Environment of Business Assignment

Introduction

This case is about Johnny who wants sell his antique car and knows that his friend, Karen will be interested in buying it. On 1 January, Johnny writes and posts a letter to Karen who is currently on holiday in Singapore. In his letter he said he will sell his car worth RM10.000 and if Karen interested, Johnny wants to know on 10 January because he is going to sell it at an auction on that day if Karen not interested to buy the car. Karen receives Johnny letter on 3 January and reply his letter on 4 January that said she is interested to buy the car if she could pay for the car in two installments.

Johnny received Karen’s letter on 6 January but on 4 January Johnny posts a second letter to Karen and he said his offer to sell his antique car for RM10.000 is withdrawn. He will sell it at auction on 10 January. In the meantime, Karen has second thoughts about the car and realizes that it was a good bargain at RM 10,000 and she accordingly write a second letter to Johnny and posts it on 7 January. She ask Johnny to ignore her earlier letter and she will buy the car for RM10.000 in one payment and she will contact Johnny when she return to make arrangements pick up and pay the car. Johnny received Karen last letter on 10 January but only after he sold the car at an auction for RM8.500. Johnny sends a letter on 10 January to Karen and said the car already sold at the auction sale.

Offer

Definition of Offer

The term offer is also referred to as proposal. It is defined under Section 2(a) CA 1950 as:

“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 person to the act or abstinence, he is said to make a proposal.”

It defines that an offer can only exist when an offeror or/ promisor, by his act or words, stated his willingness to be bound by the contract as soon as the other person to whom he made the proposal accepts it.

Definition of Invitation to Treat

It...