Assignment 1.
Law Of Contract.
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SUBMISSION DATE: On or before 19/10/2012 (Friday).
Early submission of the assignment is very much appreciated.
Please send your answer via email to : norazlaabdulwahab@gmail.com
QUESTION 1
a) By letter dated 4th January 2012, Farah offered to sell her car to Lin for RM 50,000. Lin
received the offer letter on 6th January and replied by post stating that she accepted the
said offer. The reply letter did not reach Farrah. On 11th January, Farah sent a letter
revoking her offer. The letter of revocation reached Linn on 13th January. The letter of
acceptance was received by Farah on 14th January. Lin likes the car very much and is
anxious to know whether there is a binding agreement between her and Farah.
Advise Lin.
*** same like Mid Term Exam- postal rule- Issues: acceptance & revocation of offer.
1. Acceptance:
• S2(b) of CA provides: “when a person to whom a proposal is made signifies his assent
thereto, the proposal is said to be accepted; a proposal, when accepted becomes a
promise”.
• Postal Rule - parties have used the post as a mean of communication.
• s. 4(2)(a) of the Contracts Act 1950- communication of acceptance is complete against
the OFFEROR : put in the course of transmission to him.
• i.e.: Offeree post the LOA to Offeror.
• Illustration (b) of s4 : B accepts A’s proposal by a letter sent by post. The
communication of the acceptance is complete as against A, when the letter is posted.
• Entores Ltd v Miles Far East Corporation- When a contract made by post, the
acceptance is complete as soon as the letter of acceptance is put into the post box.
•
Ignatius v Bell- The D give option to P to buy his estate before or on 20 August and an
acceptance must be in writing. 16 August - P wrote the acceptance letter and post it. 25
August- D received the said LOA. P sued the D as D refused to honour the contract. The
court held that: the contract is valid as the parties agree to use postal service as a
manner of acceptance and it complete at the moment the said LOA was posted despite
the facts that the letter was reached late.
B) Revocation of Offer :
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S.5(1) of the CA :“ a proposal may be revoked at any time before the communication of
its acceptance is complete as against the proposer, but not afterwards”.
Section 6 (a) of CA: A Proposal is revoked:-Communication of notice of revocation by
the proposer to the acceptor;
communication of revocation of proposal is complete- Section 4(3)(a) of CA: on the
part of the offeror, when it is put into a course of transmission to the offeree. (A sent the
LORO to B)
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•
•
Section 4(3)(b) of CA: on the part of the offeree when it comes to his knowledge. (B
received the LORO from A)
Byrne v Van Tienhoven- The D offered to sell 1000 boxes of tinplate to the P. 1/10= D
posted a LO from Cardiff to the P in New York. 8/10= D posted a LOR to the P revoking
the offer. 11/10= P received the D's offer letter and at once posted his acceptance via
telegram. 15/10= P sent again the LOA to reconfirm his acceptance that made on 11/10.
20/10= P received the D's letter of revocation which is posted on 8/10.
The court held:There was a contract. Revocation of offer posted on 8/10 was not
effective till 20/10 ( when the P received the said LORO). At the meantime, P had
already accepted the offer on 11/10 (telegram).
Application:
The letter of revocation reached Linn on 13th January.
The letter of acceptance was received by Farah on 14th January.
Acceptance:
Lin received the offer letter on 6th January and made acceptance via post on the same day.
According to Postal Rule- the said acceptance is complete against Farah at the moment when
Lin posted the said letter of acceptance.
Revocation of offer:
11th January, Farah sent a letter revoking her offer
The letter of revocation reached Linn on 13th January.
According to s. 5(1) – revocation of offer must be done before Lin sent the letter of acceptance
to Farah.
According to s. 6 (a) + S. 4 (3) (a) & (b)-communication of revocation of offer is complete at the
moment when it has been sent by Farah and Lin will received it before she (Lin) make an
acceptance.
In this case, the LORO received by Lin on 4th February. Thus, the revocation of acceptance is
not complete.
If Farah want his LORO is effective, she must use speedy mode- telegram before LOA made by
Lin
Conclusion:
1. acceptance made by Lin is valid acceptance according to postal rule.
2. the revocation of offer made by Farah is not effective.
3. Thus, there is a valid contract between Lin and Farah and Farah can not simply sell the
said laptop to LIN
b) Give the meaning of consideration and its type. Further discuss on its exceptions under
Contract Law.
QUESTION 2
a) Galibel , a highly stressed rich widow, was enticed into joining a group; “Poverty as a
way of life” (PAWOL) by Trik, the leader of the group. Trik promised Galibel that by
transferring all her wealth to him, he would ensure that she is cleansed of all evil and
would not be burdened with any wordly problems. Believing his words, Galibel had
transferred all her wealth to Trik and stayed together with the other followers.
Two years after joining the group, Galibel realized that she had been tricked into parting
with her wealth and living like a pauper. She intends to get all her property back from
Trik.
Advise Galibel.
Issue:
Whether Galibel had given free consent when she made a transaction?
Laws:
S.10
S14 (b)
S. 16
Ingredients of S. 16 (1)
-domination of will
-obtaining unfair advantages
S. 16 (2)
-real & apparent authority
-mental capacity is affected.
Case: Salwath Haneem v Hadjee Abdullah & the decision of the court.
Inchee Noriah v Sheikh Allie Bin Omar
Application:
S. 16 (1)- Trik- leader of the PAWOL- dominant
-obtaining unfair advantages- Galibel transfer all the properties.
Conclusion:
Voidable- Undue Influence- S. 20-set aside the contract.
(You are expected to give write in details. These only the points!!!!!)
b) Explain briefly what is meant by discharge of contract under the law of contract and
elaborate on discharge of charge by agreement and frustration.