OFFER.pptx

Introduction
There are 3 main aspects of the law governing offers:
(i) meaning and requirements of offer;
(ii) distinction between offer and invitation to treat; and
(iii) communication and revocation of offers.
2

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.”
4

 In this case, the appellants were a company carrying on the business of
publishing books. The respondents were a firm of printers. The parties
entered into a business relationship regarding the printing of school
textbooks. There was an exchange of letters which commenced with the
respondents submitting quotations for the printing of the books. This
was followed by the appellants issuing the printing orders.
 The question before the Federal Court was whether the respondents'
quotations constituted a binding offer which when accepted by the
appellants by the issuing of the relevant printing orders, resulted in
a contract between them.
 After examining the quotations, the Court held that the quotations
were never intended to be a binding offer but was a mere supply of
information. The offer in this case was actually constituted by the
printing offers issued by the appellants.
Preston Corpn
Sdn Bhd v
Edward Leong
1982] 2 MLJ 22,
FC.
5

Salleh Abas
FJ stated as
follow:  An offer is an intimation of willingness by an offeror to enter into a
legally binding contract. Its terms either expressly or impliedly
must indicate that it is to become binding on the offeror as soon as
it has been accepted by the offeree.
 An examination of all the quotations in case did not seem to express
such intention.
 They were nothing more than a mere supply of information by the
respondents in response to the appellants' inquiry as to the price of
books to be printed and their delivery dates.”
6

A valid offer must satisfy certain requirements:
(i) it may be made specific person or to the world;
(ii) it may be made expressly or impliedly;
(iii) its meaning must be clear; and
(iv) it must be valid at law.
8

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Offer made to specific person or to the world
▹ An offer may be made to a specific person or persons, or it may be
made to the world or the public at large.
▹ In the classic case of Carlill v Carbolic Smoke Ball Co. [1892] 2
QB 484, QB; [18931 1 QB 256, CA., the defendants, proprietors of
a medical preparation called "The Carbolic Smoke Ball", issued an
advertisement offering to pay £100 to any person who contracted
influenza after using the smoke ball in a specified manner for a
specified period. The advertisement stated that the defendants had
deposited £1,000 with bankers to show their sincerity. The plaintiff
after seeing advertisement, bought and used the ball in the manner
prescribed caught influenza. The plaintiff sued the defendants for
£100.
.
9

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▹ In their defence, the defendants contended that the advertisement
was a mere puff and was not intended to create any binding
obligation. There was no offer to any particular person and the
plaintiff had failed to notify them of her acceptance.
▹ The Court of Appeal held that an offer can be made to the
world. It becomes a contract when anybody comes forward and
performs the conditions. In this case, there was an acceptance of
the offer by the plaintiff's conduct.
10

Offer may be
express or
implied
Section 9 of the Contract Act
“So far as the proposal or acceptance of any promise is made
in words, the promise is said to be express. So far as the
proposal or acceptance is made otherwise than in words, the
promise is said to be implied. “
 In Preston Corpn Sdn Bhd v Edward Leong 1982] 2 MLJ
22, FC., the Federal Court had also referred to an offer
made either expressly or impliedly.
11

Offer must be
clear in
meaning  An offer which is not clear may be held to be invalid for uncertainty (s.30
CA) .
 In an old case, Ahmed Meah & Anor v Nacodah Merican (1890) 4Ky 583
an agreement was made between the parties whereby, in consideration of
the plaintiff marrying the defendant's daughter, the defendant promised to
build and the plaintiff and his daughter a "house which must be a suitable
buillding”.The plaintiff sought specific performance of the agreement.
Pellereau J held that it was too vague to be enforced:
“There must be certainty as to the subject of the contract. If it is uncertain as to
the nature of the house to be built, if uncertain as to value, it would be difficult for
the Court to enforce it. The house is said to be a 'suitable house.' Suitable to
whom? To the bridegroom or father of the bride? The Court is left in doubt as to
what way it is to be suitable …I therefore hold the promise is void fix uncertainty,
and cannot be deemed to be specifically performed. I can give no damages for the
same reason.”
12

Offer must be
valid at law
▹ An offer must not contravene any provisions of the law otherwise it
amount to a non-existent offer not capable of acceptance by the
offeree.
▹ In Affin Credit (Malaysia) Sdn Bhd v Yap Yuen Fui [1984] 1
MLJ 169, FC. the appellant let a motor-car to the respondent under
a hire-purchase agreement. The respondent fell into arrears with the
payment and the appellant brought an action for the balance
outstanding under the hire-purchase agreement.
▹ The respondent alleged that the appellant had failed to comply with
various provisions of the Hire-Purchase Act 1967 (Rev 1978) Act
212. The issue which arose was whether non-compliance with s4(1)
of the Hire-Purchase Act, which requires the owner of the goods to
the prospective hirer a written agreement consisting of a summary
of the hirer's financial obligations under the proposed hire-purchase
agreement, would render a the hire-purchase agreement void ab
initio.
13

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 The respondent alleged that the appellant had failed to comply with
various provisions of the Hire-Purchase Act 1967 (Rev 1978) Act
212.
 The Federal Court held that the fulfilment of the condition set
out in s 4(1) of the Hire-Purchase Act was a condition precedent
for the hire-purchase agreement :
“… the plaintiff's claim was rightly dismissed by the
lower court, not because the hire-purchase agreement
was unenforceable, but because no agreement had in fact been
entered into by the parties. “
14

Introduction
 An offer should be distinguished from an invitation to
treat.
 Unlike an offer, an invitation to treat is a statement
which is not intended to be binding at law. An invitation
to treat merely invites in parties to make an offer.
 Invitations to treat often appear in the advertisements,
display of goods and tenders. Other aspects considered
are auctions and applications for club membership.
16

Advertisement
 Whether an advertisement is an offer or an invitation
to treat is a question of the intention of the party
placing the advertisement.
 In most cases, advertisements are treated as attempts
to induce offers unless on exceptional fact situations
as in Carlill's case.
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UNILATERAL BILATERAL
18

Unilateral
Contract
 Carlill’s case is an example of advertisements of unilateral contracts
which will usually be held as offers. In this case, the advertisement
promising reward of £100 if a person contracted influenza after
using the smoke was a promise in return for an act.
 Such a contract, when made, is called a unilateral contract.
The outstanding obligation is on one side only.
 In this case, the plaintiff having performed (used the smoke
ball and contracted influenza), the only outstanding
obligation was on the defendants to perform their promise to
pay the £100.
 Section 8 of the Contracts Act is a statutory recognition of
acceptance by conduct and of the concept of a unilateral
contract.
19

Bilateral
Contract
▹ A bilateral contract is one where the outstanding obligations remain on both
sides. In this situation, an offeror makes a promise in return for a promise by
the offeree.
▹ The case of Partridge v Crittenden [1968] 1 WLR 1204 illustrates the general
rule that advertisements are normally regarded as an invitation to treat. In this
case, the appellant inserted in a magazine an advertisement containing the
words "Quality British A.B.C.R. ... bramblefinch cocks, bramblefinch hens,
25s. each". The advertisement was inserted under the general heading of
"Classified Advertisements" and nowhere was any direct use of the words
"offers for sale". One Mr Thompson answered the advertisement, wrote and
enclosed a cheque for 30s to the appellant.
20

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 On the appellant's appeal against his conviction for unlawfully
offering sale a bramblefinch hen contrary to s 6(1) of the Protection
of Birds 1954, the issue arose whether the advertisement he inserted
was merely an invitation to treat or an offer for sale. The Court
allowed the appeal and held that the advertisement was not an
offer, but only an invitation to treat.
Ashworth J stated:
“…in my judgment the law of the country is equally plain as it was in
regard to articles in a shop window, namely that the insertion of an
advertisement in the form adopted here under the title "Classified
Advertisements" is simply an invitation to treat.”
21

Malaysian
Position
 The Malaysian position is similar to advertisements amounts to an
invitation to treat only.
 In Coelho v The Public Services Commission [1964]MLJ 12, the
appellant applied for the post of Assistant Passport Officer advertised in
the Malay mail newspaper. Subsequently, he was informed that he was
accepted. After being posted to the Immigration Office, he was informed
that his appointment (on probation) was terminated forthwith by payment
of one month’s salary in lieu of notice. He applied for a certiorari to
quash the decision. The Court held that the resulting applications was an
invitation to qualified persons. The resulting applications were offers.
The information conveyed to the appellant was an unqualified
acceptance. Therefore, the respondent had acted ultra vires in purporting
to terminate his appointment in a manner for officers on probation.
22

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 In a Malaysian case of MN Guha Majumder v RE Donough
[1974] 2 MLJ 114 an advertisement appeared in the Sarawak
Tribune (headed "Property for Quick Sale") for the sale by the
defendant of his house.
 The plaintiff, desiring to purchase the property inspected the house
twice and a number of telephone conversations took place between
the plaintiff and the defendant's agent.
 The plaintiff alleged that the defendant had accepted his offer to
purchase the house, but the defendant denied it. In this case, the
High Court did not discuss advertisement.
 On the facts, the Court held that there was no contract in
existence between the parties at the material time as there was
no clear intention of the parties to enter into a formal legal
relationship from the evidence adduced.
23

Display of
Goods
 A display of goods is also generally regarded as an invitation to
treat.
 In Pharmaceutical Society of Great Britain v Boots [1953]
1QB401, CA, the defendants carried business in the retail sale of
drugs. The sale premises comprised a single room adapted to the
self-service system. On entering the shop, the customer was
provided with a wire basket; and having selected the items which he
wished to buy, would put them in the basket and take them to the
cashier's desk at the exit, where the cashier would state total price
and receive payment.
 The Court of Appeal held that the play of goods on the
shelves was only an invitation to treat. It was for the
customer to offer to buy the goods. The contract of sale was
completed when the customer's offer to buy was accepted by
the seller in receiving the payment at the cashier's desk.
24

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 In Fisher v Bell [1961] 1QB 394, the Court held that the act of
displaying a knife in a shop window did not amount to an offer for
sale. The issue in this case whether- the shopkeeper's display in his
shop window of a "flick knife amounted to an offer of the knife for
sale contrary to s 1(1) of the Restriction of Offensive Weapons Act
1959.
 The Court held that it is perfectly clear that according to the
ordinary law of contract the display of an article with a price
on it in a shop window is merely an invitation to treat. It is in
no sense an offer for sale the acceptance of which constitutes
a contract ... In those circumstances I am driven to the
conclusion, although I confess reluctantly, that no offence
was here committed!
25

Tenders
▹ Invitations to tender are not normally considered to be offers
unless accompanied by words that the highest tender will be
accepted. The general rule relating to tenders can be found in
Spencer & Ors v Han & Ors (1869-4870) LR 5 CP 561.
▸ In this case, the defendants issued to the plaintiffs and other
persons in the wholesale trade a circular in the following
words: “We are instructed to offer to the wholesale trade
for sale by tender the stock in trade of Messrs G. Eilbeck &
Co ... which will be sold at a discount in one lot. Payment to
be made in cash ...". The plaintiffs sent in a tender which
turned out to be the highest tender; but it was not
accepted. The plaintiffs insisted that the circular amounted
to a promise to sell to highest bidder.
26

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▹ The Court held that the circular was only an attempt to ascertain
whether an offer could be obtained. Further, there was a total
absence of any words to the effect that the highest bidder would
be the purchaser. Willes J explained as follows:
▸ “… the question is, whether there is here any offer to enter
into a contract at all, or whether the circular amounts to
anything more than a mere proclamation that the
defendants are ready to chaffer for the sale of goods, and to
receive offers for the purchase of them. In advertisements
for tenders for buildings it is not usual to say that the
contract will be given to the lowest bidder, and it is not
always that the contract is made with the lowest bidder.
Here there is a total absence of any words intimate that the
highest bidder is to be the purchaser. It is a mere attempt to
ascertain whether an offer can be obtained within such a
margin as the sellers are willing to adopt.”
27

Exceptional
situations ▹ However, there are exceptional situations where an invitation to
make a tender is not treated as an invitation to treat but bears legal
consequences as occurred in Blackpool and Fylde Aero Club v
Blackpool BC [1990] 3 All ER 25, CA.
▸ In this case the defendant council owned an airport. It granted
concessions to operate flights. It sent an invitation to tender
to the plaintiff and six other parties all of whom were
connected to the airport. The plaintiff had been granted
similar concessions in 1975, 1978 and 1980. The invitation to
tender stated that the tenders were to be submitted in the
envelope provided and before the deadline and that late
tender would not be considered. The plaintiff sent the tender
in time to the post box but the post box was not cleared.
28

Continue…
 The tender was marked late when it reached the defendant was not
considered. The plaintiff brought an action against the defendant for
breach of contract as the defendant had warranted that tenders sent
before deadline would be considered. The issue was whether there '
contract between the parties.
 The Court of Appeal held that in the circumstances, an invitation to
tender can give rise to a binding obligation to consider tenders
which conform with the conditions of the tender. In the present
case, the tender was solicited by the council from selected parties,
all of whom were known to the council. The invitation to tender set
out a clear, orderly and familiar procedure. It was only right that the
tenderer who submitted a tender conforming to the deadline should
have it considered.
29

Auction
 The principles concerning auctions can be drawn from the cases.
First, an auctioneer’s request for bids is only an invitation to treat.
 Second, a notice that an auction will take place at a certain date is
also an invitation to treat and no claim can be made to recover for
loss of time and expenses incurred.
 Third, while an auctioneer's request for bids and notice of auction
are only invitations to treat, if an advertisement states that the
sale by auction is "without reserve", then such sale will be treated
as an offer.
30

Auctioneer's
request
forbids  The first principle is that an auctioneer's request for bids is
considered to be an invitation to treat. The bid itself is an offer
which the vendor is free to accept or reject.”
▹ In Payne v Cave 1789) 3 Term Rep 148, Lord Kenyon CJ explained
as follows:
▹ “The auctioneer is the agent of the vendor and the assent of both
parties is necessary to make the contract binding. That is signified
on the part of the seller by knocking down the hammer which was
not done here till the defendant had retracted ... Every bidding is
nothing more than an offer on one side which is not binding on
either side till it is assented to”
31

Continue..
 The general rule that in an auction, the sale is concluded at the fall
of the hammer is also applied in the Malaysia.
 In M & J Frozen Food Sdn Bhd & Anor v Siland Sdn Bhd &
Anor[1994] 1 MLJ 294, SC, in a case involving a sale of land in a
public auction, the Supreme Court held that at the fall of the
hammer, an agreement is concluded between the vendor and the
highest bidder. Thereafter, the vendor cannot offer the goods to
other prospective buyers and the bidder cannot retract his
acceptance. WanYahya SCJ stated:
“So a reference to a sale being concluded at the fall of the auctioneer's
hammer could only refer to that stage of the transaction of sale when
there is concluded an agreement between the vendor and the highest
bidder, the former to sell and the latter to purchase the goods.”
32

Notice of
Auction
 The second principle that a notice that an auction will take place at
a certain date is only an invitation to treat is derived from Harris v
Nickerson (1873) LR 8 QB 286.
 In this case, the defendant, an auctioneer, advertised in the
London papers that certain brewing materials, plant and
furniture would be sold by him at Bury St Edmunds on a
certain day and the following two days. The plaintiff attended
the sale but on the third day, on which the furniture was
advertised for sale, all the furniture were withdrawn. The
plaintiff brought an action against the defendant to recover
for his loss of time and expenses on the ground that the
advertisement amounted to a contract by the defendant the
things advertised would be actually put up for sale.
33

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▹ The Court rejected the plaintiff's claim and held that an
advertisement that goods will be sold on auction on a certain day
does not constitute a promise to potential bidders that the sale will
be actually held. To hold otherwise or to require an auctioneer to
give notice of withdrawal of the sale would be excessively
inconvenient and costly.
34

Auction
Without
Reserve  The third principle that an advertisement stating a sale by
"without reserve" is an offer can be seen in Warlow v Harrison
(1859) 1 E & E 309, the defendant and a Mr Bretherton were
auctioneers in a partnership who advertised a sale by auction
which contained the following: “three following horses, the
property of a gentleman, without reserve”. The plaintiff attended
the sale and made a bid of 60 guineas for one of the horses. A Mr
Henderson, the owner of the horse, immediately made bid of 61
guineas. The defendant therefore entered Mr Henderson's name
as purchaser in the sale book and refused to receive the money or
deliver the horse to the plaintiff, stating that he had knocked it
down to highest bidder and could not interfere in the matter.
35

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▹ The Court held that the sale should be without reserve:
the auctioneer in his advertisement had made a definite
offer to this effect, and the plaintiff, by making his bid in
reliance upon it had accepted the offer. In this case, the
Court also ruled that in a sale by auction "without
reserve", the vendor cannot bid at the auction.
36

Application
for club
membership ▹ In Abdul Rashid v Island Golf Properties Sdn Bhd [1989] 3 MLJ 376,
the issue was whether application for club membership was an
offer, or was the offer made by the club after considering the
application. In this case, the plaintiff applied to become a member
of the golf club owned, managed and operated by the defendants.
Here, the High Court did not use the language of an invitation to
treat but used the term "preliminary step”. Wan Adnan J stated as
follows:
▸ “In my view the plaintiff's application for membership was
merely a preliminary step. The offer for membership came
from the defendants after the defendants had considered
the plaintiff's application. The contract between the plaintiff
and the defendants was formed only when the plaintiff
accepted the offer by making the payment of the entrance
fee and the first subscription” .
▹
37

Legal Issues
Items on Internet website: Invitation to treat or offer?
 The Electronic Commerce Act 2006 (ECA) introduced on 31
August 2006 and came into force on 19 October 2006.
 The Act was to facilitate some legal issues that arises in electronic
transaction, however, there are some legal issues remain
unanswered.
38

Continue…
▹ Section 7 of ECA:
(1)In the formation of the contract, the communication of
proposals, acceptance of proposals, and revocation of
proposals and acceptance or any related communication may
be expressed by electronic message.
(2)A contract shall not be denied legal effect, validity or
enforceability on the ground that an electronic message is
used in its information.
▹ Section 5 of the ECA, “electronic message”, information generated,
sent, received or stored by electronic means.
39

Continue…
 The rules on advertisements on websites may be dealt with the
same manner with shop displays due to interactivity of websites.
 There is no determinative case law in Malaysia. The actual legal
position is as illustrate in the United Kingdom.
 The issue whether website advertisement is an invitation to treat or
an offer is yet be solved.
40

Section 3 of
the Contracts
Act 1950  Section 3 Contracts Act is the general provision on the
communication of acceptance of offers as well as the revocation of
offers and acceptances.
 The communication of proposals, the acceptance of
proposals, revocation of proposals and acceptances,
respectively, 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.
42

Section 4(1) of
the Contracts
Act 1950
“The communication of a proposal is
complete when it comes knowledge of
the person to whom it is made.”
43

Illustration (a) ▹ This section is further explained through Illustration (a): A proposes
by letter, to sell a house to B at a certain price. The communication
of proposal is complete when B receives the letter.
▹ There can be no valid offer if there are two cross offers or counter
offers. In Tinn v Hoffman & Co, (1873) 29 LT 271, HL , the
House of Lords discussed the effect of two offers, identical in
terms, which had crossed in the post. It was held by five judges
against two that on the facts of that case no contract had been
concluded. Two of the judges were of the view that the parties were
not ad idem as the letter in question contained diverse terms. The
majority judges considered that cross-offers could not form a
contract.
44

Introduction  There may be situations where an offeror who has
communicated his offer changes his mind and wishes to
withdraw his offer.
 The Contracts Act provides for the rules as to
(i) when an offer may be revoked and when the
communication of the revocation is complete; and
(ii) the different modes to revoke an offer.
46

Section 5(1)
and Section
4(2)(a) of the
Contracts Act
1950
When offer may be revoked and when communication complete
 Section 5(1) of the Contracts Act sets out when an offer may be
revoked.
“ A proposal may be revoked at any time before the communication of
its acceptance is complete as against the proposer, but not afterwards.
“
 This section must be read with s 4(2)(a) of the Contracts Act (on
communication of acceptance as against the proposer) which
states that:
The communication of an acceptance is complete -
(a) as against the proposer, when it is put in a course of transmission to
him, so as to be out of the power of the acceptor;
47

Continue…
▹ Reading both sections together, thus, an offer may be revoked at
any before the acceptance has been sent to the proposer.
▹ Therefore, even the proposer has put his proposal in a course of
transmission to the acceptor, the proposer is still free to revoke it as
long as the acceptor's acceptance has not been put in a course of
transmission to the proposer, so as to be out of the power of the
acceptor.
48

Illustration
"A may revoke his proposal at any time before or
at the moment when B posts his letter of
acceptance, but not afterwards".
49

Section 4(3) of
the Contracts
Act 1950  Section 4(3) of the Contracts provides that the communication of a
revocation is complete:
(a) 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; and
(b) as against the person to whom it is made, when it comes to his
knowledge.
50

Continue.. ▹ Thus, the communication of revocation of a proposal is complete as
against the proposer who revokes, when he has sent out the notice of
his revocation. However, it will only be complete as against the person
to whom it is made when the said person receives the notice of
revocation of the proposal.
▹ In Byrne & Co v Leon Van Tienhoven & Co. [1874-1880] All ER 1432, the
defendants posted a letter in Cardiff on October 1, addressed to the
plaintiffs in New York, offering to sell 1,000 boxes of tinplates. It should
be noted that it takes 10 or 11 days for a letter posted at either place to
reach the other.
▹ On October 8, the defendants posted a letter revoking the offer. The
plaintiffs telegraphed their acceptance on October 11 and confirmed it
in a letter posted on October 15. The letter of revocation reached the
plaintiffs October 20.
51

Continue…  It was held that the revocation was inoperative until October 20,
that the offer, therefore, continued to be open up to that date, and
that it had been accepted by the plaintiffs in the interim.
 It may be taken as now settled that where an offer is made and
accept by letters sent through the post, the contract is completed
the moment the letter accepting the offer is posted (Harris's Case
(1872) 26 LT 78L Ch App 587; Dunlop v. Higgins (1848) 1 HL Cas
381), even although it never reaches its destination ... they are
based upon the principle that the writer of the offer has expressly
or impliedly assented to treat an assented to him by a letter duly
posted as a sufficient acceptance and notification to himself, or, in
other words, he has made the post office his agent receive the
acceptance and notification of it; but this principle appears to me
to be inapplicable to the case of the withdrawal of an offer.
52

Continue…
 In this particular case I can find no evidence of any authority in fact
given by the plaintiffs to the defendants to notify a withdrawal of
their offer by merely posting a letter; and there is no legal principle
or decision which compels me to hold, contrary to the fact, that the
letter of the 8 October is to be treated as communicated to the
plaintiffs on that day or on day before the 20th, when the letter
reached them.
 But before that letter had reached the plaintiffs they had accepted
the offer, both by telegram and by post; and they had themselves
resold the tin plates at a profit. In my opinion the withdrawal by the
defendants on the 8 October of their offer of the 1st was
inoperative; and a complete contract bind on both parties was
entered into on the 11 October, when the plaintiff accepted the offer
of the 1st, which they had no reason to suppose had been
withdrawn.
53

Section 6 of
the Contracts
Act 1950
 The Contracts Act also sets out various modes to revoke an offer.
Section 6 of the Contracts Act provides:
A proposal is revoked -
a) by the communication of notice of revocation by the proposer to the
other party;
(b) by the lapse 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 the acceptance;
(c) by the failure of the acceptor to fulfil a condition precedent to
acceptance; or
d) by the death or mental disorder of the proposer, if the fact of his
death or mental disorder comes to the knowledge of the acceptor
before acceptance.
55

Notice of
revocation
▹ The most common mode of revoking an offer is to give notice
revoking the offer. The rules explained above as to when an offer
may be revoked and its communication is complete applies to this
mode of revoking.
▹ In Offord v Davies & Anor, (1862) CBNS 748; 142 ER 1336 the
Court explained why the promisor has not to revoke a promise
made. Erie CJ stated:
“… the demurrer raises the question whether the defendants had a right
to revoke the promise. We are of opinion that they had… This promise
by itself creates no obligation. It is in effect conditioned to be binding if
the plaintiff acts upon it, either to the benefit of the defendants, or to
the detriment of himself. But, until the condition has been at least in
part fulfilled, the defendants have the power of revoking it.”
56

Continue… ▹ Section 6(a) of the Contracts Act provides that the notice must be
given for the proposer to the other party. However, the English
courts have held that a revocation is valid even though the notice
or knowledge concerning the revocation was derived from a third
party.
▹ In Dickinson v Dodds (1876) 2 Ch D 463, CA. the defendant, on
Wednesday, June 10, gave the plaintiff a written offer to sell a
house for £800, "to be left over until Friday, June 12, 9.00 a.m.".
On Thursday, June 11, the defendant sold the house to a third
party; Allan, for £800. On that evening the plaintiff was told that
the property was sold to Allan by a fourth man, Berry. Before 9.00
a.m. on June 12, the plaintiff handed to the defendant a formal
letter of acceptance.
The Court of Appeal held that the plaintiff could not as it cannot be said
thereafter that there was in existence the same mind between the
plaintiff and the defendant to make a contract.
57

Lapse of time ▹ An offer once received, must be accepted within the time
prescribed in the offer or if no time is prescribed, within a
reasonable time. Failure to do so may deem the said offer to be
revoked as provided in s 6(b) of if Contracts Act.
▹ In Macon Works & Trading Sdn Bhd v Phang Hon Chin& Anor
[1976] 2 MLJ 177, in relation to an option to purchase land, the
Court stated that an offer lapses after a reasonable time not
because this must be implied in the offer but because failure to
accept within a reasonable time implied rejection by the offeree.
As a consequence, the Court can take into account the conduct of
the parties after the offer was made in deciding whether the
offeree has allowed too long a time lapse before accepting. In the
case, based on the facts, the option was in fact revoked well
before if purported intention to exercise the option.
58

Continue..  What is a reasonable time is a question of fact in each case. An
offer to take up shares in a company was held to be revoked by the
lapse of six months without hearing anything from the company.
 In Ramsgate Victoria Co v Montefiore (1866) LR 1 Ex 109, the
defendant applied for shares in the plaintiff company in June and
paid a deposit into the company's bank. He did not hear from the
company until the end of November, when he was asked to pay for
the balance due for the shares that had been allotted to him. His
refusal to take up the shares was upheld by the Court on the
ground that the interval between June and November was
excessive. The defendant's offer should have been accepted, if at
all, within a reasonable time.
59

Failure of
acceptor to
fulfil
condition
precedent to
acceptance
 Under s 6(c) of the Contracts Act, where there are condition
precedents to be fulfilled prior to acceptance, the failure to do so
will cause the offer to be revoked.
 In Aberfoyle Plantations Ltd v Khaw Bian Cheng [1960] MLJ 47, PC
(Appeal from Malaysia) the vendor failed to fulfil a condition
precedent specified in the contract, namely to obtain the renewal
of several leases relating to the land which was the subject matter
of the contract. The condition being unfulfilled, the purchaser was
entitled to the return of his deposits paid.
 In Am Financings Ltd v Stimson,51 [1962]1WLR1184,CA., the
Court of Appeal held that there was no concluded contract as the
offer made by the defendant to purchase the car was conditional
upon the car remaining in substantially the same condition until
the moment of acceptance. In this case, the car was stolen and
recovered in a badly damaged condition.
60

Section 6(d) of
the Contracts
Act 1950  Under s 6(d) of the Contracts Act, if a proposer has died or has
become mentally disordered and this fact is known by the acceptor
before acceptance, the acceptor cannot thereafter accept the offer
which is thus considered revoked.
 The reasoning is the same as in Dickinson v Dodds (1876) 2 Ch D
463, CA. of a potential acceptor who wished to purchase property
and was informed by a third party that the seller had already sold
the land to another. In such a situation, there cannot be said to be a
consensus of mind between the parties.
61

Continue…
 Section 6(d) provides for the effect of death on the revocation of
offers. A general provision in the Contracts Act on the effect of
death contractual obligations is s 38(2) which states:
 Promises bind the representatives of the promisors in case of death
the promisors before performance, unless a contrary intention
appears from the contract.
 Thus, the general rule is that death does not revoke all contractual
obligations entered into unless a contrary intention appears from
contract.
 Section 6(d) of the Contracts Act also provides that a proposal is
revoked by the mental disorder of the proposer. The Contracts Act
requires that persons who enter into contract must be competent to
contract, that is, they have reached the age of majority and are of
sound mind (ss 10,11 and 12 of Contracts Act).
62

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