Shima wrote a letter to Zul to sell her computer for RM2000.00.

Zul received the letter on

2.11.2004. Zul sent a letter accepting the offer at 3p.m on the same day. Zul had second
thoughts and decided to revoke his acceptance. He tried to contract Shima by phone at 8 p.m
on 2.11.2004 but failed to get through to Shima.

The next day zul went to Shima’s house and informed her that he revoked his acceptance.
Zul’s letter arrived on 4.11.2004. Shima insisted that there was a valid contract between them.

Advise Zul .

Answer :

To answer the issues, it is necessary to determine whether there is an agreement between

Shima and Zul. Agreement will come into existance when there is a proposal and acceptance
of it. The main relevant principle that can be use to solve this problem is the principle of
proposal, acceptance and revocation.

In the problem, there has been a proposal made by Shima, through a letter, to sell her
computer for RM2000.00. Proposal, according to Section 2(a) of the Contract Act 1950, is
said to be made when one person signifies to another his willingness to do something with a
view to obtaining the assent of that other to the act. For example, if A says to B that he wants
to sell his land to B, A is said to make a proposal because here A signifies his willingness to
sell his land in the hope of getting B’s assent to buy. Zul received the letter on 2nd November
2004. Zul has made the acceptance by posting a letter of acceptance at 3 p.m. on the same
day. According to the postal rule, Section 4(2) of the Contract Act 1950, the communication
of acceptance is complete as against the offeror when the letter of acceptance is posted. The
offeror is bound by the contract from the posting of the letter of acceptances. This is so
regardless of whether the letter reaches the offeror or not.

In the case of the Entores V Miles Far East Corporation (1955) 2Q.B. said that, ‘ when a
contract is made by post, it is clear law throughout the common law counties that acceptance
is complete as soon as the letter is put into the post box.
In this problem, since Zul had posted the letter of acceptance at 3 p.m on the same day, this
means that on this date, Zul is bound by the contract with Shima. Here, Zul revoking his offer
on the next day and informed Shima that he revoked his acceptance. Then shima receive the
letter of accaptance on 4 November 2004. Is the revocation of proposal effective?

According to Section 5(2), a acceptance may be revoked at anytime before the

communication of its acceptance is against the proposer, but must afterwards. The offeree
could revoked his acceptance at any time before or at the moment the letter of acceptance
reaches the offeror. This is explained in Bryne v Van Tienhoven (1880) 5 CPD 344, where the
court held that the contract existed and the revocation of proposal was not effective. The
reason being that the revocation of proposal was only communicated on 20/10 whereas the
acceptance was posted earlier, that is on 11/10. This is also explained in Dunmore v
Alexander, where the court held that the acceptance had been effectively revoked by the
offeree. Therefore, there was no contract.

In the case of Shima and Zul, Zul informed her that he revoked his acceptance as the letter of
acceptance of Zul was received afterwards, that is on 4 November 2004. Therefore, there is no
valid contract was concluded between Shima and Zul. As such, Zul is not bound by the
contract.