LAW OF CONTRACT

PART 01
 What is
Contract?
• Agreement between 2 or more parties
that legally binding between them.
• S.2 (h) of the Contracts Act 1950-….
“An agreement enforceable by law”
• Essential Elements of the Contract:
1. Offer & Acceptance
2. Consideration
3. Intention to create legal relation
4. Certainty
5. Legal capacity
6. Free Consent
7. Legality of the Objects
8. Required Formalities.
1. OFFER
 Offer

Definition s2(a) CA
Communication of offer
s. 4 (1) of CA

ITT
Revocation of offer
 • An offer is a proposal

• Once it is accepted, it creates a legally

binding agreement

• A person who makes an offer is called

an offeror or promisor

• A person to whom the offer is made is

called an offeree or promisee
 Definition of an offer
• Section 2 (a) of CA 1950

S.2(a) – 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.
 Definition of an offer
• Example:

A, by offering to buy B’s car for RM

20,000 in the hope that B will accept

MAKING OFFER/ PROPOSAL

 Types of Offer
• An offer maybe:

❑ express
(verbally or in writing i.e. : agreement).

❑ implied
(one's act or behaviour).
 Types of Offer

• Section 9 of CA:

• If an offer is made in word or writing it is

said to express.
• If an offer is made by one act or
behavoiur it is said to be implied.
To Whom Offer can be made ?

1) Specific

2) General/ Public
 1) Specific

✓Addressed to specific person

✓Only the addressee may accept the
offer
✓Who is not addressee, cannot make
the acceptance
 Boulton v Jones
• Jones (D) normally had some business deal
with Brocklehurst. D offered to buy some
goods from Brocklehurst, but on the day the
order was sent, Brocklehurst had sold his
company to P.
• The P did not inform the D that the business
had changed hands. When the D knew the
goods had not come from Brocklehurst , he
refused to pay for the goods.
 • Held:

• D was not liable to pay for the goods.

• No contract between the P and the D.
Because the P had no right to accept the
offer which is not addressed to him.
 1) Public/General

✓Addressed generally to any one who may

satisfy all the terms or conditions
stipulated by the offeror.
✓One who satisfies all the terms of the
offer is considered as making acceptance.
✓Then, the offeror is bound to the
contract.
 Carlill v Carbolic Smoke Ball
⚫ the D issued an advertisement in which they
offered to pay 100 pound to any person who
suffered from influenza after having used one of
their smoke balls.
⚫ The P bought and used the smoke ball and
caught influenza. She sued the company for the
promised reward.
⚫ The D refused to pay because he argued that
one cannot make an offer with entire world.
 ⚫ The court held that:

the D has to pay the reward to P as an offer can

be made to the entire world.
Continue to Part 02