...•JoeCo. recently made a relatively large sale of computers to a new customer, The Gamery. As part of the sale, the customer ordered 12 extremely fast and expensive ABC video adapters, which is not an item you regularly stock, so you would have to special order them. •At the time for shipment of the computers per the agreement, you still hadn’t received the adapters from your vendor. Per instructions from the customer, you went ahead and shipped the computers and were to ship the video adapters separately when you received them from your supplier. •When they came in, you packaged them all up and had them picked up by UBS (United Box Service) for delivery. That was two weeks ago and the customer has not yet received them. The customer is boiling mad that he hasn’t gotten the last of his order and is threatening to sue for breach of contract, to return the computers and to cancel the entire order. – Can the customer cancel the entire order? – It appears the adapters are lost. As between JoeCo. and The Gamery, who bears the loss? – What could JoeCo. do to protect itself in advance of this type of shipping situation happening again? Facts and issues: Identify the parties; JoeCo (seller) and The Gamery (buyer) USB (carrier) First issue: JoeCo jeopardize the entire order for some additional supply-the adapters- that he can’t stock or control. Second issue: It seems that JoeCo (seller) has breach the contract when he has not include the adapters at the time of shipping...
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...regard to the acceptance, which states that “acceptance in not effective until communicated to and received by the offeror”. The postal rule states that, by contrast, that acceptance takes effect when a letter is posted. The rationale given for the rule is that both parties nominates the post office as implied agent and therefore receipt of the acceptance by the post office is regarded as that of the offeree. The main drawback of the postal rule is that the risk of the acceptance being delivered late or lost in the post is placed upon the offeror. Thus acceptance is effective even when the letter is lost in the post. However, if the letter is lost or delayed in the post because the offeree has addressed it incorrectly the “postal rule” will not apply. To minimize the risk, the offeror can require actual receipt as a condition before being legally bound. The postal rule applies only to acceptance. Revocation is ineffective until communicated to the offeree, hence revocation by post is ineffective until the letter is actually received by the offeree. The implication of this is that it is possible for a letter of acceptance to be posted after a letter of revocation of the offer has been posted but before it is delivered, and acceptance will be complete at the time that the letter of acceptance was posted – which would rendered the offeror’s revocation inoperative. Analyzing the case: Mark, the offeror has impliedly nominates the post office as the means for which acceptance should be...
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...(a) Advise Mr. Robert whether his revocation of offer by post is effective as against Mr. James. The issue in the given situation is whether Mr. Robert's revocation of offer by post is effective or not as against Mr. James. Section 2(h) of the Contract Act 1950 defines that contract is an agreement enforceable by law. In order for an agreement to be enforceable by law, it must consist of six essential elements which are offer, acceptance, consideration, intention to create legal relation, capacity and certainty. The revocation of proposal is define in Section5(1) Contracts Act as a proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards. In order for the revocation of the proposal to be effective, it must be communicated by the proposer to the other party before it accepts. Communication of revocation can be done by the proposer or his agent acting on his behalf. In the event of acceptance by post or telegram, the acceptance is complete as against the proposer upon posting or delivery of the telegram. In the case of Byrne v. Tienhoven, defendant posted letter of offer to the plaintiff on 1 October. On 8 October, defendant posted a letter revoking the offer. On 11 October, plaintiff received the letter of offer and sent acceptance by telegram on the same day. Only on 20 October did the defendant's letter of revocation was received by the plaintiff. The court held that there is a contract between...
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...In order to establish a contractual agreement between Futuretronics (‘FT’ hereafter) and Graphix Labels (‘GL’ hereafter), the common law dictates that we must satisfy the elements of offer, acceptance and consideration. These elements are to be determined objectively, in regards to whether a reasonable person would believe a contract to exist between the parties. Though we must carefully analyse these elements separately, it is important to note that in essence, the courts are trying to determine whether an agreement was reached between the parties. For the purposes of the assignment, this advice will be based on the assumption that the Electronic Transactions Bill 2011 (WA) (‘ETA’ hereafter) has passed and is in force. We will apply the bill in regards to the ‘timing’ of offer and acceptance between the parties. Offer An offer is an indication of a party’s willingness to enter into an agreement and be bound by stipulated terms. On 4 January 2006 Mr Chonja of FT sent an order via text message to GL for 21000 skins for iPod Shuffles, iPod Minis, iPod 4Gs and Xbox 360s, totalling $32099. Whilst it would appear to a reasonable person in the position of GL that FT intended the offer and that if accepted, a binding agreement would be made, there is another possible determination of whether an offer actually occurred. The facts reveal that in 2005 various dealings took place between FT and GL. GL may argue that text message is an unacceptable mode of communication to create...
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...B. Acceptance Introduction S 2(b) - when a 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. The person accepting the proposal is called the ‘promisee’ or the ‘acceptor’. * A proposal when accepted becomes a promise. * The person accepting the proposal is called the promisee. * When an acceptance of any promise is made in words, the acceptance is said to be expressed. * If the acceptance is made in words, the acceptance is said to be expressed. * If the acceptance is made other than in words, the acceptance is said to be implied. * For a proposal to be converted into a promise, the acceptance of that proposal must be absolute and unqualified (S 7(a) ) (1) Negotiation If the parties are still negotiating, an agreement is not yet formed Lau Brothers & Co v China Pacific Navigation Co. -negotiations for the delivery of logs were conducted through series of telegrams and letters. Whilst still in the negotiating stage, the D withdrew. - was there a binding contract between the two parties? The court held: - the parties were still in a state of negotiation and no agreement was formed. Therefore, the D was justified in withdrawing. (2) Counter offer Hyde v Wrench (1840) * The D offered to sell his estate to the P on June for 6 1000pound * On 8june in reply the P made a counterproposal to purchase at 950pound. * When the D refused...
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...The issue in the given situation is whether revocation of offer by post is effective due to the lapsed of time. Section 4(3)(a) of the Contract Act 1950 defines that the communication of a revocation is complete as against the person who makes it, when it is put into a course of transmission to the person to whom it is made, so as to be out of the power of the person who makes it. Proposal can be withdraw by communicating the notice of revocation by the proposer to the party to whom the proposal was made. Revocation of offer by post is effective is defined in Section 5(1) of the Contract Act 1950 provides that a proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards. Time is prescribed in the proposal for its acceptance. Under Section 6(b) of the Contract Act 1950 defines that a proposal is revoked by the lapsed of the time prescribed in the proposal for its acceptance, or, if no time is so prescribed, by the lapse of a reasonable time, without communication of acceptance. In the case of Ramsgate Victoria Hotel Co Ltd v Montefiore, the applicant had applied for shares but was not told until a certain date that his offer had been accepted and allocated to him. Now the balance owing on the shares was due. So the applicant refused to pay and the company threatened to sue him alleging breach of contract. It was stated that the offer to purchase shares had not been accepted within a reasonable...
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...The issue in the given situation is whether Mr. Robert’s revocation of offer is effective as against Mr. James. Section 2(h) of the Contracts Act 1950 defines contract as an agreement enforceable by law. In order for an agreement to be enforceable by law, it must consist of six essential elements which are offer, acceptance, consideration, intention to create legal relations, capacity and certainty. Offer is defined in Section 2(a) of the Contracts Act as something which is capable of being converted into an agreement by its acceptance. According to section 5(1) of the Contracts Act, a proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards. But the postal rule states that in the event of acceptance by post or telegram, the acceptance is complete as against the proposer upon posting or delivery of the telegram. Therefore, revocation of offer must be communicated before such posting or delivery. However, if the revocation of offer is made by post, the revocation is only effective when it comes to the knowledge of the person to whom it is made and not at the time when the letter of revocation is posted. In the case of Byrne v. Van Tienhoven, the defendant posted a letter of offer to the plaintiff on 1st October. The plaintiff received the letter on 11th October and accepted the offer on the same day by telegram. On 8th October a second letter had been sent from the defendant revoking the offer, this...
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...QUESTION 1 On the 3rd February, Kenanga offered to buy silverware from Hassan. On 6th February, Hassan sent his letter of acceptance to Kenanga by post. Unfortunately, the letter was delayed by Pos Malaysia. The acceptance letter reached Kenanga on the 28th February. However, before that, Kenanga had posted her letter of revocation on the 13th February and it reached Hassan on the 18th February. Advise Kenanga. Issues: The contract between Kenanga and Hassan valid? Relevant provisions: Section 4(2) (a) Act 1950: When it is agreed that the parties will we post as a means of communication the postal rule will apply. The postal rule states that where a letter is properly addressed and stamped the acceptance takes place when the letter is placed is the post box. Support cases: Ignatius v Bell (1913) 2FMSLR115 Facts of cases: P sued for specific performance over his rights to purchase D’s land. The option was to be exercised on or before 20th August 1912. The parties had contemplated the use of post as means of communication. P sent a notice of acceptance by registered post in Klang on 16th August 1912 but was not delivered until 25th August 1912 because P was away. Held: The court applied Section 4(2) (a) Act 1950 and held that the option was duly exercised by the P when the letter was posted on 16th August 1912. Although the defendant don’t know about the offer has been made by the plaintiff but the contract is binding. Support cases: Byrne v Van Tienhoven (1880)...
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...Law of Contract The nature of contract law: The law relating to contracts is a subject matter of private law. The governing law of contracts is the Contract Act 1872, which is predominantly a private law. The public law, however, comes into play when the parties are at breach of contracts. For example, the courts can award damages/compensation for the breach of contract, which is an act of public law. Contract law is part of law of obligation, which has other sources such as law of torts which govern compensatory remedies for legal injuries arising out of breach of legal, not contractual, duties. An example of tort law is compensation for injury arising from the use of a faulty product, not based on a contract. Contract permeates every day business life. Business managers often need to enter into, and sometimes even draft, contracts with other enterprises or people. Sometimes, contracts give rise to disputes which need to be settled through courts or arbitration. A well-drafted contract however can minimize the rise of disputes, which in many ways depends upon the legal adviser’s or the manager’s knowledge about contract law. The contract law deals also with the laws of agency, partnership, and the sale of goods. Of these issues of contract law, contract law proper and the law of agency re governed by the Contract Act 1872, a British-era enactment. Definition of a contract: According to s. 2 (h) of the CA 1872 an agreement enforceable by law is a contract. Te...
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...Question 2 (a) Under contract law, this problem is engage with the postal acceptance rule which is a ‘term of common law contracts which determines communication between the parties by mail when a contract has been composed. The basic idea of the rule is to accept offer that is sent before received the revocation of the offer. However, if a communication is sent rejecting the offer, and a later communication is sent accepting the contract, then the first one to be received by the offerer will prevail’ (Contracts Law: Mailbox Rule, n.d). The issue in this case is whether there has been a valid acceptance of the offer to create a legally binding contract between Benny of Azman’s. According to Section 2-(a) of Malaysian Contracts Act 1950, ‘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’. Section 2(b) states that ‘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’. Generally, silence of the offeree does not constitute an acceptance of the offer even though the offerer would consider offeree's silence. In accordance to another case, Felthouse v Bindley (1862) EWHC CP J 35 (Court of Common Pleas, n.d, the offerer wrote the offer mail to his nephew to buy his horse saying "If I hear no more about him, I consider the horse mine...
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...James recently won some money on Toto and wants to invest it to get maximum returns. His friend told him that the easiest way was to lend money to persons who cannot get credit from financial institutions or licensed money lenders as they are prepared to pay substantially higher interest rates and James could easily double his money in no time. James decides to try his hand at it although he does not have a money lending licence. He lends Ah Heng $20,000. Ah Heng does not pay up when the loan becomes due. Can James sue Ah Heng? What if instead of lending money James sold Ah Heng pirated CDs on credit terms and Ah Heng now refuses to pay? Answer: Introduction In this case, James won some money on Toto and wants to invest it to get maximum results by lending money to people. However, Ah Heng does not pay up when the loan becomes due. From the eyes of the law James is required to obtain a money lending licence to lend money to people legally. However, since James did not have a money lending licence, the contract can be deemed illegal depending on whether the purpose of the licence was used to raise revenue for the government or to protect the public. Example Case Law: Smith v Mawhood A tobacconist had to obtain a licence and have his name painted on the place of business. However, he did not do so and tried to sue a customer to recover the price of tobacco he sold at. Judgement: The purpose of the licence was to raise revenue for the government and hence the contract...
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...Topic 1 Introduction and Elements of a Contract LEARNING OUTCOMES By the end of this topic, you should be able to: 1. 2. 3. 4. Identify laws and Acts which govern the formation of a contract in Malaysia; Explain the definition of a contract; Discuss the basic elements in the formation of a contract; and Analyse the legal provisions regarding each element in the formation of a contract. INTRODUCTION In this topic, you will be introduced to the laws which govern the formation of a contract in Malaysia. You should understand the definition of a contract and each basic element in the formation of a contract, which are made up of offer, acceptance, consideration, capacity, intention and certainty. Students will not only find Malaysian Acts and cases applied in the discussions, but also those from England, India and Singapore. These are facts neces sary to support your answers during the examination. With a clear understanding of all the points above, you should be able to complete all the exercises given in this topic. 2 TOPIC 1 INTRODUCTION AND ELEMENTS OF A CONTRACT 1.1 INTRODUCTION, DEFINITION AND BASIC ELEMENTS OF A CONTRACT In Malaysia, the Contracts Act 1950 (hereafter referred to as CA 1950) governs the formation of a contract. The Sale of Goods Act 1957 governs contracts for the sale of goods, whereas hire-purchase contracts are governed by the Hire-Purchase Act 1967. Apart from these Acts, students will also study English cases and...
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...opportunity and wrote back an immediate letter of acceptance to Ahmad on Friday 6 June. However, Naiker’s letter of acceptance was delayed again and only reaches Ahmad on Monday 9 June. In the meantime, when Ahmad did not receive any replies from Naiker and believed that he is not interested in purchasing the piano anymore, and hence sold the piano to Janice, the third party in this case. [Issues] The issue is whether there is an enforceable contract even though Ahmad has no control over the postal strike that delayed the arrival of both the letter of offer and acceptance. At the same time, whether Ahmad is responsible for Naiker's loss of piano since he was unaware of the acceptance letter that was posted on Friday 6 June and only till it arrived on Monday 9 June and hence, Ahmad did not post any revocation of offer to Naiker. These can be supported by Agreement, Postal Rule and Revocation of Offer by Offeror. [Relevant Law and Application] Agreement is one of the essentials needed to form a contract. In terms of making an agreement, there must be an offer and an acceptance in return. In this case, it was clear that Ahmad has posted an offer by letter to Naiker and Naiker has also returned an immediate letter of acceptance back to Ahmad. Despite having delays for the letter of acceptance to reach Ahmad, it was still within a reasonable period of time frame and the contract was formed on the date of the postage of acceptance letter. (McGraw-Hill Education, 2009) Postal rule...
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...enters into it and it can be enforced against one another. An agreement enforceable by law can be formed with certain elements present in it. These elements include Proposal or Offer, acceptance, consideration, intention to create legal relations, capacity to contract and free consent. The question states that on the 3rd of September 2011, an offer letter was sent by Yatie, offering to supply handcrafts to Tina and in the offer it clearly states that it should be accepted in writing before 1st of October 2011. According to Section 2 (a) of Malaysian law, a proposal is said to exist ‘when one person signifies to another, his willingness to do or to abstain from doing anything, with a view to obtain the assent of that other person to the act or the abstinence’. It shows the readiness of the person who makes the offer to create a legal relation and to be bound by the law. As a general rule a proposal must be clear and communicated to the acceptor. The given scenario states that the offer made by Yatie is clear and hence on 4th September 2011, the offer has been communicated and received by Tina (acceptor). As per the situation, Tina instructed Anis (her staff) to fax the letter of acceptance. However, instead of sending fax, Anis sent a letter to Yatie on 6th of September 2011 as an acceptance of the offer. Therefore the question is whether the letter sent by Anis would be counted as an effective communication. Another question here is that whether the letter sent on above mentioned...
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...Offers may be terminated in any one of the following ways: Revocation of the offer by the offeror; counteroffer by offeree; rejection of offer by offeree; lapse of time; death or disability of either party; or performance of the contract becomes illegal after the offer is made. The general rule is that the revocation is effective only when it is made known to the offeree. Until it is communicated to the offeree, directly or indirectly, the offeree has reason to believe that there still is an offer that may be accepted. The offeree may rely on this belief. If the offeror seeks to revoke the offer, but the offeree accepts the offer before notice of the revocation, a valid contract is created. A conditional acceptance is a counteroffer. For example, if Jones accepts the $10,000.00 price, but adds a term by stating that new tires must be put on the car, this is a conditional acceptance and therefore a counteroffer. A rejection terminates an offer. A rejection is an offeree’s communication that an offer is unacceptable. When an offer states that it will be open until a particular date, the offer terminates on that date if it has not yet been accepted. This is particularly clear when the offeror declares that the offer shall be void after the expiration of a specific time. If the time passes, and the offeree attempts to accept the offer, this is in effect a counteroffer from the offeree and can be accepted or rejected by the offeror. If the offer does not specify...
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