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LAW 299DIANA MAISARA BINTI ABDUL SAMAD (BA1114A)QUESTION DANIELLela had lost her son, Amirul. She advertised in the local newspaper that whoever finds Amirul and returns him to Lela, she would give that person RM 10,000 as a reward. Three days later, Amirul was found by Daniel who returned him to Le...

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LAW 299 DIANA MAISARA BINTI ABDUL SAMAD (BA1114A)

QUESTION DANIEL Lela had lost her son, Amirul. She advertised in the local newspaper that whoever finds Amirul and returns him to Lela, she would give that person RM 10,000 as a reward. Three days later, Amirul was found by Daniel who returned him to Lela. Daniel had read the newspaper and seen the advertisement. Advise Daniel whether he is entitled to the reward.

ANSWER DANIEL

1. Abstract A contract is an agreement enforceable at law which begins with A Valid Offer and A Valid Acceptance and supported by Consideration. An agreement not supported by any consideration is NULL and VOID. Consideration rests in philosophy of ‘Exchange of Value to a Promise”. There are 3 types of Consideration. There are firstly, Executory Consideration. Secondly Executed Consideration and finally Past Consideration.

2. Issues Issues arising out of Daniel and Lela’s facts are, whether there was a valid offer by Lela. Secondly, whether there was valid acceptance by Daniel and thirdly whether there was any consideration moving from Daniel for him to be entitled to the reward offered by Lela. In the matter of valid offer, in Section 2(a) of the Contracts Act 1950 , offer is defined as “when a 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”. It must be clear, complete and final. A valid offer must be clear (GUTHING v LYNN), communicated to the offeree (TAYLOR v LAIRD) and most importantly, distinguished from mere invitation to treat. In CARLILL v CARBOLIC SMOKE BALL CO it was held that the advertisement by Smokeball Co was valid because it was a general offer which is directed to the public. It was also clear, complete and final. Anyone who fulfil the three conditions stated in the advertisement is considered as a Valid Acceptor.

A valid acceptance turns a proposal into a Promise. In the matter of valid acceptance, in Section 2(b) Contract Act 1950 states “when the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted: a proposal, when accepted, becomes a promise” It must be absolute and unqualified (HYDE v WRENCH), communication and be express in some usual and reasonable manner (ELIASON v HENSAW & WESTERN ELECTRIC v WELSH DEVELOPMENT AGENCY).

Consideration meanwhile is a form of exchange of value given by the promisee or any other party to the promisor. Section 2(d) Contract Act 1950 defines consideration as ‘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’. There are 3 types of Consideration: Executory, executed and past consideration. Executory consideration is when one promise is made in return for another promise. For example, A agrees to sell his house to B for RM10,000. Here, B promise to pay the sum of RM10,000 is the consideration for A’s promise to sell the house, and A’s promise to sell the house is the consideration for B’s promise to pay the RM10,000. These are lawful consideration. Executed consideration is a consideration is executed when a promise is made in return to the performance of an act. For example, X promises to pay RM200 to anyone who finds and returns his lost handphone. In response to the offer Y put some effort and finally finds the handphone of X. Y returns it to X. In this situation the act of Y in finding and returning the handphone is the executed consideration for X’s promise to pay. Therefore, X’s promise is a contract. Past consideration is where one promise is made subsequent to and in return for an act that has already been performed. For example, X asks Y to help him in finding his lost handphone. In response to that request, Y puts some effort and finally finds it. When Y returns it to X and feeling thankful, X promises to pay RM200 to Y. X’s promise is made in return for the past act of Y. The past act of Y is considered as a past consideration. Hence, X’s promise is a contract.

On the facts of Daniel and Lela, Lela’s advertisement was an offer according to the case of CARLILL v CARBOLIC SMOKEBALL CO and Section 2(a) of Contract Act 1950. It clearly stated the conditions of the offer. It was also a general offer. Daniel’s finding Lela’s son was a valid offer and the offer as in the case of CARLILL v CARBOLIC SMOKEBALL CO by fulfilling Lela’s condition.

Thirdly, Daniel’s effort in finding Lela’s son is a form executed consideration. This type of exchange of value was seen in the case of CARLILL v CARBOLIC SMOKEBALL CO where the increase sales of smokeball during an influenza was an exchange of value to the promise by smokeball to pay the 100 pounds reward.

It is submitted that Lela advertisement was an offer. Daniel responded to the general offer and accepted it by fulfilling the condition stated in the advertisement.

Citations Cases: 1. CARLILL v CARBOLIC SMOKEBALL

Statutes: 1. Section 2(a) Contract Act 1950 2. Section 2(b) Contract Act 1950

References: 1. Business Law 299 Text Book- September 2019 ; Dr. Nasreen Miza Hilmy bt Nasrijal, Pn. Mimi Sofiah bt Ahmad Mustafa, Pn. Hjh Salmiah Salleh, Pn. Aliyah Bt Abdullah, Pn. Marziana Abd Malib. – UitmCM....