Question A

Introduction
The main issue discussed in this case is whether Beatrice and Jackie have entered into
a contract in relation to the piano. Several issues have to be considered such as,
whether there is an offer made between Beatrice and Jackie, whether there is an
acceptance and whether Beatrice is allow to withdraw her offer. It is also essential to
understand postal rule in order to determine whether the act of Beatrice withdrawing
her offer to sell Jackie the piano is applicable.
RULE
It is extremely important to differentiate between an offer and invitation to treat.
Invitation to treat is when one party makes offer to the other party and then the party
is free to accept or reject the offer. As established in the case of Patridge v Crittenden,
Patridge (defendant) was charged with offering for sale a protected wild bird species
as the defendant placed an advertisement. However, he was not found guilty as
advertisement is merely an invitation to treat. [4.058] Advertisements of goods for
sale are generally interpreted as invitation to treat. [4.057] Otherwise, the seller of
goods would be liable for numerous contracts with the newspaper reader or
advertisement viewer.
In the case of Beatrice and Jackie, the act of Beatrice advertising her grand
piano for sale in local newspaper allows anyone to make her an offer to purchase her
grand piano for RM10, 000. The words advertisement and newspaper clearly
shows that Beatrice is not making any offer but rather inviting offers to purchase her
piano. Therefore, there is no legal bind to Beatrice and she has the right to call of the
deal at that time.
According to Malaysia Contracts Act 1950 Section 2(a), offer is defined as an
expression of willingness to contract made with intention. As soon as an offer
accepted by the offeree it is become binding on the offeror. [4.030] As mentioned in
Section 2(a), an offer not only has to be certain, it also has to be directed to the
knowledge of offeree. It is also crucial to determine the differentiate offer from an
option, negotiations and invitation to treat.

In the case that we are discussing, Jackie saw the advertisement on 12 August
and called Beatrice. Jackie offered to purchase the piano for RM 8,000. At this point,
Beatrice as the offeree has the right to accept or reject the offer made by Jackie
(offerror).
Counter offer is defined as an offer made in response to a past offer by the other party
during negotiations to vary the terms of the offer. By making a counter offer, it
naturally rejects the former offer and it requires an acceptance under the terms of
counter offer to form a final contract. However, the offeror is free to accept or reject.
As established in the case of Hyde v Wrench, Wrench (defendant) offered to sell his
estate to Hyde for 1000 pounds but Hyde declined the offer. Instead, Hyde counteroffered 950 pounds but Wrench refused to take 950 pounds. Two days later, Wrench
accepted the original offer of 1000 pounds. There is no binding contract between
Hyde and Wrench as Hyde had already rejected the original offer of 1000 pounds by
his counter offer of 950 pounds. [4.208] This clearly shows that the offeror is free to
accept or reject any counter offer made by the offeree, however, the counter offer will
replace the original offer.
Beatrice rejected Jackie offer to sell her piano for RM8,000 but instead,
Beatrice made a counter offer and agree to sell her grand piano to Jackie for
RM9,000. With the counter offer made by Beatrice, the original offer of RM10,000 is
replaced by the new offer of RM9,000. At this moment, Jackie has the right to accept
or reject the counter offer.
Courts recognize preliminary negotiations from formal lawful offers in that parties to
preliminary negotiations do not have a present intention to shape a contract. No
contract is formed when parties to preliminary negotiations react to one anothers
request. In the case of Harvey v Facey, Harvey (appellant) offered to purchase Faceys
store (Bumper Hall Pen) by sending Facey a telegram stating, Will you sell us
Bumper Hall Pen? Telegraph lowest cash price. The respondent replied that the
lowest price for Bumper Hall Pen is 900 pounds. The appellant then replied a
telegram agreeing to purchase it at the asking price. However, the defendant refused
to sell. According to Privy Council, there is merely supply of information, offer is not
made.

On 13 August, Jackie left Beatrice a message as Beatrice did not answer her
phone, seeking permission to collect the piano after a month of purchase, when she
moved in to her new apartment. As section 7 mentioned that the acceptance must be
absolute and unqualified in order to convert a proposal into a promise, the word
asking shows that Jackie is only acquiring information and does not amount to an
acceptance. Acceptance should be either yes or no. Therefore, there is not acceptance
at this stage yet.
The main rules as to acceptance are to be found in section 2,4,5,7 and 9 of the
Contracts Act 1950. Malaysian Contracts Act 1950, sectioned 2(b) mentioned that at
the point when the individual to whom the proposal is made means his assent thereto,
the proposal is said to be acknowledged: a proposal turns into a promised when it is
accepted. As mentioned in section 2(b) of Malaysia Contract Acts 1950, an offer is
only said to be accepted when the offeree signifies his assent. Therefore, it is
essential that an acceptance must be communicated to the offeror. However, postal
rule is an exception to the communication rule. Malaysian Contracts Act 1950 has
transposed postal rule acceptance from English legal system.[4.151] According to
Section 4(2)(b), when it comes to the knowledge of proposal, communication of
acceptance is complete against the acceptor. Postal rule is also known as acceptance
by post.
In the case of Adam v Lindsell, the defendant wrote the plaintiff an offer to sell
wool on certain terms. [4.152] However, the plaintiff sold the wool to a third party as
defendants letter was reached later than usual as the defendant misdirected the letter.
The plaintiff immediately posted acceptance upon receiving the offer letter. Court
held the acceptance was completed at the time the letter is posted. There was a valid
contract existed between Adam and Lindsell as soon as the letter is posted.
Morever, there it is illustrated in the case of Ignatius v Bell, where the plaintiff
sued the defendant for selling the land to another party. This is solely because the
letter was left in the post office and not sent to the defendant by the closing date
stated. However, the court held that the date of posting is considered the date
acceptance is communicated instead of the date of receiving.
On 16 August, Jackie decided that she could place the piano at her sisters
place and wrote a letter to Beatrice agreeing to purchase the piano for Rm9,000. With
this, postal rule is involved. Jackie agreed to purchase the piano unconditionally

showing that her acceptance is absolute and unqualified. According to the postal rule,
the acceptance is complete as soon as the letter of acceptance is posted. Therefore,
contract is existed between Beatrice and Jackie on the 16th of August.

Section 6(1)(a) of Contract Act stated that specific circumstances where the offer
comes to an end can be set out by lapse of time prescribed in the offer of its
acceptance. This implies that offer is terminated if communication of acceptance is
not complete before the stated date. Ramsgate Victoria Hotel Co Ltd v Montefiore
illustrates an example where an offer must be accepted within reasonable time. In this
case, Monteriore (defendant) made an offer to purchase Ramsgate Victoria Hotels
shares with a particular price in June. However, the offer had never been withdrawn
until November where the value of shares had fallen. Montefoire refused to pay the
balance because his offer had lapsed through expiry time. Court held that the delay
between offer and acceptance was unreasonably long. In short, offer must be accepted
within reasonable time.
In the case of Beatrice and Jackie, the lapse time is stated clearly that the offer
will be close on 19 August at 5.30pm. The lapse of time is reasonable and stated
clearly. However, Beatrice has the right to end the offer earlier with clear notice but
she did not inform Jackie before Jackie sent her letter of acceptance. Therefore,
Beatrice is not allowed to terminate her offer.
Section 5(1) of Malaysian Contract Act 1950 is being evaluated in order to justify
whether the revocation of offer is effective. According to this section, the acceptance
can be revoked at anytime before the communication of its acceptance is complete as
against the offeree. However, one may not be able to revoke the acceptance after the
communication of acceptance is complete. In the case of Routledge v Grant, Grant
(defendant) offered to purchase Routledges (plaintiff) house. The offer was open for
six weeks. However, Grant changed his mind and he withdrew his offer. After,
Routledge received Grants letter, he wrote back to Grant, accepting his offer. Both
were happened within the six weeks. Court suggested that Grant was not bound to
keep his offer open, and he is able to revoke his offer anytime before the acceptance
from Routledge is communicated.

On 17 August, Beatrice changed her mind regarding the sale of her piano and
she wrote Jackie an e-mail of withdrawal. However, Beatrice has no right to withdraw
her offer as Jackies letter of acceptance was posted on the 16 August.
The law enforces bargains to which both parties contribute, not gratuitous. Section
2(d) Contracts Act 1950 stated that at the desire of the promisor, the promise or any
other person has done or abstained from doing, or does or abstains from doing, or
promises to do or to abstain from doing, something, such act or abstinence or promise
is called consideration for the promise. In short, in order to make an enforceable
contract, the promisee must give something in return for the promise made by
promisor. Besides, Section 26 of Contracts Act also stated that the general rule of
agreement must have consideration, else is void.

Malaysian Contracts Act 1950, Section 7(b) stated that, in order to convert proposal
into a promise, acceptance must be expressed in some usual and reasonable manner,
unless the proposal prescribes the manner in which it is to be accepted. [4.116] The
fact that Jackie wrote Beatrice letter of acceptance is reasonable.
In the case of Lee Seng Heng v The Guardian Assurance Co Ltd, where the
court has decided that a reasonable mean of communication of acceptance must be
made between two parties (neighbors).
CONCLUSION
In conclusion, there is a contract between Beatrice and Jackie in relation to the piano.
Beatrices revocation of the offer is invalid as Jackie has posted her letter of
acceptance before Beatrice withdrawal mail. In fact, Jackie may sue Beatrice for her
RM1, 000 non-refundable economic loss.