MUHAMMAD DANIAL FAIZ BIN BORHANORDIN (2018413332) (MBA119 4C)

ASSESSMENT 1: PART B

(1) ISSUE

The issue is whether Daniel can claim the reward of RM 10 000 offered by Lela. It is
necessary to determine whether there is a contract between Lela and Daniel. Based on Lela
and Daniel case, it can be said that it is an offer instead of ITT since Daniel is accepted the
contract not the offer. From this cases, a proposal can be accepted if only the proposal is
communicated to the acceptor and the person who accepted the contract is knowledge about
the offer. On this case, Daniel is already know about the offer that Lela had given in local
newspaper that whoever finds Amirul and return him back to Lela, she would give that
person RM 10 000 as a reward. Hence, Daniel is entitled to the reward due to the offer is in
his mind before he sent Amirul back to Lela. From the Lela’s side, the offer is valid since
Daniel knows about the offer earlier before he had found the Amirul. The offer is said to
invalid if the offer is not in Daniel minds at all after he returned Amirul to Lela.

(2) LAW

Lela and Daniel case refers to the law of contract and the surrounding issues relating to
the offer and acceptance. Section 2(a) of the Contract Act 1950 states that “proposal is made
when one signifies to another his willingness to do or to abstain from doing anything, with a
view to obtaining the assent of the other to such act or abstinence”. Section 2(b) of Contract
Act 1950 states that “when the person to whom the proposal signifies his assent thereto, the
proposal is said to be accepted”. The legal recognition of an agreement, in the area of contract
law, is only given where a contract can be said to have been established between the parties
to an agreement. In other word, a proposal or offer which is something that capable of being
convert into an agreement by its acceptance. In Section 2(c) of Contract Act 1950, the person
who making the offer is called a ‘promisor’ or ‘offeror’ meanwhile the person accepting the
offer is called a ‘promisee’. The promisor must have declared his readliness to undertake an
obligation upon certain terms, leaving the option of its acceptance or refusal to the promise.
The advertisement which was placed by Lela on the local newspaper is capable of being
construed as an offer (Carlill v Carbolic Smoke Ball CO 5), which is binding on Lela. The
acceptance of this offer made by Lela, in the form of returning Lela’s son, Amirul is a valid
acceptance but only if the conditions set out by Lela is met.
 The Section 4(1) states that the communication of offer is complete when it comes to the
knowledge of the person to whom it is made. A proposal is said to have been communicated
only if the party who accepts it knew about the proposal. If a party accepting the proposal is
not aware about the proposal, then there is no contract. In case of R v Clarke, the Australian
Government offered a reward for information regarding murder of police officer. When X
and Clarke were arrested later, Clarke gave information to the police which lead to the arrest
of Y. Clarke was released for not guilty, after that he found out about the reward and he
claimed. The claimed was failed as when Clarke gave the information to the police, he did
not have the knowledge that there was a reward for giving information. Ignorance of offer is
similar to never hearing it or forgetting the offer hearing it.

Meanwhile, in case of Carlill v Carbolic Smoke CO 5, the defendant advertised that they
would offer to pay $1000 to anyone who still suffer from influenza after using their medicine.
The offer was made to the general public. So, when the plaintiff used the medicine and still
caught influenza, plaintiff was entitled to the $1000 as a promised.

(3) APPLICATION

According to Section 2(a) of the Contract Act, Lela has made an offer instead of the
invitation to treat (ITT) as she signifies to the public her willingness to give to whoever can
finds her missing son, Amirul and RM 10 000 as a reward. It means that the proposal is
already exist, different from ITT that only happens whenever someone actually inviting you
to make the proposal. The offer is valid as the proposal obeys the Section 2(a) of the Contract
Act. Next, according to Section 2(c), Lela is a promisor as she is the one who making the
offer and Daniel as the promises because he is the one who accept the offer. In this case, Lela
offering the reward to the general public whenever she advertised in the local newspaper
about the reward. This is quite similar with the case of Carlill v Carbolic Smoke Ball
CO5,that the offer is made to the general public.

Next, Daniel who had read the newspaper and seen the advertisement about the reward
that Lela offering has found Lela’s son and returned him to Lela. From this situation, we can
say that the proposal has been communicated as Daniel who accepts it knew about the
proposal. This obeys the Section 4(1) as the communication of offer is complete when it
comes to the knowledge of the person to whom it is made. This step is important as a
proposal must be communicated to the acceptor (Daniel) before it can be accepted. The
contract is not valid if Daniel is not aware about the proposal such in the case R v Clarke. In
that case, Clarke who gave the information to the police regarding murder of the police
officer, resulting in the arrest of Y does not know about the reward at that time. Thus, he
failed to claim the reward.

Besides that, the acceptance of the proposal has its own rule which is must be
communicated to the promisor either via mouth, letters, telex or by recorded message in order
to create the binding contract between parties. Once proposal is accepted, it becomes a
promise. This obeys the Section 2(b) of the Contract Act. The acceptance for case Lela and
Daniel is valid as Daniel accepts the exact proposal by Lela without any modification or
variation. As they are not negotiating, the agreement is already formed hence it obeys the
Section 7(a). The proposal can be invalid if Lela and Daniel are still negotiating such in the
case of Lau Bros v China Pacific Navigation Ltd 1965. In this case, no contract exists but
only negotiation. The acceptance can be not absolute if Daniel introduces a new term of offer
meaning he is counting a counter offer that can destroy the original offer. As an additional,
Daniel who found Amirul returns him to Lela in three days. Thus, the acceptance is valid
since it must be made within a reasonable time according to the Section 6(b).

(4) CONCLUSION

So, offer made by Lela is valid based on Section 2(a) of the Contract Act 1950, whereby
Lela made an offer to general public, then Daniel accepted the offer based on Section 2(b),
(c) whereby the promise or Lela has to reward Daniel as he already met the requirement by
returning Lela’s son. Section 4(1) also indicate that the offer is valid as the offer is already in
the mind of the acceptor or Daniel. So, the communication is completed. Daniel is entitled to
claim the reward of RM 10 000 offered by the Lela as there is a contract.