Tutorial 19.8.2021

PART A
Answer the following questions.

1. Explain the difference between a proposal and an invitation to treat in the law of
contract. Support your answer with examples. (6 marks)
A proposal is defined as when a person make an offer (offeror) with another person (offeree)
promising to do or abstain from doing anything with the intention that the promise would
be accepted. For example, in the case of Carlil v. Carbolic Smoke Ball Co, the defendant has
made an offer through an advertisement, offering 100 pound to those who caught influenza
after using their product (smoke ball). A proposal or an offer must be communicated with
another party and complete, if there is no communication or the communication is not
complete, hence there is no offer made.
Invitation to treat (ITT) is a preliminary step of communication, inviting a person to make an
offer. The ITT is just an invitation to another person to make an offer and it is not binding
because ITT on serve the purpose to attract people’s attention to acknowledge what is there
to be offered. Few examples of ITT are auction, advertisement and display of goods. In the
case of Pharmaceutical Society of Great Britain v. Boots Cash Chemist LTD (Southern) Ltd, it
was held that the good on the shelves were just an ITT and an offer was not made by
displaying the goods on the shelves but the offer only been made once the product was
presented to the cash desk for payment.
PART B
QUESTION 1
Ali went to a boutique to buy a pair of 'kebaya nyonya' as a birthday gift for his wife. After
selecting one which he thought his wife would like he walked towards the cashier's desk
to make the payment. Upon approaching the cashier, he noticed that the dress had a little
tear on the sleeve, and he decided not to buy it. He went to return the dress to the rack,
but the boutique owner insisted that he pays for it. Ali refused to do so, and the boutique
owner threatened to sue Ali. Advise Ali
a) What is the relevant issue in the above question? (2 marks)
Whether the display of kebaya Nyonya is the offer or the invitation to treat.
b) Define an offer and an invitation to treat according to the provision under the Contracts
Act 1950. (2 marks)
According to Section 2(a) of Contracts Act, an offer is made when a person (offeror) signifies
his willingness to do something or to abstain himself from doing anything with another
person (offeree) with the intention of obtaining the other person’s (offeree) assent.
Invitation to treat (ITT) is defined as an invitation to people to make an offer. It is a

preliminary step of communication of inviting another person to make an offer. The ITT is
not binding as it is just an invitation and not an offer.
c) Explain the relevant law and case law to the above-mentioned issue. (8 marks)
According to Section 2(a) of the Contracts Act 1950, an offer is made when the offeror
promises with the offeree to do or abstain from doing anything with the intention the offer
would be accepted. Ali has chosen a kebaya for his wife, but he did not put the kebaya
(offer) at the cash desk which signifies he has not made an offer with the boutique owner.
Next, communication of offer must be made and complete. According Section 3 of Contracts
Act 1950, the communication of proposal must be made by the offeror, in this case Ali.
According to Section 4(1) of the same Act, the communication of proposal is complete once
it comes to the knowledge of the offeree (boutique owner). In this issue, Ali has not yet made
an offer as he has not communicate the offer with the boutique owner. Furthermore, the
kebaya on the rack is just an invitation to treat. It is a preliminary step of inviting a person to
make an offer and it is not binding. For example, in the case of Pharmaceutical Society of
Great Britain v. Boots Cash Chemist LTD (Southern) Ltd, the defendant was being prosecuted
for selling listed poison as they had displayed the goods on the shelves. However, it was held
that the goods on the shelves are just an invitation to treat and not an offer. It is displayed
to acknowledge the customers about the product and inviting them to make an offer of
buying the product.
d) Is there a valid contract between Ali & the seller? State your reason and justification. (6
marks)
No, there is no valid contract. In above issue, Ali has not yet to make an offer with the
boutique owner as he has not yet present the kebaya (offer) to the counter for payment. The
Kebaya on the rack is simply an invitation to treat only just like in the case of Pharmaceutical
Society of Great Britain v. Boots Cash Chemist LTD (Southern) Ltd. An offer must be
communicated and complete according to Section 3 and 4(1). It is only occurred if Ali
presented the Kebaya at the counter to pay for it which signifies he is offering to buy the
kebaya. However, Ali did not do that and returned the kebaya back to the rack, hence there
is no communication of offer with the owner. The kebaya on the rack is now back to be an
invitation to treat and no longer an offer. Since there is no offer been made, a contract is not
formed. Therefore, there is no valid contract been made between Ali and the Owner.
QUESTION 2
Jenny has lost her Persian cat Coco. She advertised in a newspaper Metro Daily a reward
of RM1000 to anyone who found and returned Coco to her. Minah, Jenny's neighbour who
was cleaning her backyard found a Persian cat up on her mango tree. Knowing that the cat
belonged to Jenny, she returned it to her. Minah only knew of the promised reward the
next day after reading the advertisement in Metro Daily.
Advise Minah whether she can still claim the RM1000 reward money from Jenny
a) What is the relevant issue in the above question? (2 marks)
Whether Minah can still claim her reward money from Jenny even though she has no
knowledge she can claim reward after returning the cat.
b) Define an offer according to the provision under the Contracts Act 1950. (2 marks)
An offer is defined in Section 2(a) of Contracts Act 1950, when a person signifies his
willingness to do or abstain himself from doing anything with another person, with intention
the offeree would accept the proposal or offer.
c) Explain the relevant law and case law to the above-mentioned issue. (8 marks)
According to Section 2(a) of Contract Act, an offer is when a person signifies his willingness
to do or abstain from doing anything to another person, with the intention the offer would
be accepted. Jenny has made an offer by advertising reward to whoever found her cat. Next,
communication of offer must be made by the offeror and complete. This is aligned with
Section 3 and 4(1) stating that the communication of the proposal needs to be made by the
proposing party to another party and the it need to come to the knowledge of another party
(offeree) in order to be completed. Jenny who made the advertisement in a newspaper
signifies her communication of offer and Minah reading the advertisement signifies the
communication of offer is complete. However, a proposal is said to be communicated only if
the party who accepts the proposal knew and acknowledge about the offer. If the party
accepting the proposal is not aware of the proposal or offer, there is no contract between
them. For example, in the case of R v. Clarke, Clarke wanted to claim his reward after he
gave the information about the murder to the police. However, when he told the police the
information, he did not acknowledge the offer been made by the government of rewarding
those who provide the information. He only has the intention of clearing his name and not to
claim for the reward. Therefore, no communication of offer been made in this situation and
he cant claim for his reward.
d) Whether Minah can still claim the reward from Jenny? State your reason and
justification. (6 marks)
No, Minah cannot claim the reward. In the above situation, Jenny offered a reward to
anyone who found her cat in a newspaper. Minah has found the cat and return the cat
without knowing there is reward offered. According to Section 3 and 4(1), communication of
offer must be made by the offeror and must be complete. Jenny has fulfilled her part of
making a communication of offer by advertising a reward to those who found her cat. The
communication of offer needs to come to the knowledge of the offeree, who is in this case,
Minah in order to be complete. But Minah did not acknowledge about the offer when she
returned the cat back to Jenny just like in the case of R v. Clarke. Hence communication of
offer is not complete. Therefore, there is no offer been made between Jenny with Minah.
Since there is no offer been established, a contract is not formed and Minah cannot claim for
the reward.

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PART A

Answer the following questions.

Invitation to treat (ITT) is defined as an invitation to people to make an offer. It is a

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