Understanding Acceptance in Contract
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Examine whether there is an enforceable contract between the parties in the following circumstances:
Tan advertised in The Star a 1999 Model Subaru car for sale. Sam sent the following telegram to Tan:
“INTERESTED IN BUYING SUBARU CAR. QUOTE LOWEST PRICE”
Tan replied: “The lowest price I can offer is RM 18,000/-.”
Sam replied, “I agree to buy for RM 18,000/-.”
Tan did not reply to Sam. After waiting for a few weeks Sam visits Tan with the money to buy the car. Tan refuses to sell.
Answer:The above situation refers to Contract Law and in Malaysia it is govern by the Contract Act (Ca) 1950. In any contract the basic elements would be an offer and acceptance whether by verbal or written can constituted is by virtue of Section 9 of Ca. By reference to Ca in a valid contract as stated in Section 2(c) Ca1950, an offeror (a person who offer) and offeree (a person who accepts). And in any contract there must be consideration, and not necessary in a form of money as reframe or to perform an action also is a consideration. However an offer must be distinguish from an invitation to treat(ITT) as this normally occurs in advertisments, as ITT is not a form of contract but a form of negotiation to enter into a contract or agreement. For example in the case of Partridge v. Crittenden , the advert in a magazine selling a special type of bird did not disclose in the article words of “offer for sale”, so the court held that the advertisement was an ITT and not an offer to sell, but it was not held in the same as Carlill v Carbolic Smoke Ball Co.
Whereby in this case the company had put an advert that say whomever contracted influenza after taking their medication will be rewarded 100 pounds from their 1000 pound deposited in a bank account, when the Plaintiff contracted the disease, she sued the company to get the reward, the defence counter argue that the advert was a ITT plus mere puff and was not intended to create any binding obligation, however it was rejected by the courts as the advert had made an offer can be made to the world. It becomes a contract when anybody comes forward and performs the conditions. In this case, there was an acceptance of the offer by the plaintiffs conduct.
By referring to the above case, Tan cannot enforce the contract against Sam, as the advertisement and conversation was still in the negotiation period and had yet to be entered into an agreement whereby the seller, and the advertisement was not an offer but merely an ITT, Sam has not agreed upon to accept the money offered by Tan, this can be similar to the case of Partridge v Crittenden. As to create a valid contract there must be communication whereby the offeror and offeree has agree upon terms, condition and consideration, whereby in this situation although there was words such as offer and accept in