Question - ITT & Counter Offer PDF

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The issue is whether Ali picking up the displayed kebaya nyonya constitute an offer of sale or an invitation to treat.An offer can be defined as when a person expresses his will to another person to do or not to do something. According to section 2 (a) of the Contract Act 1950, “When one person sign...

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The issue is whether Ali picking up the displayed kebaya nyonya constitute an offer of sale or an invitation to treat. An offer can be defined as when a person expresses his will to another person to do or not to do something. According to section 2 (a) of the Contract Act 1950, “When one 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.” Section 2(b) of the Act defines an acceptance as when the person to whom the proposal is made signifies his assent thereto, thus the proposal becomes a promise. In Preston Corporation Sdn Bhd v Edward Leong, the definition of offer per Abas FJ stated, an offer is an intimation of willingness by an offeror to enter into a legally binding contract. Section 3 of the same Act states that the communication, acceptance and revocation of proposals, as well as acceptances, are deemed to be made by any act or omission of the party proposing, accepting, or revoking, by which he intends to communicate the proposal, acceptance or revocation, or which has the effect of communicating it. Section 4(1) of the Contracts Act 1950 goes on to state that the communication of a proposal is complete when it comes to the knowledge of the person to whom it is made. In this case, there involves invitation to treat where it encourages or invites people to enter into a contract by offering and an acceptance to that offer. There is no legal intent involved until both parties signify their willingness to do and achieve the assent to the proposal. It is an expression of willingness to negotiate for the best offer. An invitation to treat involves display of goods, advertisement and auction. The contract of sale would be completed when the customer’s offer to buy was accepted by the seller upon receiving the payment at the cashier’s desk. In the case of Pharmaceutical Society of Great Britain v Boots Cash Chemist Ltd [1953], the defendant ran a self-service drug store in which they allowed the sale of a listed poison to be affected without the supervision of a registered pharmacist. The arrangement in the shop was that the items were displayed in open shelves which could be selected by the customer. Near the cashier desk was a registered pharmacist who was authorized to prevent customers from removing any drug from the shop. The issue that arose was whether the contract of sale was concluded when the customer selected the product from the shelves or when the items were paid. The Court held that the display was an invitation to treat, the customer’s tender of the drugs was the offer, and the taking of the money by the pharmacist was the acceptance. The sale therefore took place at the checkout. The defendant therefore did not commit an offence. In this case, there is a display of good for the kebaya nyonya, which constitute as an invitation to treat. The kebaya nyonya is only displayed to attract and encourage people to buy the

clothing and never intended to be an offer when taken. The offer only exists when the baju kebaya nyonya is brought to the counter by Ali to pay and there exists an acceptance when the cashier receives the money. However, it can be seen that when Ali decided to not buy it before he reached the cashier’s desk, he had not satisfied section 2(a) of the Contracts Act 1950 by signifying his offer. At the same time, Ali also had not satisfied Section 3 of the Act when he did not communicate his offer. This also means that section 4(1) of the same Act is not satisfied as the cashier did not have the knowledge of the offer by Ali. In the case of Pharmaceutical Society of Great Britain v Boots Cash Chemist, it was held that the display was an invitation to treat, the customer’s tender of the drugs was the offer, and the taking of the money by the pharmacist was the acceptance. The sale therefore took place at the checkout. Boots therefore did not commit an offence. By referring to the said case, Ali has not made an offer yet since the communication of offer will only take place when the offeror paid for the goods. In conclusion, Ali is not legally bound to the contract to purchase the kebaya nyonya as it is only an invitation to treat and not an offer to render legal intent of both parties.

The issue is whether there was a valid contract between the parties and if a counter offer was made in discussions, whether the original offer would still remain open. In section 2(a) of the Contracts Act 1950, when one 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; In Preston Corporation Sdn. Bhd. v Edward Leong the Definition of offer, per Abas FJ stated, ‘An offer is an intimation of willingness by an offeror to enter into a legally binding contract.’ In Section 2(b) of the Contracts Act 1950, 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. Section 3 of the Act states that the communication, acceptance and revocation of proposals, as well as acceptances, are deemed to be made by any act or omission of the party proposing, accepting, or revoking, by which he intends to communicate the proposal, acceptance or revocation, or which has the effect of communicating it. Section 4(1) goes on to state that the communication of a proposal is complete when it comes to the knowledge of the person to whom it is made. Additionally, that the acceptance of an offer must be absolute and unqualified. Under Section 7 of the Contracts Act 1950, In order to convert a proposal into a promise the acceptance must be absolute and unqualified. It cannot be altered or amended as doing so would terminate the original offer and becomes void ab initio. When offeree make changes to the

original offer it will become a counter offer. Counter offer will terminate the original offer; thus, the new offer will be concluded by the acceptance of the other party. In Hyde v Wrench [1840], the defendant wrote to plaintiff on June 6 offering to sell him his farm for $1000. The plaintiff immediately called on the defendant and offered to purchase the farm for $950. On June 27, the defendant replied to the plaintiff that he was unable to accept the plaintiff’s offer. Upon receipt of the letter on June 29, the plaintiff immediately wrote to the defendant accepting the defendant’s earlier offer of $1000. Defendant refused and plaintiff sued for specific performance. The court dismissed the claims and held that there was no binding contract for the farm between Mr Hyde and Mr Wrench. It was stated that when a counter offer is made, this supersedes and destroys the original offer. This original offer is no longer available or on the table. In this case, the original price was RM60.00, however the cashier refuse to sell it to Robert unless he buys it at RM100.00. It can be seen that when Robert brought the box to the counter to pay it, he had satisfied section 2(a) of the Contracts Act 1950 by signifying his offer. Further, Robert had also satisfied Section 3 of the Act when he went to the counter to communicate said offer. By virtue of Section 4(1) of the same Act, the offer was complete when it was made known to the cashier when Robert handed over some money to pay for the box. However, by virtue of section 7 of the Contracts Act 1950, there was clearly a counter-offer made by the cashier when she altered the offer by increasing the price to RM100.00, which is higher than the original price, RM60.00. Since the cashier had made a counter offer, the original contract had been amended, thus renders the original contract to be null and void. In the case of Hyde v Wrench, the court dismissed the claims and held that there was no binding contract for the farm between Mr Hyde and Mr Wrench. It was stated that when a counter offer is made, this supersedes and destroys the original offer. This original offer is no longer available or on the table. Therefore, by referring to the said case, there was no binding contract for the box of “Farmatonne” between Robert and Getwell Pharmacy. In conclusion, there was no acceptance as the original offer had been amended rendering the contract to be null and void....