System of binding precedent is called stare decisis

According the above case, Mr Justice Peter which is the high court judge cannot decline to be bound by the decision made previously by the Court of Appeal. This is because of the Judicial Precedent System.

Judicial Precedent, also known as a case law that is adopted by judges where judges follow decision made by previous judge in similar case. Decisions made in previous cases simply form part of the material which a court may take account in reaching its decision. Judicial Precedent will only be binding upon future cases depending on the hierarchy of court. This system of binding precedent is called stare decisis, the nature of judicial precedent. Once a precedent is made, it will remain unchanged until it is overruled by a higher court in a later case.

Court of Appeal is an appellate court of the judiciary system. Court of Appeal is the second highest court in the hierarchy below the Federal Court and the High Court is the third highest court in the hierarchy. They are under the Superior Court. The Federal Court was established in 1985 and the Court of Appeal was in 1994. Due to the rules of doctrine of binding precedent, decision made in Court of Appeal is binding on all lower courts as well as itself in future similar case. Therefore in this case, the decision made by the Court of Appeal which is of a higher position than high court, Mr Justice Peter is bound to follow the decision made previously.

The decision made by the Court of Appeal is called the Original Precedent. It is where a new law is apply when a judge made a decision according to justice, equity and good conscience on a situation where there is no precedent to follow. This can be seen in the case of Donoghue v. Stevenson 1 (1932) AC 562 (HL). Mrs May Donoghue’s friend has ordered ice cream and ginger beer for her at Mr Francis Minchella’s Wellmeadow Cafe. She found a decomposed item-snail in her ginger beer after she consumed the drink. Then, she suffered from mental depression, severe shock, later gastroenteritis and loss of wages when she can’t continue her work. She sued the defendant David Stevenson, Aerated-water manufacturer of Paisley under Duty of Care of negligence.

When Mr Justice Peter applies the existing law, it is called declaratory precedent. Precedent can be seen used in the case of Zainab binti Ismail v Marimuthu & Anor 2 (1955) M.L.J 22. A mother saw her daughter runned down by a lorry. The plaintiff, who is the mother of the daughter sue the lorry driver who had drove recklessly under duty of care as the accident has given her a shock and she is sick for 2 years. The lorry driver was liable to the plaintiff for damages of shock and illness.

Mr Justice Peter must study the case thoroughly before deciding as there are only some parts of the case is to be considered as binding. The binding part is called ratio decidindi while the non binding part is obiter dictum. Ratio Decidendi is the legal principal of the case which is binding to lower courts as it is the reason for the decision. It is important able to analyse a decision where material facts were found. Obiter Dictum is comments made by a judge, which is not binding but only persuasive. It relates to facts which were not found to existing in the case. It arises when a number of judges hear deals with a case but one of them disagrees with the others. The dissenting judgment made by those judges who disagree is obiter dictum.

Hence, if the above case dealt by Mr Justice Peter has the similar ratio decidendi statement with the case dealt by the Court of Appeal, then he is bound by the decision. On the other hand, if it is related by Obiter Dictum, Mr Justice Peter can only use the comments by the Court of Appeal as reference.

However, Mr Justice Peter can decline being bound under certain circumstances. This is stated in the case of Young v. Bristol Aeroplane Co, Ltd 3 (1944). First, where there is a conflict in previous decisions made by Court of Appeal. The decision will not be followed and deemed to be overruled. Secondly, the Court of Appeal would not follow a previous decision of its own, if that decision or precedent was overlooked or misunderstood in previous decision. And thirdly, the Court of Appeal don not have to follow a previous decision of its own, which though not expressly overruled, is inconsistent with later House of Lords decision.

What do you think are the strengths and weaknesses of case law as a source of law? Discuss.

Case law is also known as judicial precedent. It is the system adopted by judges where the judges follow previous decision in similar situation depending on the hierarchy of the court. It is categorized under the unwritten law.

There are some strengths and weaknesses of this system.

Strengths

The first strength of case law is uniformity. This is means case law treats everyone equally. It helps to ensure the consistency in the interpretation and fairness of everyone in an application of law. There are no biases or discriminations to anyone. Parties involved will not think that they are treated unfairly or differently in similar cases that have been dealt with. Besides that, personality of the judges will not influence the outcome of a dispute in court as judges will be bound to follow previous decision.

The second strength of the case law is predictability. All parties involved in a particular case are able to anticipate the outcome of the case. Results are predicted and lawyers will have confidence in dealing with the case.

Thirdly, it creates certainty in law. As the court is bound to follow the solution that have been settled in court, the lawyers can refer to previous similar case as guidance. The lawyers can give well advises to their clients and ensure that they do not have to face high risk because they have reference from previous case with the similar issues. In other words, it can also be said to be predictability as outcome can be forecasted.

The decisions of the case law are normally practical in nature. This is because the decisions are made based on the actual problems, real people which happen in our daily life before courts rather than on logic or theory.

Next, case law is time and cost saving. It saves court time as most situations there already have an existing solution. It also saves legal cost because the case can be resolve quickly using existing solution. This benefits both the clients and the lawyers.

Lastly, it is flexible as new rules arise out of concrete fact or situation. New rules can be established or old ones adapted to meet new circumstances and the changing needs of society. When parties involved do not agree with the punishment, they should appeal to a higher court and might get a new decision. The judges can fill in any gaps left by Parliament in the legislative capacity. For example the ‘neighbor test’ formulated on Donoghue v Stevenson 4 (1932) determines whether a duty not to be negligent is owned to a particular person whatever the circumstances of the case.

Weaknesses

The first weakness of case law is rigidity, which is not flexible. Case law is bound by the Court of Appeal. This sometimes causes hardship because once a new law is created, no matter how bad the first decision is, it is binding until it is being overruled. Even a senior judge in the Court of Appeal may find himself obliged to follow and apply a higher court's decision which he thinks is unjust. People are reluctant to bring appeals as it incurred huge expenses.

Also, it is illogical. Due to rigidity of the system, judges who do not wish to follow the previous decision made may attempt to draw very fine distinctions in order to avoid following the rule. Judges and counsel will only pay attention to differences in cases which are fundamentally similar in order to not feel bound to follow an inconvenient rule.

Case law is bulky and complex. Hundreds of cases are reported each year and it is time consuming for judges to go through every case to find relevant solution which should be followed. It is hard for someone to know all of the fine distinction. It causes problems as even an experience lawyer may overlook some important rule in any given case.

Next, it is slow and expensive as the system depends on litigation for rules to emerge. Therefore, the body of case law cannot grow quick enough to meet modern demands. It must wait for the situation to come before the courts and this procedure might take years before the principle is firmly established as a precedent.

Lastly it is hard to find the ratio decidendi of a case. We know that only part of the case is binding in a case. However, it is difficult to tell which the ratio is and which the obiter of the case is. This detracts from the element of certainty.

Question 2

On the 29th October 2010, Steven advertised in the New Focus Paper, “Yamaha Piano latest model, excellent condition, RM15,000, interested please call 016-1234567".

On the 1st November 2010, Tanny after seeing the piano, offered RM10,000 to buy the piano. Steven said “I will not sell it below RM14,000 and I will not sell it to anyone else before 7th November 2010."

Tanny went to Australia for a few days and came back to Malaysia on the 7th of November 2010. On the 8th of November 2010, Tanny decided to post a letter accepting to buy the piano for RM14,000. Steven received this letter on the 11th of November 2010.

Discuss the above issues and explain if Tanny’s letter of acceptance is valid.

The article above is about contains issue regarding to the formation of a contract. It shows element of offer and acceptance.

On 29th October 2010, Steven advertised in the New Focus Paper, “Yamaha Piano latest model, excellent condition", for the price of RM15,000, and invited those who are interested to contact him since personal information and contact number of Steven is given in that advertisement. Referring to this statement, this advertisement can be an offer or an invitation to treat depending on the intention of the parties.

Offer is defined in S2(a) Contracts Acts, 1950 as “when one person signifies to another his willingness to do or 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". An advertisement may be construed as an offer if there is an intention to create legal relation in the advertisement. This principle was up held in the case of Carlil v Carbolic Smoke Ball Co 5 (1893). In this case, the Carbolic Smoke Ball Company has put up an advertisement regarding their ‘smoke ball’ product and claiming that they will pay £100 to anyone who got sick with influenza after using its product according to the instruction set by them. Mrs Carlil, after 2 months consuming the product has caught a flu and she tried to claim the £100 but failed since Carbolic Smoke Ball Company claim that it is not a serious contract. Finally, Mrs Carlil takes this matter to the court and successfully win the case and claimed the £100. The reason is that the advertisement is a unilateral offer to the entire nation where the offer is made to the world at large and only the identity of offeror is known. By satisfying the condition for using the product is an acceptance to the offer. The company also deposited £1,000 into the bank that showed serious intention to be legally bound. This kind of advertisement is of unilateral contract. They are treated as offers on the basis that the contract can normally be accepted without any need for further negotiations between the parties, and the person making the advertisement intends to be bound by it.

On the other hand, an invitation to treat is not an offer but merely a communication passed at negotiation stage. An invitation to treat (ITT) supplies information to others regarding the goods and services. Although advertisement may indicate price for goods and services, it is simply providing a guide as to what price is expected from parties interested to make an offer. We can refer to the case of Partridge v Crittenden 6 (1968) regarding this ITT. The defendant had advertised in a magazine for caged bird enthusiasts stating that he had finches for sale at 25 shillings each. The defendant was prosecuted under the Protection of Birds Act 1954, which makes it illegal to offer finches for sale. The defendant made an appeal and he succeeded as the advertisement was not an offer and merely an invitation to treat. This kind of advertisement is of bilateral contract. They are considered as invitation to treat on the ground that they may lead to further bargaining.

Regarding the facts above, it clearly shows that the advertisement is an Invitation to treat (ITT). This advertisement is of bilateral contract as offerors might want to negotiate about the price. Steven is making an invitation to the public to make an offer to him.

On 1st November 2010, Tanny after seeing the advertisement, Steven invited Tanny see the piano and this is merely an invitation. After seeing the piano, Tanny offered to buy the piano for RM10,000. Tanny is now making an offer under the S2(a) Contracts Acts, 1950. For an offer to be valid, it must be clear, precise, definite and complete. As reference, to the case of Gunthing v Lynn 7 (1831), it is said that the offeror promise to pay a further sum for a horse if it was ‘lucky’. The court held that this offer is not valid as it is not specific enough. Also, under S4(1) Contract Acts, 1950 that states that offer must be communicated. This principle was upheld in the case of Taylor v Laird 8 (1856). The captain of a ship had resign and refused to go any further in the middle of work. He subsequently helped to work the ship home and wanted to claim his wage for this work. However, he failed as his offer to help was not communicated and there is no opportunity to accept or reject the offer.

In this case, this offer is valid as it is specific and communicated. Tanny had offered to buy the piano that belongs to Steven that she saw at the price of RM 10,000 which is a specific amount by communicating with Steven. So, Tanny is now an offeror and Steven is the offeree who has the the right to accept or reject the offer. This offer is consider as bilateral offer because Tanny, the offeror is offering to a particular person which is Steven, the offeree. We can see that this is a bilateral offer in the case of Powell v Lee 9 (1908). In this case Powell applied for the position of headmaster. He was told by one of the school board members that he had been successful. However, the board later changed their mind and appointed another person to the position. Powell sues for breach of contract but it was unsuccessful because an individual board member had acted prematurely by telling him that he was the successful applicant without authority. There was no acceptance by the board of Powell's offer.

However, Steven chooses not to accept the offer made by Tanny. Section 2(b) Contracts Act, 1950 states that when the offeree signifies his assent to the offer, the offer is said to be accepted. The offer when accepted becomes a promise. In this case Steven did not accept the offer therefore no agreement is formed. Steven rejects the original price made by the Tanny, and he bargain to sell the piano for a price not below RM14,000. Steven is now making a counter offer as he rejects the original offer. A counter offer operates as a rejection to the original offer and creates a new offer. This principle was upheld in the case of Hyde v Wrench 10[1840]. The defendant offered to sell his farm for £1,000 but the plaintiff’s agent said he would only give £950 for it. After the defendant has given some thought on the offer, he rejected it by writing back to the plaintiff. Later on, the plaintiff wrote back stating that he would pay the original price which is £1,000 but was rejected. The plaintiff sued for specific performance and lost the case. If the offer of £1,000 was accepted in the first instance, there will be a binding contract. However a counter offer was made when the plaintiff rejects the original offer and altered it. Therefore, the original offer cannot be revived as there is no obligation of any sort between the parties.

So, a counter offer is made. Steven the original offeree becomes the offeror by making a new offer and Tanny is the original offeror becomes the new offeree who has the right to accept or reject the new modified offer. The changes or additional to the offer constitutes a rejection of the old offer. Thus, offer made by Tanny is terminated and a new offer has been made by Steven.

At the same time, Steven promised that he would not sell the piano to anyone else before 7th November 2010. He is making a promise to Tanny. Steven becomes the promisor and Tanny become the promisee. This is a bilateral offer as Steven had made an offer particularly to Tanny. Tanny has yet to give an answer to Steven. Tanny has left the country and will only be back on the 7th November 2010 which is the deadline that Steven offered to Tanny. So, the duration between 1st November and 7th November becomes a term and condition of the contract between Steven and Tanny. This means that Steven cannot sell the piano to anyone else in that duration.

On the 7th November 2010, Tanny came back to Malaysia. However, Tanny only decided to post a letter acceptance on the 8th November 2010 to buy the piano at RM14,000. If Tanny had posted the letter before 7th November 2010, Tanny is said to have accepted the offer by Steven, which is constituted as an acceptance by post. Postal rule states that acceptance by post is deemed to take effect when the letter which is correctly addressed and stamped, is actually placed in the post box regardless of when the offeror actually receive the letter. Acceptance is said to be completed once the letter is posted. The case related to this rule is the case of Adam v Lindsell 11 (1818). On 2 September, the defendent wrote to the plaintiff offering to sell them certain fleeces of wool and requiring an answer in the course of post by 7 September. The defendants however misdirected the letter so that the plaintiffs did not receive it until 5 September. The plaintiffs posted their acceptance on the same day but it was not received until 9 September. Meanwhile, on 8 September, the defendants, not having received an answer by 7 September as they had expected, sold the wool to someone else. Plaintiffs brought a breach of contract claim against Defendants. The Court held that Defendants’ offer was accepted on September 5, when Plaintiffs mailed the acceptance letter to Defendants. The Court rejected Defendants’ argument that there could not have been a binding contract until they had received the answer from Plaintiffs accepting the offer. Because under the postal rule, acceptance is said to be completed once the letter is posted.

However, the letter is posted after 7th November which means that the duration of the offer is over or expired. The offer made by Steven is now not verified. A revocation of offer is complete. Revocation is defined in S5 (1) Contract Acts as “provides that the offeror may withdraw his offer at anytime before a proper acceptance has been made." Also, in S6 Contract Acts states that revocation of an offer must be communicated to the offeree for it to be effective. On the 1st November 2010, Steven had made an offer stating that is it only valid until 7th November 2010. Therefore, Tanny knew about the deadline and acknowledge that the offer will not be valid once pass deadline. Also, Tanny did not send in her acceptance by post by 7th November 2010. Therefore, Steven has the right to revoke the offer as acceptance had not been made.

Now, the letter posted by Tanny on the 8th November to buy the piano at RM14,000 becomes a new offer to Steven. Tanny is the offeror and Steven is the offeree.

On 11th November 2010, Steven received the letter. Now, it depends on Steven whether he wants to reject or accept the offer. If Steven accepts the offer made by Tanny, an agreement will occur. The acceptance will be valid when the offeror, Tanny knows about that the acceptance. Acceptance is defined in S2 (b) Contracts Acts “states that when the offeree signifies his assent to the offer is said to be accepted." Acceptance must be absolute and unqualified. Acceptance must be made in reliance upon offer and must correspond with all the terms in the offer. The parties must agree to the exact same condition that the offeror offers. Offer may be written, oral, or implied by conduct. When all the conditions are met, acceptance is said to be valid.