Question 1

In answering this question, first and foremost, we need to identify the positions of the parties.
By the look of this case, Minah is the promisor meanwhile Mokhtar is the promisee in this
situation.

However, in examining Mokhtar’s situation, Mokhtar had requested that the purchased price
of a laser jet printer RM600 must include ink cartridge. Therefore, the issues arose were
whether the request is considered as a mere seeking request or counter-proposal and
whether Mokhtar’s acceptance for the first offer by Minah is valid?

Section 2(a) of the Contracts Act 1950 interpret proposal as “when one person signifies to
another his willingness to do or 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”. Proposal or
similarly known as offer is when a person willingly do an act upon a certain terms. Generally,
once proposal is rejected, the proposal is terminated. By virtue of Section 7(a) of the Contracts
Act 1950, the rule stated that in order to convert a proposal into a promise, the acceptance
must be absolute and unqualified. Therefore, if the purported acceptance is partially,
conditionally or qualified, it does not create a contractual relationship but it may as well be
treated as counter proposal. To form a valid contract, the proposal need be accepted as it is
and not imposing condition to it.

Thus, refusing and/or adding a new term of a proposal will have the effect of rejection of the
original proposal and becomes a counter-proposal. In the case of Hyde v Wrench [1840] EW
Ch J90, the salient facts were A agreed to sell his farm to B for 1000 Euro. B made a counter-
proposal of 950 Euro. Two days later, B wrote to A that he was prepared to pay 1000 Euro. A
refused and sued B for specific performance. The court held that there was no valid binding
contract between the parties. B had rejected the original proposal of 1000 Euro by the
counter-proposal of 950 Euro. B’s counter offer had rejected the original offer and thus there
was no offer for B to accept.

Meanwhile, in the case of Stevenson Jaques & Co v McLean [1880] 5 QBD 346, the defendant
offered to sell iron to the applicant at 40s per ton and gave him until Monday to accept the
offer. The applicant asked if the defendant would accept the payment of 40s over a two-
month period. The defendant did not reply to it and later sold the iron to a third party without
the knowledge of the applicant. The court held that there was a valid contract and the
applicant was merely seeking for further information.

Applying the facts to this case, Mokhtar stated in his email that the purchase price of the laser
jet printer should include the payment of ink cartridge. The word ‘should’ describe that
Mokhtar insisted that Minah included the ink cartridge and this is not a form of merely asking
question but a counter offer on part of Mokhtar. Furthermore, eventhough Mokhtar accepted
Minah’s first offer on the printer by telling Minah’s son, the acceptance of the first offer was
no longer valid as the first offer has been terminated and being replaced by the new counter
proposal that has been made by Mokhtar. In addition, Mokhtar’s action of accepting the first
offer and communicate it to Minah’s son is not valid because the acceptance need to be
communicate and reach consensus ad idem which means the acceptance need to reach the
knowledge of both parties. Since Minah’s son conveyed Mokhtar’s message on 30 th January,
the offer already terminated because the lapse of time of the offer.

Thus, we can conclude that because there exists a counter offer made by Mokhtar which
alters Minah’s offer, the counter offer terminates the original offer by Minah and therefore
no offer exists left for Mokhtar to accept.

Next, we need to examine Minah’s perspective in the situation. In the circumstances, the
issues arose were as follows: (a) whether Mokhtar’s counter-proposal had been legally
accepted by Minah; and (b) whether Minah had breached the contract by selling the printer
to someone else.

The general rule in the formation of a contract is firstly the making of a proposal. Section 2(a)
of the Contracts Act 1950 interpret proposal as “when one person signifies to another his
willingness to do or 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. However, generally an offer is
not binding unless it has been accepted by the promisee and the acceptance is deemed to be
communicated when it is actually brought to the notice of the promisor. Further Section 4 (1)
of the Contracts Act 1950 stated that the communication of a proposal is complete when it
comes to the knowledge of the person to whom it is made.

In the English Court of Appeal case of Entores Ltd v Miles Far East Corp [1955] 2 QB 327, the
Court held that the general rule of acceptance is that it must be by way of instantaneous
means. The learned judge, Lord Denning delivered the judgment by saying that :-

“Consider a case where two people make a contract by word of mouth in the presence
of one another. Suppose, for instance that I shout an offer to a man across a river or a
courtyard but I do not hear his reply because it is drowned by an aircraft-flying
overhead. There is no contract at that moment. If he wishes to make a contract, he
must wait till the aircraft is gone and then shout back his acceptance so that I can hear
what he says. Not until I have his answer am I bound.”

By virtue of the cited case, legally, an acceptance shall only be complete when it comes to the
knowledge of the promisor. In another case of Adam v Lindsell [1818] EWHC KB J58, the court
held the postal rule is an exception to the general rule that acceptance shall be by way of
instantaneous means. Therefore, in this case, when a promisee post a letter of acceptance to
the promisor, the acceptance is deemed to be legally completed upon the promisee post the
letter. Similarly, in the case of Household Fire and Carriage Accident Co Ltd v Grant [1874-80]
All ER Rep 919, CA (Eng), the court held that if the letter was lost in the post, the promisor is
bound in contract although he did not receive the letter of acceptance.

However, in the most recent case regarding postal rule, Thomas and Anor v BPE Solicitors
[2010] EWHC 306 (Ch.) the court held that the postal rule does not apply to internet
communication including emails.

Applying to the facts of this case, Minah proposed a laser jet printer at the price of RM600 to
Mokhtar and the acceptance must be made by 25th January 2011. On 10th January 2011,
Mokhtar wrote an email requesting (counter-proposal) that the purchase price of RM600 of
laser jet printer must include with ink catridge. Minah reads Mokhtar’s counter email on 11th
January 2011 and reply that she accepts Mokhtar’s proposal. However, Mokhtar’s email was
corrupted and he could not read Minah’s email of acceptance. By virtue of Section 4 (1) of
Contracts Act 1950, an acceptance shall only be completed upon the promisor noticing the
information of acceptance. Following the case of Household Fire above-mentioned, emails
are not considered as postal rule and the instantaneous means apply where the message need
to reach the knowledge of the promisor for the acceptance to complete.

To conclude, in answering the issues above-stated, there are no acceptance that has been
completed between Minah and Mokhtar. Therefore, as there was no acceptance completed,
there was no binding contract between the parties and Minah was not in breach of any
contract.
Question 2

In this situation, the issue arose was whether there was a valid contract exist between Mistro
Sdn Bhd and Bela.

A contract is an agreement that is enforceable by law. The formation of a valid contract must
have offer and acceptance. Section 2 (a) of the Contracts Act 1950 stated an offer is that
‘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’. For example, Abu wrote an offering to sell his motorcycle to Ali for RM10,000. In
this example, Abu willing to give Ali his motorcycle upon certain terms is an act of offer.
Generally, in Section 2 (b) further explain an acceptance is 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.

However, an advertisement inviting applications for a job is only an invitation to treat. It is

the applications by job seekers considered as proposals. This is aligned with the case of Coelho
v Public Services Commmission [1964] MLJ 12, the respondent advertise in the Malay Mail
inviting applications for the post of an assistant passport officer. The applicant made an
application and afterwards accepted. Later, due to misconduct, the applicant was informed
that his position ‘on probation’ was to be terminated. The court held that the advertisement
was merely an invitation to treat.

The material facts here that Mistro Sdn Bhd plan to organize a talent searching programme
named ‘Anak Panggung’. For this reason, Mistro Sdn Bhd put up an advertisement on ‘Anak
Panggung’ audition around the country. It comes to the knowledge of Bela about the audition
and she went for it which she managed to be shortlisted. Unfortunately, on final audition,
Bela was not selected among ten final contestants and wanted to sue the organizers for
breach of contract. Based on these material facts and applying the cited case here, it is clear
that the advertisement by Mistro Sdn Bhd was merely an invitation to treat. It is the
application of the applicants to join the audition that are considered as proposal.

To conclude, there was no binding contract between Mistro Sdn Bhd and Bela as the
advertisement was merely an invitation to treat. Bela application to join the audition.To form
a valid contract, there should exist a proposal by the promisor and acceptance by the
promisee.