Contract Law Submitting A Quotation Is N PDF

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Contract Law – Submitting A Quotation Is Not An Offer By Ismail N

For a contract to be enforceable there must be a valid agreement between the parties. An agreement is, by the way, made up of an offer, an acceptance and a consideration. What constitutes a valid offer is quite a big topic to cover. However, the offer must be communicated to a particular person or group of person. It also must be definite in substance. It must be noted also that an offer must be distinguished from an ‘invitation to treat’. An invitation to treat is an indication that the inviter is willing to enter into negotiation but is yet prepared to be bound. Whether it is an offer or invitation to treat depends on the intention of the parties in each case. The court will also see the conduct of the parties involved to determine whether there is a valid offer. In Preston Corporation Sdn Bhd v Edward Leong & Ors. [1982] 2 MLJ 22, the court had to decide on the conduct of the parties and make a decision whether a quotation is an offer or not. This case signifies one of the basic principles in contract law which is to distinguish offer from invitation to treat (ITT) in order to identify existence of a contract between the two parties. Facts Of The Case: The appellants (Preston Corp) were a company carrying on the business of publishing books. The Respondents ( Edward Leong & Ors.), were a firm of printers carrying on business at MacPherson Road, Singapore. It is not disputed that there was a business relationship between them regarding the printing of school text books since 1970 to 1971. This relationship would have continued beyond that period, had it not been for the irreconcilable differences between them. The differences was raised when the respondents sent the appellants two bills; one bill for printing charges and another bill for extra charges for reproducing the film positives. It was brought to the court’s attention that the film ownership clause was found in the quotation sent by the respondents. The appellants paid all the printing charges except a disputed sum of $500 which they claimed to be an overcharge by the respondents. They also withheld payment of the extra charges for reproducing the film positives because the respondents claimed ownership of these films. The respondents sued the appellants for the sum of $500 which they alleged was the balance of printing charges and a further sum of $28,052 as extra charges for reproducing the films positive whose ownership was disputed. Harun J who heard the case in the first instance, gave judgment in favour of the respondents on both these sums and therefore ordered the appellants to pay a total sum of $29,552 at 6% interest and costs without, at the same time, ordering the delivery of film positives to the appellants. Hence the appellants appealed against this decision.

Submitting A Quotation Is Not An Offer The Federal Court held that no contract between the parties could come into existence at the moment when the appellants printing orders were issued, but did so only at the time when these orders were confirmed or accepted by the respondents. The quotation was merely a supply of information or an invitation to enter into a contract. Consequently, the film ownership clause contained in the quotations was completely irrelevant as it was not part of the contract at all. Therefore, the respondent’s claim was dismissed and the deposit should be refunded to the appellant....