According to Oxford English Dictionary, law is defined as the body of enacted or customary rules recognized by a community as a binding. In short, law may be defined as a body of rules which are enforced by the state. They are also enforced by the police, supported by the court and prison systems. Laws are written by legislators, such as senators or congressmen. In most countries, laws must preserve and not contradict to the Constitution, a document outlining the most basic rules of the country. How a law is made? First an Act becomes a Bill and it must be passed by both the senate and House of Representatives to become a law. A Bill refers to the final proposal of a law.
There are six (6) main functions of laws in a country. They are to keep the peace in a country, shaping moral standards, promoting social justice, facilitating orderly change, providing a basis for compromise and lastly to help in facilitating a plan. Besides that there are two (2) types of law. One is the written law which is the most important source of law and which is enacted by certain bodies while the second law is the unwritten law. It does not mean that the unwritten law is not written. Basically it refers to those laws which are not enacted by the legislature and which are not found in the written Federal and States Constitution.
A contract is define as a bargain or deal from which both parties except to benefit. In a legal sense it refers to an agreement between two or more parties that is legally binding between them. The effect is that the parties in the contract can enforce the contract which means that if in the event when one of the parties breach the contract the other party can bring the case to the court to claim damages. Section 2(h) of CA 1950 defines law as an agreement enforceable by the law. The few basic elements to be considered before a contract is made and valid are offer, acceptance, capacity, consideration, intention to create legal relationship, certainty and lastly free consent. The main two elements in a contract are offer and acceptance. The other elements are important as well but these two are the key elements in making a valid contract. Offer is also known as a proposal meaning a statement by one party that they are willing to do or abstain from doing so while acceptance is defined in section 2(b) of CA 1950 as when the person to whom the proposal is made signifies his assent and when accepted it becomes a promise.
For Question 1, the issues are that Mazlan offered Faizal his antique vase for RM 20,000 and Faizal accepted the offer on 5th October 2009 through a letter. He then changed his mind and revoked his acceptance by calling Mazlan through telephone on 14th October 2009 at 11am. On the same day at 12pm Mazlan receives the acceptance letter from Faizal. Mazlan is unhappy with this and wishes to sue Faizal for breach of contract.
Under the Contract Act (CA) 1950, section 5(2) of the CA 1950 states that an acceptance may be revoked at any time before the communication of the acceptance is complete as against the acceptor, but not afterwards. Also according to section 4(2) (b) of CA 1950, it states that the communication of an acceptance is complete as against the acceptor when it comes to the knowledge of the proposer. Referring to both of this act, Faizal changed his mind and revoked the acceptance to Mazlan through the phone call at the 14th October 2009. The call was made at 11am. But Mazlan received the letter of acceptance posted by Faizal on the same day at 12pm. As a result, the communication of acceptance is not complete because it was not in the knowledge of Mazlan that Faizal at first had accepted the offer. Before Mazlan received the letter of acceptance, Faizal had already revoked his acceptance. So, there is an offer on the table but no acceptance.
A relevant case which can be discussed with the above case is the Entores Ltd. V. Miles Far East Corporation (1955) 2 Q.B. 327. In this case it was an acceptance made must actually come to the knowledge of the proposer as it was made by telephones, telex or emails. This is also known as instantaneous circumstances where there are no postal charges. The issue in this case was acceptance was completed and where the contract was made. It was a case of offer and acceptance as well and the plaintiff wished to sue the defendant for a breach of contract. At the end of the day, the court decided that the contract was made where the acceptance was received.
So for this case, Mazlan did offer and Faizal did accept at first. If this was the case then Mazlan can sue Faizal. But as mention in the question, Faizal revoked his acceptance before the acceptance letter reached Mazlan. So there is no any valid or legal contract made between these two. Lastly, the communication of acceptance is not complete as it is not in the knowledge of the proposer and thus Mazlan cannot sue Faizal for breach of contract under the Contract Act 1950.
In this case, it is also under the Contract Act 1950. There are two elements here which are the offer and invitation to treat (ITT). An offer must be distinguished from an ITT. Contract is define as a bargain or deal from which both parties except to benefit. In a legal sense it refers to an agreement between two or more parties that is legally binding between them. The effect is that the parties in the contract can enforce the contract which means that if in the event when one of the parties breach the contract the other party can bring the case to the court to claim damages.
In contract law, an invitation to treat is defined as an action by one party which may appear to be a contractual offer but which is actually inviting others to make an offer of their own. In simple words, it invites people to make offers. It is not a proposal but it is a sort of preliminary communication which passes between the parties at the stage of negotiation. It is not capable of being turned into a contract as it depends on the intention of the parties. It is different from an offer as an offer must be certain, definite and absolute. Examples of ITT are price list, a display of goods with price tags in a self-service supermarket, advertisements or an auctioneer inviting bids for a particular article.
This case is about Jet Swimming Trading Bhd and Tony Lim. The issue here is that Jet Swimming came out with an advertisement in the Daily Times and offered a reward of RM 15,000 to anyone who swam across the Straits of Malacca successfully. It was a part of the company’s promotional campaign in conjunction with the National Day. Tony Lim completed the challenge successfully in full gear provided by the company. And he was informed by the manager after completing the swim that the company has withdrawn their offer due to some unforeseen circumstances.
The circumstances here are that there is already a legally binding between both of these parties which has also created legal rights and duties between them. As defined earlier ITT is just an expression of inviting people to make an offer. But in this case, Jet Swimming Trading Bhd came out with an advertisement which is an ITT but they offered cash price for the winner of the challenge. This is clearly an offer. The offer was made by the company by stating that anyone who successfully swam across the Straits will receive RM 15,000 as the price. The cash prize showed an intention to be bound. Therefore the advertisement was an offer. The acceptance here happened when Tony Lim came to join the swimming challenge. So when Tony Lim completed the swim, it is already a contract legally binding between both of the parties.
So under section 4(1) of CA 1950, it states that a proposal is only communicated if the party who accepts it knew about the proposal. Tony Lim was aware of the offer and it was in his knowledge when he accepted the offer (challenge). So this is a valid and legal contract. Furthermore the attire for the event was also provided by the Company.
A relevant case which can be discussed with this case is the Carlill v. Carbollic Smoke Ball Co. Ltd (1893) 1 Q.B. 256. In this case it was also a matter on offer and ITT. Carbollic came out with an advertisement with refund money for anyone who contacted influenza after using their product. Carbollic claim that their advertisement was an ITT but the court ruled it out and decided that the plaintiff who was Carlill was entitled to get the promised money.
So for the conclusion of this case, the money offered showed that there was an intention to be bound which means that the advertisement is indeed an offer. It is possible to make an offer to the world at large, which can be accepted by anyone who participated in the challenge or anyone who successfully swam across the Straits of Malacca. Tony Lim’s participation in the event and the attire provided is amounted to an acceptance. So all this proves that there is already a legal binding between them and Jet Swimming Trading Bhd has to pay him the RM 15,000. If the company didn’t or refuse to pay Tony Lim, he can definitely sue or charge Jet Swimming Trading Bhd with a breach of contract in court and claim the promised reward of RM 15,000.
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