Person signifies to another his willingness to do or to abstain

Sec 2a- when 1 person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to the act or abstinence, he is said to make a proposal.

Sec 2c-person making the proposal the ‘promisor’.

Affin Credit(Malaysia) Sdn.Bhd. V Yap Yuen Fui

Sec 4(1)-the communication of a proposal is complete when it comes to the knowledge of the person to whom it is made.

Sec 3-communication of an offer or a proposal is deemed to hv been made by any act or omission of the party proposing by which he intends to communicate the proposal or which hse the effect of communicate it.

Sec 9-if a proposal is made other than in words (e.g. by conduct), it is said to be implied.

Advertisement-Invitation to treat

Coelho v The public services commission

Advertisement of bilateral contract are nt offers. E.g. gama advertisement sales.

Advertisement of unilateral contract are construed to be offers. E.g. missing dog notice,

They no need to call the owner to say tht they accept.

Invitation to treat include : auctions, advertisement of tenders, catalogues, price lists, goods displayed in shop windows and shelves.

Acceptance

Sec 2(b)-when a person show his assent, the proposal is said to hv been accepted. A proposal when accepted, bcm a promise.

Sec 2(c)-call the person accepting the proposal the ‘promisee’.

Sec 7-in order to convert a proposal into a promise the acceptance muz

be absolute and unqualified

some usual and reasonable manner

eg. If the parties are still negotiating, an agreement is not yet formed

case-lau brother & co v china pacific navigation co. ltd

‘-if acceptance is not absolute or unconditional, tht is, it does not follow the conditions-if any-stated by the offeror, it will amount to a counter-offer. Case-master v Cameron

A purported acceptance, which is qualified by the introduction of a new term may be considered by the court as a counter offer destroying the original offer. Case-Fraser v Everett

Sec 6(b)-a proposal is revoked by the lapse of time prescribed in the proposal for its acceptance. Ramsgate Victoria hotel co ltd v montefiore

Sec 7(b)-the proposer cannot prescribe silence as a manner of acceptance.

FELTHOUSE v BINDLEY

Sec 8-acceptance may be made by performance of the condition of a proposal, or the acceptance of any consideration for a reciprocal promise which may be offered with a proposal. CARLILL v CARBOLIC SMOKE BALL CO. LTD

Sec 4(2)-communication of an acceptance is complete—

when transmission to the proposer, so as to be out of the power of the acceptor.

As against the acceptor, when it comes to the knowledge of the proposer.

Revocation of offer and Acceptance-a proposal may b withdrawn in any of the following way :

Revocation by the proposer to the party to whom the proposal was made.

Laps of a reasonable time

The failure of acceptor to fulfil a condition precedent to a acceptance.

The death or mental disorder of the proposer comes to the knowledge of the acceptor b4 acceptance.

Sec 6(a)- a proposal is revoked when the communication of notice of revocation by the proposer to the other party.

Sec 4(3)- communication of a revocation is complete :

when the person who makes it transmission it to whom it is made, so as to be out of the power of the person who makes it.

When it come to the person to whom it is made knowledge.

Sec 5(1)-a proposal may b revoked by the proposer at any time b4 the communication of its acceptance is complete, but nt afterwards.

Sec 5(2)-an acceptance may b revoked by the acceptor at any time time b4 the communication of the acceptance is complete, but nt afterwards.

Consideration

Sec 26-an agreement without consideration is void.

Sec 2(d)-when, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise.

Consideration Need Not be Adequate

‘-Explanation 2 to Sec 26-an agreement is nt void merly because the consideration is inadequate.

Illustration-A agreed to sell a horse worth RM1000 for RM10. A consent/agreed to the agreement was freely given. The agreement is a contract notwithstanding/although the inadequacy of the consideration.

CHAPPELL & CO LTD v NESTLE CO. LTD

Provision of Consideration

Sec 2(d)-consideration may move from a person who is not promisee.

Past Consideration is Good Consideration : Sec 2(d)

Natural Love and Affection is Valid Consideration

Sec 26(a)-an agreement made without consideration is void unless it is expressed in writing and registered under the law (if any) for the time being in force for the registration of such documents, and is made on account of natural love and affection between parties standing in a near relation to each other. Are binding in Malaysia if the requirements of sec 26(a) are present:

•it is expressed in writing

•it is registered (if applicable)

•the parties stand in a near relation to each other

TAN SOH SIM, CHAN LAW KEONG & ORS v TAN SAW KEOW & ORS

Accord and Satisfaction-Part Payment may Discharge an Obligation

Sec 64-promisee may dispense with or remit, wholly or in part, the performance of the promise made to him, or may extend the time for such performance, or may accept instead of it any satisfaction which he thinks fit.

KERPA SINGH v BARIAM SINGH

Consideration Need Not Move from the Promisee sec 2(d)

Certainty

An agreement which is uncertain or not capable of being made certain is void.

KARUPPAN CHETTY v SUAH THIAN

Capacity

Refers to the ability of the parties to a contract to fully understand its terms and obligation.

Sec 11-every person is competent to contract who is of the age of majority according to the law to which he is subject, and who is of sound mind, and it not disqualified from contracting by any law to which he is subject. An infant cannot make any valid contract.

MOHORI BIBEE v DHARMODAS GHOSE

However, there are some exception:

contract for necessaries

contract of scholarship

contract of insurance

Sec 69-if a person, incapable of entering into a contract, or any 1 whom he is legally bound to support, is supplied by another person with necessaries suited to his condition in life, the person who has furnished such supplied is entitle to be reimbursed from the property of such incapable person.

SCARBOROUGH v STRUZAKER

Education was held to be include under necessaries in GOVERNMENT OF MALAYSIA v GURCHARAN SINGH & ORS

Under the insurance Act 1963 (revised 1972), an infant over the age of ten may enter into a contract of insurance, however, if he is below the age of sixteen