CHAPTER

1 OFFER
 WHAT IS AN OFFER? WHY IS IT SO
IMPORTANT?
- A proposal saying that I am willing to enter into a particular contract, that, after accepted by someone
else, the terms under the offer will be legally binding between us.
- So, when I did not perform what I offered, I can be sued.
 Key Aspects of
this Chapter

Definition & Requirement of
Offer
- Communication of Offer
& Revocation of Offer
Invitation To Treat or Offer? - Modes of Revoking
an offer
 DEFINITION OF OFFER/PROPOSAL

S2(a) of the Contracts Act 1950 - 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.

Elements of a proposal/offer :
- Signify to another
- Willingness to do / abstain from doing anything
- With a view to obtain assent
 Whether a Quotation can be considered as an Offer?
- Principle: Generally, No.
- Preston Corpn Sdn Bhd v. Edward Leong [1982] 2 MLJ 22
- The appellant was book publisher and the respondent was printer of books.
- When the appellant asked for the price of printing, the respondent had given 5 quotations to him.
- Then, the appellant had issued printing orders subsequently.
- The respondent argued that in 3 out of the 5 quotations, it has incorporated the clause to allow them
to own the firm positive, which is needed to print the books. Hence, the appellant shall be bound by
the quotation. 包含了允许他们拥有印刷书籍所需的公司正版的条款。 因此，上诉人应受此报
价的约束。
- The court now would need to consider whether quotation is an offer.
- If yes, the parties are bound to the quotation.
- If not, then when the appellant issued the printing orders, it cannot be said that they have accepted the
quotation. Only after the respondent had accepted the order by the appellant, and confirmed it, there is a
contract. In this circumstances, the quotation will not be bound to them.
Whether a Quotation can be considered as an Offer? (Continued…)

- The court found that an offer must:

- Indicate the willingness of the offeror to enter into a legally binding contract.
- The terms, either express of implied, must indicate that it will be legally binding as soon as the offeree
accepts it.
- The court looked into the quotation, and found that it appears to be merely a supply of
information to the appellant as to the price and information about the deal, which did not
show the intention of the respondent to be bound to the offer, as soon as the appellant accepts
it.
- Therefore, the quotation can only be said to be a supply of information.
 Whether a Quotation can be considered as an Offer? (Continued…)
Harvey v. Facey [1893] AC 552
Facts: Judgement:
- The telegram by Harvey had incorporated 2 questions. The
Will you sell us Bumper first question was asking the willingness of Facey to sell,
Hall Pen? Telegraph while the second question was asking about the lowest
lowest cash price. price. Facey had only addressed the second question.
- Therefore, the court cannot treat the answer by Facey on
the lowest price as an offer that is binding to him, and,
when after accepted by Harvey, would make him obliged to
sell. 不能将费西关于最低价格的回答视为对他有约束力的
Lowest price for 要约，哈维接受后，会迫使他出售。
B. H. P., £900 - In other words, when Harvey sent the telegram to Facey
Harvey Facey saying that he wanted to buy at £900, it can only be treated
as an offer that is required to be accepted by Facey, and the
contract can only be said to be completed when Facey had
Subsequently, Harvey replied Facey that they agreed to buy with the accepted the offer.
sum asked by him. Upon being refused to give possession by Facey, - The court further noted that a mere statement of the lowest
Harvey instituted a legal action. 在被费西拒绝占有后 price that the seller would sell would not make him obliged
to sell at that price to the person making the inquiry.
 Requirements
of an Offer

Must be issued to a May be made

Meaning must be Must be Valid in
Specific person or Expressly or
Clear Law
to the World Impliedly
 1. An offer must be made to a Specific Person or to the World
- The main principle is that an offer is not only able to be
made to a Specific Person, but can also be made to the
WORLD AT LARGE.
- This principle has been laid down 提出 in the case of
Facts:
Carlill v Carbolic Smoke Ball Co. [1892] 2 QB 484.
• The respondent had posted an advertisement saying that they are going to
reward any person 100 dollars if the person had used their product in a particular Judgement:
manner and had contracted the influenza. 感染了流感 They had also stated
- The court held that it is not appropriate for the respondent to argue
that 1000 dollars have been deposited to show their sincerity. The appellant,
having faith on the advertisement, bought the product, used it in the way that they are contracting with the world if the appeal was to be
prescribed, but was caught into influenza after using it. allowed. It is because, when an offer is made to the world at large,
• Upon being refused by the defendant for the reward, he brought the contract will only be entered into with a portion of the public
the claim before the court. In the respondent’s defence, he argued that have fulfilled with the conditions.
that the advertisement do not amount to a promise as it was not - Therefore, it is nothing wrong for an offer to be made to the world
intended to create a binding obligation with any parties and it was at large.
a mere puff. Moreover, they also argued that it was impossible for - Moreover, the court also noted that the respondent’s deposition of
them to contract with the world as the advertisement was not made 1000 dollars to show their sincerity had made it more clear that the
to anybody in particular. 该广告并不等于承诺，因为它并没有意图与任 respondent had made a promise.
何一方建立有约束力的义务，它只是一种吹捧。 此外，他们还认为，他们
- In this case, when the appellant had fulfilled the conditions
不可能与世界接触，因为广告不是针对特定的人 . In that sense 在这 stipulated in the offer, he is said to have accepted it and a contract
层意义上 , the plaintiff shall not be able to claim for the reward, was thereby formed between them. So, the respondent was obliged
as there is no offer issued to him. to perform his part of the contract.
 2. An offer may be made Expressly or Impliedly
- Principle: An offer made in an implied manner is also Implied
Implied Agreement
valid in law. Agreement to serve
- S9 of the Contracts Act 1950 - So far as the proposal or to pay

acceptance of any promise is made in words, the promise

is said to be express. So far as the proposal or acceptance
is made otherwise than in words, the promise is said to be
implied.
- In other words, the law is accepting an offer to be made
in an implied manner.
- This principle was also being stressed in the case of
Preston Corpn Sdn Bhd v. Edward Leong [1982] 2
MLJ 22, where the Federal Court noted that the terms of I promise to
an offer, either express of implied, must indicate that it pay for my
hamburger
will be legally binding as soon as the offeree accepts it.
 3. An offer must be clear in meaning
- S30 of the Contracts Act 1950 - Agreements, the meaning of which is not certain, or capable of
being made certain, are void. 含义不确定或不能确定的协议是无效的。  
- This principle can be seen in Ahmed Meah & Anor v Nacodah Merican (1890) 4Ky 583.

Keep your
There was an agreement entered into between two parties where the defendant
words. had promised, as a compensation of marriage of the plaintiff and the defendant’s
daughter, the defendant will be building him and his wife ‘a house that is
suitable’. The plaintiff sought for specific performance against the defendant.
Marry my daughter The court held that the words in this agreement is too vague to be enforced. In
and I will build you
a house that is order to form a valid contract, the word used to be the subject of the contract
Plaintif suitable.
must be clear and certain. It is hard for a house to be built if the value of the
Defendant
f house is not provided and the court is difficult to enforce it. The word suitable
used in the contract is vague as to whom it is suitable for. 对于谁合适是模糊
的 Therefore, the contract is void due to uncertainty and the order of specific
performance is failed to be sought and no damage can be claimed.
 4. An offer must be Valid in Law
- The subject matter of the offer must not be something that is illegal. If the subject matter was something illegal, it is considered as
a ‘non-existent offer’ 不存在 that is not able to be accepted by anyone.

- Affin Credit (Malaysia) Sdn Bhd v Yap Yuen Fui [1984] 1 MLJ 169, FC.

Facts: Judgement:
- The appellant of the case had let a motor-car to the respondent - The court held that the condition set out by the act must
under a hire-purchase agreement. Upon the failure of the be fulfilled in the first place, in order for a hire-
respondent to pay the instalment, the appellant brought an action
purchase agreement to be valid. In the present case,
for the balance owed by the respondent under the hire-purchase
agreement. since the appellant had failed to comply with such
- However, under S4(1) of the Hire Purchase Act 1967, the condition, there is no agreement entered into by both of
appellant was obliged to enter into an agreement with the them as the agreement is already void in the first place,
respondent to specify the latter’s financial obligation under the with the offer being invalid in law.
hire-purchase agreement, which they did not do so. 但是，根据
1967 年《分期付款购货法》 S4(1) ，上诉人有义务与答辩人签订协议，明确
答辩人在分期付款购货协议下的财务义务，但答辩人并没有这样做。  
- The respondent therefore contended that the failure of the
appellant to comply with the statutory provision would render
the hire-purchase agreement to be void ab initio. 答辩人因此辩称，
上诉人如不遵守法例规定，则分期付款购买合约自始无效。  
 Invitation to Treat Display of
Goods

- An invitation to treat should not be treated as an offer.

- A person who makes an invitation to treat will not be

bound to perform his contractual obligation when the
other party ‘accepts’ it.
Advertise Invitatio Tender
ment
n to
- Therefore, a person who makes an invitation to treat
must not have been intended to be legally binding Treat
with any other parties at law. He is merely said to be
inviting the other party to make an offer. 发出请客邀
请的人， 在法律上不得有意对任何其他当事人具
有法律约束力。 据说他只是在邀请对方提出一个 Applicatio
提议。 n for Club
Auction
Membersh
ip
Invitation to Treat Offer
 Advertisement
- Is an advertisement an Invitation to
Treat or an Offer?
- This question has no definite answer. Whether Advertisement is
an ITT or an Offer?
It will be highly depending on the
intention of the party who makes the
advertisement.
- In most cases, an advertisement will
Carbolic Smoke Ball
be treated as an invitation to treat. Typical Advertisement
kind of Advertisement
However, this principle is not applied
in all cases. If the advertisement is
falling within the exceptional scenario
as in the case of Carlill v Carbolic ITT Offer
Smoke Ball Co. [1892] 2 QB 484, it
will be treated as an offer.
 Advertisement (Continued…)
- To ascertain whether an advertisement was an ITT or an Offer, we need to distinguish the nature of the contract. (Whether
it is Unilateral Contract or Bilateral Contract) 为了确定一个广告是 ITT 还是要约，我们需要区分合同的性质。

Whether Advertisement is
an ITT or an Offer?

Carbolic Smoke Ball

Typical Advertisement
kind of Advertisement
(Bilateral Contract)
(Unilateral Contract)

ITT Offer
 Unilateral Contract (Advertisement)
- The features of an advertisement for Unilateral Contract has been shown in the case of Carlill v
Carbolic Smoke Ball Co. [1892] 2 QB 484.
- In this case, the nature of the contract itself was a unilateral contract. After the appellant had met the
requirements under the advertisement, the only outstanding obligation is on the respondent to pay.
Whoever capable to fulfill the requirements provided in the offer will be said to have accepted it, and a
contract is thereby being concluded.
- S8 of the Contracts Act 1950 - Performance of the conditions of a proposal, or the acceptance
of any consideration for a reciprocal promise which may be offered with a proposal, is an
acceptance of the proposal. 履行一项提案的条件，或接受一项提案可能提供的互惠承诺的
任何对价，都是对该提案的接受。
- This provision shows that Malaysia is accepting the concept of unilateral contract and the acceptance by
conduct, by performing a specific condition in the offer.
- With that said, an advertisement that possesses the nature of a unilateral contract can be treated as an
offer.
Eckhardt Marine GMBH v Sheriff, High Court
of Malaya, Seremban & Ors [1974] 2 MLJ 114,

■ https://www.lawteacher.net/free-law-essays/contract-law/an-offer-under-malaysian-cont
ract-act-1950-contract-law-essay.php
 Bilateral Contract
M (Advertisement)

- Bilateral Contract includes ordinary commercial contract, by which the advertisement promoting such kind of contract can
only be treated as an ITT.
- In that sense, when the advertisement is made, the outstanding obligation was on both parties. 当广告制作时，双方都负有
未尽的义务 The person who saw the advertisement can only make an offer thereon, but not accepting it.
- The principle that an advertisement is generally an ITT can be seen in the case of Partridge v Crittenden [1968] 1 WLR
1204.
The appellant had inserted such advertisement in the magazine. However, there is no express
incorporation of the words ‘offer for sale’. One Mr. Thompson then answered to the advertisement and
enclosed a cheque to the appellant. Since the bird in the case was wild species under the Protection of
Birds 1954, the appellant was charged for unlawfully offering sale of the protected bird. The issue of
the case was whether the advertisement inserted by the appellant is an offer or a mere invitation to
treat.

Magazine The court held that the advertisement was not an offer, but an invitation to treat. It could therefore
Bramblefinch
be concluded that, in a bilateral contract, where the obligation is still remained on both parties, the
Cocks, advertisement will be regarded as an invitation to treat. In contrast, in an unilateral contract, where the
Bramblefinch
Hens, 25c outstanding obligation is on one side only, an advertisement posted is not an invitation to treat but an
offer that is awaiting acceptance. 等待接受
Mr. Thompson
 What is the position of Malaysia? (Advertisement)

- Unless exceptional circumstances is present, Malaysia is generally treating an advertisement as being an Invitation to Treat only.
- The application of this principle in Malaysia can be seen in the case of Coelho v. The Public Services Commission [1964] 1 MLJ
12b.

The appellant applied for a Governmental Position that he saw in the advertisement in the Malay Mail newspaper. Subsequently, he was
informed that he had been accepted. After the appointment, the respondent had terminated him with the payment of one month’s salary in
lieu of notice. Dissatisfied, he applied for a certiorari to quash the respondent’s decision. 在获委任后，答辩人终止聘用他，并支付一个月的
代 通 知 金 。   他 不 满 意 ， 申 请 调 卷 令 撤 销 被 告 的 决 定 。 The court in dealing with whether the advertisement was an ITT, held that the
advertisement was a recruitment of a qualified person to the position. 这 则 广 告 是 为 该 职 位 招 聘 一 位 合 格 人 员   Therefore, the
application for the job was an offer and the information conveyed by the respondent was an unqualified acceptance. With that said, a
因此，这份
contract has been formed at that point of time and the termination of the respondent was considered as an error in law.
工作的申请是一份 offer ，被申请人传达的信息是不合格的录用。  尽管如此，合同在当时已经
形成，被申请人的终止被认为是一种法律错误。  
 What is the position of Malaysia? (Continued…)
- The position of Malaysia can also be seen in the case of MN Guha Majumder v RE Donough
[1974] 2 MLJ 114.

The defendant posted his house for sale in the Sarawak Tribune. The
plaintiff, interested to the property, inspected the house twice and had
called the agent of the defendant for several times. The plaintiff
claimed that the defendant had accepted the offer to purchase the
house. However, this claim was denied by the defendant.

In this case, the court did not solve the issue of advertisement on
invitation to treat. Nevertheless, court held that based on the evidence
House for Sale
tendered 根 据 所 提 供 的 证 据 , the parties had no clear
intention at that particular time to enter into a legally binding
relationship. Therefore, there is no contract in existence.
 Display of Goods
- Generally, display of goods is Considered as an Invitation to Treat.
- The principle can be seen in the case of Pharmaceutical Society of Great Britain v Boots
[1953] 1QB401, CA.
The defendant carried a drug retail business. The premise for retail comprised of a
single room that has employed self-service system for their customer. 零售的前提
是一个单一的房间，为他们的客户采用自助服务系统。 In the room, they
have displayed poisonous substances that required supervision of registered
pharmacist under the relevant law. Upon entering into the shop, customers will be
given a wire basket and are required to put the selected items that they wish to buy
into the basket and take them to the cashier desk at the exit. The cashier will then
state the total price and receive payment. When the plaintiff brought an action
against the defendant for alleged violation of the relevant law, the court held that
the display of goods on the shelves does not constitute an offer but merely an
Invitation to Treat.
 Display of Goods (Continued…)
- The principle that display of goods is merely an ITT has been strengthened by the case of Fisher
v. Bell [1961] 1QB 394.

The respondent in this case had displayed a flick knife which is

prohibited under S1(1) of the Restriction of Offensive Weapons
Act 1959. In the appeal brought by the Chief Inspector, the court
held that the act of displaying a knife in a shop window does not
constitute an offer for sale. 在总督察提出的上诉中，法院
裁定在商店橱窗展示刀具的行为不构成要约出
售。 Despite there was a price ticket attached, display of goods
on the window is merely an invitation to treat. Therefore, the
defendant has not committed any offence by displaying the knife
in the shop window.
 Tenders

- Based on the nature of tenders 投标 , an invitation to tender cannot be regarded as an offer, but
merely an invitation to treat.
- However, this general principle may not be applicable, if the invitation is accompanied by the
words “the highest tender will be accepted”.
 Tender (Continued…)
- The general principle that an invitation to tender will not be considered as an offer has been laid
down in the case of Spencer & Ors v Han & Ors (1869-4870) LR 5 CP 561.
Facts:
- The defendant issued a circular 传单、通知 to the plaintiff and other persons in the wholesale trade. In the
circular, it had stated that they were instructed to offer a sale to the wholesale trade by tender, 他们被要求出
CIRCULAR 售批发贸易的投标报价 of the stock of a company named Messrs G. Filbeck & Co. The stock is also told to
We w
er
to off e instruct
be sold in a discount of one lot and the payment of the tender is to be made in cash.
er for ed
stock sa
by ten le the
- Then, the plaintiff sent in a tender and his tender was the highest tender. However, the tender was not
the st der, a
oc
disco ks will be d
n accepted. The plaintiff later insisted that the circular is considered as a promise to sell to the highest bidder.
un ted
lot. in o n
e
- The defendant’s lawyer argued that if this case was to be compared with tenders for building, in any event, if
there is only one tender, would the advertiser bound to accept it? (Reasonably, no) 如果将本案与建筑
投标比较，无论如何，如果只有一份投标书，广告商是否一定会接受 ? ( 不合理 )
Judgement:
- The court held that the circular was not  an offer but was merely an attempt to ascertain of whether an offer could be obtained at the discounted price. Moreover, the
words that state that the highest bidder will be the purchaser is absent in this case.
- Willes J. highlighted that if the defendant had expressly incorporated the words: "we undertake 答应 to sell to the highest bidder," then, the circular would
amount to an offer. In relation to the defendant lawyer’s reliance on the fact that building contract would not usually be given to the lowest bidder, the court once
again relied on the fact that the defendant had not mentioned that the highest bidder will be accepted. Therefore he is under no obligation to accept the plaintiff’s
tender. 至于被告律师所相信的建筑合约通常不会给予出价最低的投标者，法院则再次倚赖被告并没有提及会接纳出价最高的投标者。 因此，他没有义
务接受原告的标书。  
 Tender (Continued…)
- The general principle may not be applicable, if the fact is falling within the exceptional situation. In that circumstances, the
invitation to tender will be considered as an offer.
- It has been laid down in the case of Blackpool and Fylde Aero Club v Blackpool BC [1990] 3 All ER 25, CA.
- The defendant has the concessions to operate flights in an airport that he owns. 有权在其所拥有的机
场经营航班。
- He sent an invitation to tender to the plaintiff and 6 other parties. The invitation to tender stated that in

Offer for Tender order for the tender to be considered, it shall be sent in an envelope provided and before the deadline
stated. 他向原告和其他六方发出了投标邀请书。 投标邀请书中说，为了使投标得到考虑，投标书应在规定的
截止日期之前用提供的信封寄出。

RIGHT TO USE PRIVATE - The plaintiff followed the instructions and sent it in time in the post box. Unfortunately, the post box
was not cleared 邮筒没有被清理 and the tender had then marked as late when it reaches the
AIRPORT defendant and it was regarded as an invalid tender.
*You need to comply with all requirements for your tender to be
considered - The plaintiff later brought an action against the defendant for alleged breach of contract as the
plaintiff had complied with all the requirements, but the offer was not considered.

The issue of this case was whether there is a valid contract between both of the parties. The Court of Appeal held that in the case, the invitation to
tender had rendered the binding obligation of the defendant to consider tenders that had conformed to the conditions of the tender. Therefore, the
tender issued by the plaintiff should be considered as it conformed with the requirements that are set.
* The court did not hold that the tender was to be accepted, but merely stated that the defendant was obliged to take such tender into consideration.
(when an invitation to treat was issued, the person is obliged to ‘accept offer’) Therefore, in the process of consideration, if the invitation itself has
not mentioned that the highest bidder will be accepted, the principle of Spencer case was still needed to be observed. This exceptional
circumstances will be applicable only when the person who issues the invitation to tender refuses to consider the offer.
Highest bidder would be accepted

■ Cheah Theam Kheng v City Centre Sdn Bhd (in liquidation)

and other appeals [2012] 1 MLJ 761
https://advance.lexis.com/document/teaserdocument/?pdmfid=1522468&crid=89a1f369-
6158-424a-aa4a-ca97d0b0e959&pddocfullpath=%2Fshared%2Fdocument%2Fcases-my
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6e0435d3fe51
 Legal
Principle for
Auction

Advertisement
Auctioneer’s Notice on date
for auction
request for bids of auction
without reserve

Invitation to Invitation to
Offer
Treat Treat
 1. Auctioneer’s Request for bids 拍卖人招标书
- Similar to an invitation to tender, the auctioneer’s request for bids is considered as an ITT. When the bidder bids for the
item, it is an offer and the vender is free to accept or reject. 当投标人对该物品进行投标时，这是一个报价，卖方可
以自由接受或拒绝。  
- This has been explained in the case of Payne v Cave (1789) 3 Term Rep 148.
- The plaintiff wanted to sell his worm-tub 虫卵桶 . So, he hired an agent to sell it in an
public auction.
- According to the custom of auction, if the money was not paid by the highest bidder
after he has successfully bid the item, such item will be put up again and be resold.
- The defendant had successfully bid the worm-tub for 40 pounds. When the auctioneer
was not able to give him an assurance as to the weight of the worm-tub, he withdrawn
his offer. 当拍卖人不能给他一个关于蚯蚓桶的重量的保证时，他撤回了他的出价
- The worm-tub was then put up for sale on the next day. Again, the defendant had
successfully bid it. But this time, he got it with 30 pounds. Unsatisfied, the plaintiff
sought to the court for the 10 pounds difference.

The court held that the auctioneer acts as the agent of the vendor and it is necessary to have the assent of both parties in order to
make a binding contract. It was signified that the act of knocking down the hammer by the seller is not done as the defendant had
withdrawn his offer before that. So, the withdrawal of the defendant was not considered as improper. Every bidding was not able
to form a valid contract until both parties as assented to it.
 1. Auctioneer’s Request for bids (Continued)

- The principle that a contract is only formed in an auction when the hammer is knocked is also being recognised in Malaysia as it
has been shown in the case of M & J Frozen Food Sdn Bhd & Anor v Siland Sdn Bhd & Anor [1994] 1 MLJ 294, SC.

- The first appellant in this case had purchased a property in a public auction. After paying 25% down payment, he had
defaulted the remaining sum. 拖欠了剩余的款项
- In the dispute arose on the exercise of right of the property, the court held that the sale of property has concluded when the
bid was accepted by the seller, which is at the fall of the hammer. At this point, the goods will not be able to be offered for
sale anymore, and the successful bidder would not be allowed to withdraw himself from the contract. Although no actual
execution of the sale has been done at that point of time, the parties are bound to perform their contractual obligation.
 2. Notice of Auction
- Notice of auction is considered as an invitation to treat only. 拍卖通知
- This principle has been shown in the case of Harris v Nickerson (1873) LR 8 QB 286.

- The defendant was an auctioneer and he had advertised in the newspaper that he
will be holding an auction to sell certain goods at a specific place on a certain day
and the following two days.
- The advertisement stated that a furniture was to be sold on the third day and the
plaintiff attended to the sale. However, the furniture had been withdrawn from the
sale, and the plaintiff, brought a lawsuit against the defendant to recover the time
and loss suffered by him on ground that the advertisement amounted to an offer
and the goods that had been advertised should be put up for sale on the day.

- The court held in favour of the defendant 法庭判被告胜诉 and stated that an advertisement regarding a goods will be
sold on a certain day in an auction does not constitute a promise to potential bidder that the goods will be put up for sale on
that particular date prescribed. It is expensive and inconvenient for an auctioneer to give a notice of withdrawal. Therefore,
the plaintiff was not able to claim for the loss of time and expense for attending the auction.
 2. Notice of Auction
■ Harris v Nickerson
https://www.lawteacher.net/cases/harris-v-nickerson.php
 3. Auction Without Reserve
- ‘No Reserve Auction’ or ‘Auction Without Reserve’ or ‘Absolute Auction’ is a kind of auction where
the seller will sell the goods regardless of price. 不管价格高低
- (FYI, Reserved Auction is another type of auction where the seller will have an undisclosed minimum
sale price set by him. So, if the highest bid did not fulfil his requirement, he will not sell.) 卖家将有
一个秘密的最低售价由他设定。 因此，如果最高出价不能满足他的要求，他就不会出售。  
- In this circumstances, auction without reserve will allow the bidder to buy at any price, without
needing the seller to give assent to it.
- So, the general principle for the advertisement of Auction Without Reserve is that it constitutes an
offer.
 3. Auction Without Reserve (Continued…)
- This principle was laid down in the case of Warlow v Harrison (1859) 1 E & E 309.

- The defendant had a partnership in auction business. They advertised a sale by means of
auction for a list of goods and had included the words of ‘without reverse’.
- The plaintiff then made a bid of 60 guineas for one of the horses. One Mr Henderson, the
owner of the horse made a bid of 61 guineas. The act was clearly intended to raise the price
or to prevent the plaintiff to purchase at this price as the owner had bought it for 130
guineas. The defendant then entered the name of Mr Henderson as the highest bidder and
refused to receive the money of the plaintiff. He alleged that he had knocked it down in the
highest bidder and no one shall interfere in this matter. The plaintiff then brought an action
against the defendant.
- The court held that the plaintiff shall entitle the horse at his bid as the sale should not be reserve as stated in the advertisement
in which the goods shall be sold to any parties regardless of the price. In contrast to auction without reserve, a reverse auction,
may enable the seller to not sell the item if the highest bidder did not bid high enough to satisfy the seller. In this case, the
auction without reverse shall be regarded as an offer and upon accepted by the plaintiff, there is a valid binding contract. The
court also ruled that the vendor cannot bid in an auction without reverse and the property shall be sold to the highest bona fide
bidder notwithstanding the price. 该财产应出售给最高的善意出价尽管价格。  
 Application of Club Membership
- In an event of applying for a club membership, the action was regarded as a preliminary step.
- In other words, it is an invitation to treat.
- It was illustrated in the case of Abdul Rashid v Island Golf Properties Sdn Bhd [1989] 3 MLJ 376.
- The plaintiff applied to be a member of the defendant’s golf club. At the time when he
made his application, he had executed a declaration by which he had agreed to allow the
defendant to impose additional charges. 在他提出申请时，他已执行一项声明，同意被告施加
额外控罪
- A dispute arose as to whether the plaintiff was bound to the declaration.
- The plaintiff contended that the declaration was executed alongside the application, which
is a preliminary communication before the contract was entered into. 原告辩称，声明是与
申请书一起执行的，申请书是签订合同前的初步沟通。  
- The court in dealing with the issue of whether the application for a club membership was an offer or the offer is only
issued by the club after the club had considered the application, held that that the application made by the plaintiff was
a preliminary step. The court, although used ‘preliminary step’ instead of ‘invitation to treat’, was intended to mean
the same.
- The offer will only be issued when the defendant had considered the application of the plaintiff. A contract is only
formed after the plaintiff had accepted the offer by making payment for the entrance fee.
 How about Items on Internet Website?
- The Electronic Commerce Act 2006 was introduced on 31 august to facilitate the legal issues arising in
the electronic transaction.
- S5 of such act states that an electronic message is an information generated, sent, received or stored by
an electronic means.
- S7(1) of such act provides that the communication of the electronic offer, acceptance, revocation of
either offer or acceptance or any communication of the contract shall be expressed by electronic means.
- S7(2) of such act also provides that the contract made by electronic means shall not be denied its legal
effect, validity or enforceability on the ground that it is communicated in an electronic means. 不得以以
电子方式订立的合约是以电子方式传送
- The rules applied on the advertisement on the internet shall be dealt with in the manner of shop display.
Since there is no relevant case law to be taken as reference in Malaysia, the actual legal position of an
electronic contract is based on that of the United Kingdom.
- However, the issue of whether an advertisement on the internet is an invitation to treat or an offer is yet
to be solved.
 Communication of Offer
OFFER
To a Specific person - After preparing a valid offer, is everything done on your part? and you can
Expressly made
Clear Meaning expect to receive acceptance already?
Valid at Law
- No. You must communicate it to the potential acceptor first.

Communicatio
n of Offer

How & What When

constitutes Communication
communication? is completed?

S3 S4
 Communication of Offer (Continued…)

- S3 of Contracts Act 1950 – The communication of proposals, the acceptance of proposals, and
the revocation of proposals and acceptances, respectively, are deemed to be made by any act or
omission of the party proposing, accepting, or revoking, by which he intends to communicate the
proposal, acceptance, or revocation, or which has the effect of communicating it.

Done by the act or It has the actual

It has the intention
omission by the effect of
to communicate it.
proposer. communicating it.
 Communication of Offer (Continued…)
- S4(1) of Contracts Act 1950 – The communication of a proposal is complete when it comes to
the knowledge of the person to whom it is made(offeree).
- Illustration (a) under S4 of Contracts Act 1950 - A proposes, by letter, to sell a house to B at a
certain price. The communication of the proposal is complete when B receives the letter.

Proposal

Completed
 Communication of Offer (Continued…)
- If there are two cross offers or counter offer, it is not a valid offer and the offer shall be
automatically revoked.

You wanna buy?

- In the case of Tinn v Hoffman & Co, (1873) 29 LT
271, HL, the plaintiff and the defendant had, at the
same time, issued to each other on offer respectively.
One offered the goods for sale, and the other one
offered to buy the goods.
- The House of Lord held that the cross offers would
not render a legally binding contract as both of the
offers are not able to be considered as acceptance.

You wanna sell?

 Revocation of Offer
- It is common for an offeror who has communicated his offer to change his mind and wishes to
withdraw his offer.
- Can he do so? If yes, in what circumstances can he do so?
- Contracts Act 1950 has provided the answer.

Contracts Act
1950

When the Modes of

When an offer
revocation is revocation of
may be revoked?
completed? offer
 Revocation of Offer Deal!

Offer

Mr. A
Can I now revoke the offer
given to Mr. B?
In what circumstances can my
revocation be said to have been
2010 successfully done?

BMW
Offer

Mr. B
When an offer
may be revoked?
Proposal

Revocation

B
Me Acceptance
Revocation can be
made before this.
 S5 of the Contracts Act 1950
A proposal may be revoked at any time before the communication of its
acceptance is complete as against the proposer, but not afterwards.
When an offer
may be revoked? S4(2)(a) of the Contracts Act 1950
The communication of an acceptance is complete, as against the
proposer, when it is put in a course of transmission to him, so
as to be out of the power of the acceptor.

Proposal

Revocation
Illustration under S5 of Contracts
Act 1950.
A may revoke his proposal at any
time before or at the moment when B
posts his letter of acceptance, but not
afterwards.
B
Me Acceptance
Revocation can be
made before this.
 When the revocation
of offer is completed?
Proposal

Revocation

B
Me
Acceptance
If the revocation managed to reach Mr. B before he
makes his acceptance, then this revocation is said to
have completed. (successfully drawn back my offer,
and Mr. B cannot accept the offer anymore)
 For me, my revocation is
complete when I pass it to
the post office. When the revocation
of offer is completed?
S4(3)(a) of the Contracts Act 1950
The communication of a revocation is complete, as
against the person who makes it, when it is put into a
Propose
course of transmission to the person to whom it is made, r
so as to be out of the power of the person who makes it
Therefore, if I accepted it
before I know that it was
revoked, the contract is still
considered valid.

For me, I cannot accept the

offer when I know it has
been revoked.

S4(3)(b) of the Contracts Act 1950

The communication of a revocation is complete, as against the
person to whom it is made, when it comes to his knowledge. Accepto
r
 OFFER
Offer to sell
my BMW.
This offer is
valid until 26
When the revocation
Aug.
of offer is completed?
18 Proposal 21
AUG AUG

Revocation
22 25
AUG AUG
At the mean time…

22 Deal!
AUG
B
Me
Acceptance
26
AUG
The principle for revocation of offer has been provided in the
case of Byrne & Co v Leon Van Tienhoven & Co. [1874- When the revocation
1880] All ER 1432. of offer is completed?
Proposal (Usually (Continued…)
1 takes 10-11 days) 11
OCT OCT

8 20
OCT Revocation OCT

Defendant Acceptance (Before Plaintiff

he knew about the
revocation)
11
OCT
 Byrne & Co v Leon Van Tienhoven & Co. [1874-1880] All
ER 1432. (Continued…) When the revocation
Facts: of offer is completed?
- The defendant of such case posted a letter in Cardiff UK on October 1, to the plaintiff, who is at
the New York. The letter contained an offer to sell 1000 boxes of tinplates. The letter usually (Continued…)
takes 10 to 11 days to reach each of them. On October 8, the defendant then posted a letter to the
plaintiff to revoke his offer. On October 11, the plaintiff telegraphed the acceptance to confirm.
The plaintiff further posted a letter to double confirm his acceptance on 15 of October. On 20
October, the revocation had reached the plaintiff.
Judgement:
- The court held that the revocation had no effect until October 20, when the plaintiff received it. Therefore, the plaintiff is able to
the offer in the interim of such date 该日期的中间 , which the plaintiff did so. It was understood in the cases of Harris's C
(1872) 26 LT 78L Ch App 587 and Dunlop v. Higgins (1848) 1 HL Cas 381 that in any event, if the acceptance is made by lette
contract is said to be complete when the letter of accepting the offer is posted, regardless of whether it eventually reaches the des
or otherwise. (Postal Rule)
- This reason of having the ‘postal rule’ is because the offeror must have expressly or impliedly assented to treat the acceptance to
a letter posted by the acceptor as a sufficient acceptance and notification to himself. In other words, the offeror must have intende
treat the post office as his agent. (Post office got the acceptance = Offeror got the acceptance)
- However, in the court’s opinion, the ‘postal rule’ is not applicable to the revocation of an offer.
- In this case, there is no evidence, legal principle, and decision to support the allegation that the revocation is communicated to the
plaintiff and shall have effect on 8th of October or any day before 20th , when the letter reached them.
- Since the plaintiff had accepted the offer before they received the revocation, a legally binding contract is formed on 11 October,
the plaintiff sent his acceptance.
 (a) By
Modes of communicating the
notice of revocation
Revoking by the proposer to
the other party
Offer (b) by the lapse of the time
prescribed in the proposal for its
acceptance, or, if no time is so
S6 of the Contracts prescribed, by the lapse of a
Act 1950 reasonable time, without
A proposal can be communication of the acceptance
revoked:

(c) by the failure of

the acceptor to fulfil
(d) by the death or mental a condition precedent
disorder of the proposer, if the to acceptance
fact of his death or mental
disorder comes to the knowledge
of the acceptor before acceptance
 a) Notice of
Revocation - Revocation by notice is one of the most common modes of revoking an offer.
- The abovementioned principle of ‘When an offer may be revoked’ and ‘When the
revocation is completed’ applies to this mode of revoking.

- In what circumstances that the offeror may revoke his offer has been explained in
the case of Offord v Davies & Anor, (1862) CBNS 748; 142 ER 1336.

Can you gimme a

discount on the
money I owe you? - The plaintiff and defendant had exchanged promise, but the defendant revoked
I promise to settle it
within 12 months.
his promise before the plaintiff had done his part.
- The court held that the promise made by the parties was not binding and had no
obligation on both parties, as the nature of the promise itself was conditioned to
Okay, deal. I be binding.
give you a
discount. Until the condition has been fulfilled, the defendant has the right to revoke it. 原告
Plaintif 和被告交换了承诺，但是被告在原告还没有完成他的义务之前就撤销了他的承诺。  
Defendant 法院认为，双方作出的承诺没有约束力，对双方没有义务，因为承诺本身的性质是有约束力的。  
f 在条件未满足之前，被告有权撤销。  
 S6(a) of the Contracts Act 1950 - A proposal is revoked, by the
communication of notice of revocation by the proposer to the other
a) Notice of party.
- In this sense, the revocation must be given by the proposer himself.
Revocation - However, in the Common Law position, revocation is also valid if the
(Continued…) notice or knowledge of such revocation has been communicated by a
third party.
- This principle has been shown in the case of Dickinson v Dodds
Proposal (Will (1876) 2 Ch D 463, CA.
expire on 12
June)
10
The defendant gave the plaintiff a written offer to sell a house
June for 800 dollars on Wednesday, June 10. In the offer, it was
stated that the offer will be left over until Friday, June 12, 9am.
11
June On Thursday, June 11, the defendant had sold the house to a
third party, Allan for 800 dollars. The plaintiff was told by a
third party that the property was sold to Allan on that evening.
Knowing that the house had been sold, the plaintiff then handed
a formal letter of acceptance to the defendant on June 12 before
Defendant Plaintiff 9am.
The Court of Appeal held that the revocation has been made as
Acceptance (Before 12 there was not in existence of the same mind between the parties
expiry of offer) June
to make a contract.
 S6(b) of the Contracts Act 1950 - A proposal is revoked, by the lapse of the time
prescribed in the proposal for its acceptance, or, if no time is so prescribed, by the
lapse of a reasonable time, without communication of the acceptance.
b) Lapse of
- If the offer has mentioned that the acceptance must be made before certain date, when
Time the prospective acceptor had not accepted it before the date, the offer is deemed to
have been revoked.
- If no time has been mentioned, then, the offer will be deemed revoked, after a
reasonable time has passed.
- But, what constitutes ‘Reasonable time’? We must go into the fact of each case.
- This principle was shown in the case of Macon Works & Trading Sdn Bhd v Phang
Hon Chin& Anor [1976] 2 MLJ 177.

- In an option to purchase a land, the time for it to lapse was not mentioned therein.
- The court held that the acceptance must be performed within a reasonable time and what constitutes reasonable time is a
question as to the fact of each case.
- Hence, the conduct of the parties after the offer was made must be taken into consideration when deciding whether the
offer is still operative after too long a time lapse.
- The court noted that the sole purpose of limiting the time for acceptance was to indicate to the prospective accepter that
the offer will lapse automatically if it was not accepted by him before the expiry of such time. Therefore, the failure of
him to accept will render it to be construed as if he had rejected the offer.
- In the present case, the court found that the option was revoked.
 b) Lapse of - An offer to take up shares in a company was held to be revoked by the lapse of
6 months, if the acceptance was not done within the period.
Time - This principle was laid down in the case of Ramsgate Victoria Co v
Montefiore (1866) LR 1 Ex 109.
(Continued…)
- In this case, the defendant applied for the share in the
company of plaintiff in June and a deposit was paid into
the bank of the company.
- He did not hear from the company until he was asked to
pay the balance due for the share in the company at the
end of November.
- When he refused to pay the balance, the plaintiff brought
the dispute before the Court.

- The court held that the offer to buy the plaintiff’s share was an offer where the subject matter could fluctuate
rapidly. Therefore, the offer would terminate after a short while and his refusal to take up the share of the
company was not wrong as the interval between June and November was more than enough for the plaintiff to
accept it.
 c) Failure of
S6(c) of the Contracts Act 1950 - A proposal is revoked, by the failure of the
Acceptor to Fulfil acceptor to fulfil a condition precedent to acceptance. 先决条件
Condition Precedent - As if the case of Carlill, in certain offer, it would contain some conditions to be
fulfilled before the acceptance can be made.
to Acceptance - Therefore, no fulfill = cannot accept.
In the case of Aberfoyle Plantations Ltd v Khaw Bian Cheng
[1960] MLJ 47, PC (Appeal from Malaysia), the vendor had failed
to comply with the condition precedent in the contract, which is to
obtain the renewal of leases that are relating to the land which was
said to be the subject matter of the contract. Due to the failure to
fulfil the condition, the purchaser was able to get back his deposit.

In the case of Am Financings Ltd v Stimson,51 [1962]1WLR1184,CA, the court

held that there was no concluded contract as there was a condition prescribed in the
offer by the defendant that the car shall be remained in substantially the same
condition until the time when the acceptance was made. Since the car received by
the plaintiff was a badly damaged car due too the event of the car being stolen, the
offer is said to have been revoked.
 General Principle for death and mental disorder of the Offeror:
d) By the Death S6(d) of the Contracts Act 1950 - A proposal is revoked, by the death or mental
or Mental disorder of the proposer, if the fact of his death or mental disorder comes to the
knowledge of the acceptor before acceptance.
Disorder of the - This reasoning manner was the same as the case of Dickinson v Dodds (1876) 2
Offeror Ch D 463, CA. The potential acceptor of a property was informed by a third party
that the seller had already sold the property to another person. The court held that
offer is revoked as the parties is said to not have the consensus of mind. 没达成
共识
- The rationale behind the automatic revocation of offer due to mental disorder is
because the Contracts Act 1950 requires the parties who enter into a contract to be
competent to the contract. Parties to a contract must, among others, reach the age
of majority, and of sound mind pursuant to S10, 11, and 12 of the Contracts Act
1950.
General Principle for death of one party of a Binding Contract:
S38(2) of the Contracts Act 1950 - Promises bind the representatives of the promisors in case of the death of the
promisors before performance, unless a contrary intention appears from the contract.
- It could be understood that the general principle for the death of a party of a contract is that it will not revoke the
contractual obligation due, and the contractual obligation will be binding to the representatives of the party, unless
contrary has been proved.