Law of Contract
Acceptance
COURSE LEARNING OUTCOME(CLO)
Summarize clearly
the basics
Malaysian Legal
System which
includes the
division and the
sources of
Malaysian Law
Illustrates
precisely the
position of the law
of contract and
law of agency and
related provisions
under the
Contract Act 1950
(Revised 1974)
Discuss
cooperatively the
law regarding
negotiable
instruments and
related provisions
under Bills of
Exchange Act 1949
( Revised 1978)
Movie Carlill v Carbolic Smokeball
Video
Conclusion:
Where a reward is offered to any person who
does a certain thing, it follows that any person
may accept.
It is clear that a party intends their words or
conduct to constitute an offer
The plaintiff was entitled to the 1000p as she
had accepted the offer made to the world at
large.
Defination of Acceptance
• S2(b) of Contracts Act laid down.
“when the person to whom the proposal is
made signifies his assent thereto, the
proposal is to be accepted a proposal,
when accepted, becomes promise”
Defination of Acceptance
Section 2(c)of the
Contract Act 1950
Refers to the person
accepting the
proposal as the
‘promisee’
Section 9 of the Contracts Act
• There is an
expressed
acceptance if the
acceptance of any
promise is made in
words
• An implied
acceptance if the
acceptance is made
other than in words.
Rules Regarding Acceptance
Acceptance
of an offer
may be
made orally
How
Made
Acceptance of
an offer may
be made by
conduct
Acceptance
of an offer
may be
made writing
Manner of an Acceptance
S7(a) of the Contracts Act
Must be absolute
Must be unqualified
This means that the acceptances must be
absolute and must conform exactly with the
terms of the offer. Thus if the offeree is
required to perform an act or to pay a sum
money, the act must be performed or the
sum mentioned paid exactly
Neale v Merrett
M offered to sell land to N for 280p. N
replied purporting to accept and
enclosed 80p, promising to pay the
balance of 200p by monthly
instalments of 50p each.
Held:
That N could not enforce acceptance
because his acceptance was not an
unqualified one.
Hyde v Wrench
A purported acceptance which is
qualified by the introduction of a new
term may be considered by the courts
as a counter-offer destroying the
original offer
Manner of an Acceptance
S7(b) of the Contracts Act
Be expressed in some usual and reasonable
manner
Unless the proposal prescribes the manner in
which it is to be accepted.
The proposer cannot
prescribed silence as a
manner of acceptance.
Felthouse v Bindley
Acceptance must be
made within a
reasonable time
Ramsgate Victoria Hotel Ltd v Montefiore
M applied for shares on 8 June but he was
not told until 23 Nov that his offer had been
accepted and that shares had been allotted
to him and the balance owing on the shares
was now due. M refused to pay and the
company threatened to sue alleging breach
of contract.
Held:
The offer to purchase shares had not been
accepted within a reasonable time and the
offer had therefore lapse. There was no
contract created
Law School Musical
Video
Song: The Offers Real
Video
Acceptance by Post
S4(1)
An offer has
no effect until
it reaches the
offeree
Not when the
letter is
posted
Acceptance by Post : the communication of
an acceptance is complete:
S4(2)(a)of the
Contracts Act
S4(2)(b)of the
Contracts Act
• 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
• As against the acceptor, when
it comes to the knowledge of
the proposer
Murni wrote
offering to sell
her house at a
price of
RM150.000.
As against Murni when
letter of acceptance is
posted by Mamat
The comunication of the
acceptance is complete
Mamat accepts
Murni’s poposal
by a letter sent
by post.
As against Mamat
when letter of
acceptance is
received by Murni
Adam v Lindsell
On 2 Sept, A wrote offering to
sell wool at a price, and
requesting an answer in course
of post. The letter was
misdirected and reached L on 7
Sept. The reply of acceptance
was send at once and reached
A on 9 Sept, but the wool had
been sold on 8 Sept
Held:
That there was agood contract
between A and L because the
offer was accepted at once on
being received
Where an offer is made and
accepted by letters sent through
the post, the contract is made the
moment the letter accepting the
offer is posted, eventhough it
never reaches its destination
For the above rules to apply, the
letter of acceptance must be
prepaid,properly addressed and
properly posted. The handling of
aletter to a postman is not a
proper posting.
REVOCATION OF A PROPOSAL AND AN
ACCEPTANCE
Section
5(1)
• The proposer may revoked at any time
before the communication of its
acceptance is complete as against the
proposer, but not afterwards
S 5(2)
• An acceptance may be revoked at any
time before the communication of
acceptance is complete as against
acceptor, but not afterwards.
A propose, by a letter sent by
post, to sell his house to B
B accepts the proposal by a
letter sent by post
A may revoke his proposal at any
time before B posts his letter of
acceptance, but not afterwards
B may revoke his acceptance at
any time before when the letter
communicating it reaches A, but
not afterwards
COMMUNICATION OF A REVOCATION
Section 4(3)(b) of the Contract Act
The communication of a revocation is complete: as
against the person who makes it is put a course of
transmission to a person to whom it is made, so as to
be out of power of person who makes it and against
to whom it is made, when it comes to his knowledge
COMMUNICATION OF A REVOCATION
A revokes his proposal by telegram.
The revocation is complete as against
A when the telegram is despatched. It
is complete as against B when B
receives it..
B revokes his acceptances by telegram.
B’s revocation is complete as against B
when the telegram is despatches. It is
complete as against A when A receives it.
Let’s do some
exercises!
Question: Drinks Machine Contract
Video
Mama Miaw advertised in a newspaper, an
offer of reward of RM1.000 for the return of her
Persian cat. Adik was on the way to school
when he found the Persian cat. He recognised
the cat and returned it to Mama Miaw. Two
days later, he read the newspaper and learnt
about the reward advertised by Mama Miaw.
He wants to claim the reward. Advise Adik.
A customer shopping at a supermarket makes a
valid contract with the retailer when
a)
she puts the goods in the trolley.
b)
she gives the goods to the cashier.
c)
the cashier accepts payment for the goods.
d)
she collects the goods after paying for them.
.
An offer is
a) a proposal made by the
offeree
b) a proposal accepted by
the offeror
c) a proposal made by the
offeror
d) a proposal accepted by
the promisor
On 1st February 2010, Ben wrote to Roy
offering to sell his cat, Awie, at the price of
RM2000.
Ben gave Roy until 10th February to accept his
offer. Roy received the letter on 3rd February
2010 and posted the letter accepting Ben's offer
on 9th February 2010. Ben however has
changed his mind in selling Awie. He posts a
letter to Roy on 7th February 2010 revoking his
offer. Roy received the letter of revocation on
10th February 2010 and Ben received Roy's
letter of acceptance on 12th February 2010.
Advise Roy on whether a contract has been
constituted.
Closing: Powerful Inspiration True Story &
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