UNIVERSITI TUNKU ABDUL RAHMAN

JAN2022 TRIMESTER

UKML1053 BUSINESS LAW

TUTORIAL QUESTIONS AND ANSWERS

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TUTORIAL 2: Proposal & Acceptance

1. Define a ‘contract’. Explain the essential elements necessary in the formation of a

valid contract.

2. Bakar is the President of a mountain climbing association situated in Kampar. To

encourage and promote the sport of mountain climbing in Kampar, he inserted an
advertisement in the local newspapers dated 15th April 2017. In it, he promised that he
would pay a sum of RM 5,000 to the first person who reaches the summit of Mount
Kampar. The race was scheduled to commence on 1 st May 2017 at 8.00 a.m. On the
day of the race, the participants gathered in the morning at the foot of Mount Kampar.
The race began at 8.00 a.m. Simon was the first person to reach the summit.
Thereafter, he approached Bakar to claim the winning price money of RM 5,000 but
Bakar refused to pay him stating that it was merely an advertisement and that there
was also no acceptance of participation from Simon.

Advise Simon.

Would your advice differ if Bakar had used a loudspeaker to inform the climbers that
the mountain climbing event is cancelled after the climbers had already started
climbing the mountain?

3. Babu resides in Kuala Lumpur. His father has left him a house which is located in
Penang. Babu has decided to sell the house and utilise the proceeds from the sale to
purchase a house in Kuala Lumpur.

On 19 November 2016, Babu wrote to his good friend Joe offering to sell his house
for RM 250,000. Joe received this letter by post on 21 November 2016. On 26
November 2016, Joe posted his reply accepting Babu’s offer.

In the meantime, Babu’s neighbour, Beng who was aware of Babu’s intention to sell
his house, offered to buy the house for RM 300,000. Babu decided not to accept
Beng’s offer for the time being since he wanted to first revoke the offer he had made

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to Joe. Babu then immediately wrote and posted a letter to Joe on 25 November 2016,
revoking his offer.

On 27 November, Joe’s wife, Sandra, noticed a beautiful house next to Babu’s house
which was being offered for sale at only RM 200,000. Sandra asked Joe to revoke his
acceptance of Babu’s offer. Joe tried telephoning Babu on 27 November but he was
unable to contact Babu. Later, on the same day, Joe wrote and posted a letter to Babu
revoking his acceptance.

Beng revoked his offer made to Babu on 27 November 2016 and instead bought the
house situated next to Babu’s house for RM 200,000. Babu now wants Joe to buy his
house. Babu received Joe’s letter of acceptance on 27 November 2016. Joe received
Babu’s letter revoking his offer on 27 November 2016. Babu received Joe’s letter
revoking his acceptance on 29 November 2016.

Advise Babu whether there exists a valid contract with Joe or Beng for the sale and
purchase of his house.