Difference Between Offer and Proposal (Malaysia Legal System)

1.0 | Introduction

Today, law practitioner’s and setter’s are always arguing on the validity of the law being applied, e.g. Contract Act 1950. This is because people’s mindset today is to challenge anything they can, and in this case, paraphrasing each and every word to its limit to detect flaws in our system. The main idea of having “laws” is to govern behaviour and serves as a social mediator of relations between them, hence, in most cases relating two parties and a contract.

The difference or similarity between an offer and a proposal has become one of the highlights of these arguments. BusinessDictionary.com in year 2012 defined offer as a conditional promise submitted by an offerer in the state of voluntarily to the offeree for acceptance. When accepted by the offeree, it becomes legally enforceable. On the other hand, proposal is defined in Section 2(a) of the Contract Act 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 to the act of abstinence, he is said to make a proposal’.

2.0 | Similarity and Differences of Offer and Proposal

The terms or conditions of the proposal should be clear and not vague when it is communicated to the promisee. This is because, not all statements are amount to an offer capable of acceptance as it is sometimes just an invitation to treat or supply of information (proposals). Therefore, before an agreement can be reach between the parties, there must be a valid offer and acceptance made. However, determining whether there is an agreement reached between the parties is difficult and the jurists have taken strict approach to distinguish it. One of the approaches to distinguish whether the offer is capable of acceptance is the objectivity test. Furthermore, the acceptance must exactly fit the proposal to allow the proposal to be converted in to a promise (binding contract) as the acceptance of the proposal must be...