Whether There Is Supposed to Be a Contract? Whether the Revocation of Acceptance Is Absolute to Refrain the Contract from Being Complete?

Question 1

Issue

           Whether there is supposed to be a contract? Whether the revocation of acceptance is absolute to refrain the contract from being complete?

Law

          Yes, there is supposed to be a contract before the revocation of the acceptance because it consist of valid procedure to make a contract. Based on Section 2(a) of the Contracts Act 1950 defines an offer or proposal is where a person assent to do or to abstain from doing something is signifies to the other’s. 1950 [F.M. Ordinance No. 14 of 1950]. Section 4(1) of the Contracts Act 1950 provides that the proposal is complete communicated when it comes to the knowledge of the offeree. There must be a certain subject matter consist in the communication. [Mei Phang, L. & Detta, I. 2009]

           Besides that, Section 2(b) of the Contracts Act 1950 defines an acceptance is when the assent is signified by the offeree toward the offer, the offer now is seem to be accepted [O’sullivan and Hilliard, 2006]. Section 4(2) of the Contracts Act 1950 held that acceptance is complete communicated as against the offeror when it put in a course of transmission to the proposer. Acceptance takes effect once it is posted shows in the case of Household Fire Insurance v Grant [1878-79] LR4 Ex D 216, Grant.

         Acceptance must be made within a reasonable time. Section 6(b) of the Contracts Act 1950 held that lapse of time prescribed in proposal for its acceptance or lapse of reasonable time if time is not prescribed in the offer, it will revoke a proposal. In contrast, this infer that acceptance must be carried out within a reasonable time [Kenan et al, 2008]

          Acceptance must express in prescribe manner. Section 7(b) of the Contracts Act 1950 held that some usual or reasonable manner must be expressed in order to convert an offer into a promise, unless the manner which it is to be accepted has prescribed by the proposal.

        All above clearly show that agreement is existed between both parties. However, Section 5(2) of the Contracts Act 1950 state that before the communication of the acceptance to the offeror is complete, the acceptance may revoke at any time [P.C Tulisian, 1996]

        Communication is vital in offer, acceptance and even revocation which defines in section 4 of the contracts act. Section 4(3) of the Contracts Act 1950 provides that the revocation of acceptance is complete communicated as against the promise when it is put into a course of transmission to the promisor and as against the promisor when it comes to his knowledge [Mei Phang, L. & Detta, I. 2009]

Application

         Joey offer to sell his car for RM80,000  through a letter shows that she is making an bilateral offer  by signifies her willingness. Does it comes to the knowledge of offeree? In the case, it implies the letter is completely received by Michael between 7th-15th November. The subject matter is certain? Michael offer to sell ‘his’ car for RM80, 000. The price is certain, however the subject matter have to depend on the content of the letter.

        On 15th November Michael accepting Joey’s offer by wrote and posted a letter. The offer is seem to be accepted. Michael has wrote and posted a letter to admit his acceptance. Once the letter posted mean   it has put in a course of transmission to form a complete communication. Even though the subject matter of the offer is uncertain, however the acceptance from Michael indicate that he has satisfied with the condition of the offer, subject matter no longer uncertain anymore.

          Since offer is made on 7th November and Michael is intended to accept on 15th, the time is not lapse by a reasonable time. Unless Joey prescribed the time for the acceptance of it offer, depend on the content of the offer letter.

           Joey made her offer through a letter, thereby there will be feasible for Michael to communicate his acceptance through a letter (usual and reasonable manner). Unless Joey prescribe manner of acceptance ‘must’ in others method, depend on the content of offer letter.

             The contract is valid before 17th November. On 17th Michael revoked his acceptance through telephone. The revocation of acceptance is before the communication of the acceptance is complete. In the case, the communication of a suppose acceptance is completed on 18th November where Michael’s letter reached to Joey.

             The acceptance letter is in a letter which is out of the power of Michael to hold back the letter.  However, Michael wisely use the other’s instantaneous method of communication ‘telephone’ to response on it revocation. The communication of revocation of acceptance come to the knowledge of Joey before the communication of acceptance is completed.

Conclusion

 A suppose valid contract turn down by a complete revocation of acceptance, eventually there is no contract between Joey and Michael

Question 2

Issue

            Whether an original offer will destroyed by counter offer or does the original offer remain open after a counter offer has made by offeree?

           What is counter offer? Counter offer is an implied rejection of the original offer made by an offeree to proposer. It relating to the same matter as the original offer while the dealing conditions are differing from that proposed by the original offer.

Law

          The source to form a contract is usually begin with an offer.  Section 2(b) of the Contracts Act 1950 defines an acceptance is when the assent is signified by the offeree toward the offer, the offer now is seem to be accepted [O’sullivan and Hilliard, 2006]. The proposal is essential to be communicated to the offeree. Section 4(1) of the Contracts Act 1950 provides that the proposal is complete communicated when it comes to the knowledge of the offeree. There must be a certain subject matter consist in the communication. [Mei Phang, L. & Detta, I. 2009]