposal with relevant cases: The difference lies in the intention of the
parties
State when the contract takes place on the facts of the question i.e. who makes the ITT, who
makes the offer and when the contract is concluded
Concluding Advice

Contract is formed at the cashier
Question 2

Sony writes to Ron and offers to sell his
trumpet for RM800. One week later, Ron
writes to Sony accepting the offer despite
knowing that Sony had died in a tragic car
accident. Explain whether a contract exists
between Sony and Ron.
(10 marks)
Answer

Identification of Issues


Explanation of the law


Legal Principles – s6(d) CA 1950 states that a proposal is revoked by the death or
mental disorder of the proposer, if the fact of his death or mental disorder comes
to the knowledge of the acceptor before acceptance
Application of the Law


Whether there is a valid contract between Sony and Ron?
Application of the legal principles – Applying s6(d) CA 1950, Ron had knowledge
of Sony’s death before acceptance thus there is no contract between Sony and
Ron because the proposal is deemed to be terminated
Concluding Advice

No contract
Question 3

Pat lost her cat, Mimi. She advertised in the
newspaper offering to any person who
returns Mimi to her. Range found Mimi and
returned the cat to Pat but without knowledge
of the reward. Will range be entitled to the
reward upon reading about it in the
newspaper?
(10 marks)
Answer

Identification of Issues


Explanation of the law


S2(a) CA 1950, the word “signify” means proposal must be
communicated. S4(1) CA 1950 states that proposal is communicated
when it is brought to the knowledge of the acceptor as illustrated in the
case of R v Clarke (1927)
Application of the Law


Whether Range can claim the reward?
Applying s4(1) CA 1950, Range had no knowledge of the reward when
she returned the cat to Pat thus Range is not entitled to the reward
offered by Pat
Concluding Advice

No contract
Question 4

Merry promises his friend Pippin RM1000, if
Pippin stops smoking for a year. When Pippin
has not smoked for 3 months, Merry tells him
that the offer is withdrawn.
(10 marks)
Question 5

Ali sees a suitcase in a shop window with a
price tag of RM20. He goes into the shop to
buy the suitcase and is told that the wrong
label has been attached & that the price is
RM30. Advise Ali.
(10 marks)
Question 6

Describe the ways in which a contractual
offer can be brought to an end.
(15 marks)
Question 7

E offered to sell his car to F for RM3000 &
said, 'I will give you 3 days to make up your
mind.' Before the 3 days were up F heard
from a friend in casual conversation that E
had sold the car to X. F immediately posted a
letter accepting the offer. Advise F
(15 marks)
Question 8

Ah Long is a final year accounting student. He
wants to sell his laptop computer before the end
of February: On 14 Feb, Betty telephones Ah
Long and says, “There is no doubt that I could
afford to buy this laptop if I pay for it in 2
installments, but it would be very difficult for me
to pay RM3,000 now.” Ah Long does not reply
to Betty. What is the effect of the telephone call
made by Betty to Ah Long?
(15 marks)
Question 9

Albert has an assortment of shoes in his shop window,
each pair has a price tag on it showing the price of
RM10. Brenda sees a pair in the shop window and wants
to buy them. In the window is a large notice which reads,
‘Special offer, superb shoe sale, all untagged shoes
RM7’. Brenda asks Albert for a pair of tagged shoes for
RM10 and a pair of the RM7 shoes. Albert informs
Brenda there has been a mistake and the price on the
tagged shoes should read RM90 and the special offer
shoes are RM50.
Advise Brenda whether or not
she can have the shoes at the lower price.
(25 marks)
Question 10

Bo writes to Sam offering to sell his trumpet
for RM1,500. Sam accepts the offer but only
if the price is reduced to RM800. Bo is not
willing to sell the trumpet for RM800. Sam
then writes to Bo agreeing to buy the trumpet
for RM1,500. Advise Bo as to whether he is
bound to sell the trumpet to Sam.
(10 marks)
Answer

Identification of Issues


Explanation of the law



Acceptance must be absolute and unqualified as stated in s7(a) CA
1950
Case – Hyde v Wrench
Application of the Law


Is there a contract between Bo and Sam?
Discuss whether Sam’s offer is absolute and unqualified or is it a
counter-offer and what is the consequence
Concluding Advice

No contract
Question 11

H advertised in a variety of journals that an
auction of paintings would take place on 30
March. J attended the auction and bid
RM1000 for a painting. He changed his mind
and called out, ”Bid withdrawn”. The
auctioneer did not hear him and banged his
hammer for the third time. Advise H
(10 marks)
Q&A