TUNKU ABDUL RAHMAN UNIVERSIYTY COLLEGE

BBBL2113 INVESTMENT INDUSTRY LAW

TUTORIAL 1:

LAW OF CONTRACT (OFFER & ACCEPTANCE)

1. (a) Adam makes an offer to sell his entire collection of his Cahflow Board Game to Jess
for RM100, Adam told Jess that he will keep the offer open for a week. Two days
later, Adam informs Jess that he has decided not to sell the Board Game anymore.
Discuss.
Adam is allowed to revoked the offer because Jess hasn’t accept the offer which means that is
not acceptance created and there is no agreement form between them.

(b) Would you answer be different if Adam has accepted from Jess a RM5 deposit to
keep his offer open for 7 days?
-Jess become offeror and Adam become offeree
- pay RM5 deposit is not as acceptance
- Adam cannot sue Jess if Jess don’t buy the boardgame after 7 days
Law - Sec 2(a) offer to act or abstain from doing anything with the intent to obtain the
assent of the other party, Jess is signifying to Adam her willingness to pay RM5
deposit in a will to obtain Adam assent to keep offer open for 7 days.
Application - Adam has put forward his acceptance by accepting the RM5 deposit the
promise to keep the offer open for 7 days is the consideration
Conclusion - Adam must keep the offer open for 7 days and he cannot revoked the offer,
unless Jess fails to fulfill the condition of the offer when the due date arrives
( otherwise deem to breach contract)
If Adam has accepted RM5 deposit from Jess which mean there are offer and
acceptance form between them. Jess was accepted the offer from Adam. Therefore,
Adam cannot revoked the offer.

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BBBL2113 INVESTMENT INDUSTRY LAW

2. 1st May – Ali in Alor Star writes to Muthu in Johor and enquire if he would sell his
superbike RX100 to him.
3rd May – Muthu receives Ali’s letter of offer. In the afternoon of the same day, Muthu
reply to Ali that he has accepted his offer to purchase his superbike RX100 for
RM15,000 and asked Ali to make the payment in 7 days.
10th May – Muthu delivered the superbike to Ali and demand for the payment. Ali denied
there is a contract between them and refused to pay Muthu.

Considering the facts above and discuss whether there is a contract formed.
Issue - Whether there is a valid contract between parties.
Law - Section 2(a) Contract Act 1950 - explain offer
Invitation to treat
Section 2(b) Contract Act 1950 - acceptance
Application - Explain this is a near situation of ITT, Muthu is offeror and Muthu is offeree.
Conclusion - The letter wrote by Ali is ITT, there is not contract between form between
Muthu and Ali.

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BBBL2113 INVESTMENT INDUSTRY LAW

3. In her Face-book, Jane offered to sell her used lap-top for RM2500.00 with her personal
Investment Industry Law notes in it. Ben replied and agrees to purchase it for
RM2000.00. Jane replied ‘hello, you must be kidding’. Ben replied that he is
accepting what she originally asked for. Jane did not reply to Ben. Discuss.
Issue: Can Ben accept the offer that Jane made to him after he made a counter offer?
Law : The case of Hyde v Wrench case
Application: Based on Hyde v Wrench,
Conclusion: There is no binding contract between Ben and Jane, Jane did not signify her assent
to

There was a counter offer happened between Jane and Ben. When Ben requested the price of
RM2000 to purchase Jane’s notes, there was not acceptance because Ben rejected the original
offer and Ben became a new offeror. In the case of Hyde v Wrench, the defendant offered to
sell a farm for $1200 but the plaintiff want to buy at $950. The plaintiff made a counter offer but
rejected by defendant. The court held that, there was no offer for plaintiff to accept and he failed
to sue the defendant. Therefore, Jane as the original offeror who can reject Ben’s counter offer.

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BBBL2113 INVESTMENT INDUSTRY LAW

4. Ben meets Jane in the building lobby on a Monday morning. He offers to purchase
Jane’s hand-phone for RM1,000.00 and states that if he does not hear from her by
tomorrow, he considers the hand-phone as sold to him. Jane smiles and walks to the
lift. Two days passed, Jane did not respond to Ben. Discuss whether is there a
contract?
Issue: Can Ben prescribe silence as acceptance?
Law:
Application: Jane did not signify her assent to Ben’ proposal which means that there is no
contract.
Conclusion: Jane is not obliged to sell Ben her phone as there is no contract.

Either there is contract formed between Ben and Jane.Ben prescribe Jana accept his offer due
to Jana didn’t respond him. According to S2(b) Contract Act 1950, when the offeree made
signifies his assent, the proposal become accepted. In order to signify his assent to proposal,
offeree has to communicate his acceptance of proposal to the offeror. In the case of Felthouse v
Bindley, the offeror offered to buy the house from his nephew for $30 adding but his nephew
didn’t reply anything. After that, the offeror prescribe silence as acceptance. The court held
there was not contract formed because his nephew didn’t communicate his acceptance with
offeror. Therefore, the offeror cannot prescribe silence as acceptance. There was no contract
between Ben and Jane because Jane didn’t signify her assent. The acceptance is not complete.

STRICTLY FOR TARUC STUDENTS ONLY