CONTRACT LAW (2)
2. ACCEPTANCE REVOCATION(official cancellation) OF OFFER AND ACCEPTANCE
Sec. 2(b) Contract Act 1950 say that:
“when the person to whom the proposal is made signifies
his assent thereto (agree with the proposal after fully
understand it), the proposal is said to be accepted:
a proposal, when accepted, becomes a promise;”
ELEMENTS OF ACCEPTANCE
1. The acceptance of that proposal must be absolute and
unqualified by virtue of section 7(a).
• CASE : HYDE V. WRENCH [1840] 3 Beav. 344 ER 132
• The Def. offered to sell his estate to the Pl. on 6 Jun
for 1000 pound. On 8 June, in reply, the Pl. made a
counter proposal to purchase at 950 pound. When
the Def. refused to accept this offer on 27 June, the
Pl. wrote again that he was prepared to pay the
original sum demanded. The Court held that no
contracted existed between them. The Pl. had
rejected the original proposal on 8 June so that he
was no longer capable of accepting it later.
2. An acceptance must be made within a reasonable period
under section 6(b).
3. Acceptance must be expressed in some usual and
reasonable manner, unless the proposer prescribe the
manner in which it is to be accepted under section 7(b).
• Sec .7(b)
“In order to convert a proposal into a promise the
acceptance must­(b)If the proposal prescribes the
manner in which it is to be accepted, and the acceptance
is not made in that manner, the proposal may within a
reasonable time after the acceptance is communicated to
him, insist that his proposal shall be accepted in the
prescribed manner, and not otherwise; but, if he fails to
do so, he accepts the acceptance.
COMMUNICATION OF ACCEPTANCE
Acceptance is only effective when it has been
communicated. It’s can be made by word or mouth,
letter, telex, facsimile or recorded message.
In Malaysia the Contract Act stipulates different times
when the communication of an acceptance is complete.
• Section 4(2)(a) To Offeror when it is put in a course
of transmission to him.
• Section 4(2)(b) To Offeree when it comes to the
knowledge of the Offeror.
CASE : IGNATIUS V. BELL [1913]2 F.M.S.L.R.115.
• Both parties had agreed to use a post as a means of
communication. Defendant offered to sell his land
to the plaintiff until August 20th. The plaintiff sent
a notice of acceptance on August 16th but it was
not delivered till August 25th. Court held that there
can still be an agreement because the notice had
been posted on August 16th even though the
offeror did not know about the acceptance.
1. Section 5(1) provide that a proposal may be revoked at any
time before the communication of its acceptance is
complete as against the proposer, but not afterwards.
2. A proposal may be withdrawn in any of the following
circumstances:
Communicating the notice of revocation by the
proposer to the party to whom the proposal was
made under section 6(a).
The time prescribed in the proposal for its
acceptances elapses, under section 6(b).
The failure of the acceptor to fulfill a condition
precedent to acceptance under section 6(c).
The Death or mental disorder come to then
knowledge of the acceptor before acceptance under
section 6(d).
COMMUNICATION OF REVOCATION
1. Complete as against the person who makes the revocation
when it is put in the course of transmission to the person to
whom it is made by virtue of section 4(3)(a).
2. Completed as against whom it is made only when it comes
to his knowledge by virtue of section 4(3)(b).
3. CONSIDERATION
Consideration is what distinguishes a bargain or contract form
gift. Something of value in the eyes of the law (need not be of
market value). Price to be paid for the promise. May consists of
money, goods, promise, services, profit.
Section 26, the general rule in a contract is that an
agreement without consideration is void.
Section 2(d) : the word consideration is when at
the desire of the promisor or any other person has done or
abstained from doing, or does or abstains from doing, or
promises to do or abstains from doing something, such act
or abstinence or promise is called a consideration for the
promise.
TYPES OF CONSIDERATION
1. PAST CONSIDERATION
An act which has been performed before the promise was
made. Example: Ali found Abu's wallet, and he returns the
wallet to Abu. Abu promises to give RM200 to Ali as a
reward.
2. EXECUTED CONSIDERATION
An act which has been done to fulfill the contract.
Example: The offer made by one party that open to public.
Whoever found and return Ali's cat will get RM200 as a
reward.
3. EXECUTORY CONSIDERATION
An act or promise that will be done in future. Example: Ali
promised to sell his superbike to Abu. Abu agree to pay RM
50K to Ali when Ali delivers his superbike to Abu's house.
Both parties have made a promise but the promise has not
been done but it will happen in future.
By-7BidadariSyurga
4. INTENTION TO CREATE LEGAL RELATIONS
All contract is an agreement but not all agreement is
contract. Intention is the most important element which will
change an agreement to contract. Both parties must intend
that the agreement is to be binding on them (i.e. they have
agreed to bear the duties under the contract).

COURT PRESUMPTION

1. NO LEGAL INTENTION
– Family Agreement (Domestic and social)
Case Balfour v. Balfour
A married couple who live in Sri Lanka returned to
England for a vacation. The husband later returned to
work in Sri Lanka, but the wife stayed back in England
on doctors advice. He promised her £30 a month until
he returned. Later, he wrote to the wife saying that it
would be better if they remained apart. The wife sued
him on the promise to pay her £30 a month. The Court
of Appeal held that the arrangements made between
husband and wife was not a contract attended by legal
consequences. The presumption that there was no
intention to contract was not rebutted by the wife,
Mrs. Balfour. Therefore, they were presumed to have
no intention to contract.

2. HAVE LEGAL INTENTION

– All Commercial agreement are Contracts.

By-7BidadariSyurga