Offer and Acceptance

LAW 2101 FOUNDATION OF BUSINESS LAW

GROUP ASSIGNMENT

AUGUST 2012

In Malaysia, the law of contract is governed by the Contracts Act, 1950 (CA, 1950). Contract Law is provides security of the recipient of a promise who has given something in return for that promise. Contract law also provides security for those who act in reliance on the deals struck. Besides that, contract law will enforce bargains and thereby induces parties to conclude contracts in the first place. An agreement is the offer made by one party (offeror) which was accepeted by another party (offeree). Zarina had contacted Chong and offered to sell him her kite building business for RM 22,000. The offer was to remain open until the 31st June. S.2 (a) of CA, 1950 states that an offer is something which is capable of being an agreement upon acceptance and it must be definite promise to be bound which the specified terms will be agreed by both parties. This section can be supported in the case between PRESTON CORPORATION SDN BHD V EDWARDNLEONG [1982] 2 MLJ 22. The plaintiff was a company of books publisher who entered the business relationship regarding to the printing of school textbooks with the respondent who were a firm of printers. The respondent submitted quotation for printing of books to the defendant and the defendant then issued the printing orders. The court held that the quotation was a mere supply of information but not an offer. An offer is an intimation of willingness by an offeror to enter into a legally binding contract. Its terms must indicate that it is to become binding on the offeror as soon as it has been accepted by the offeree and it is absent here. Therefore, in this case, Zarina made an offer to Chong and not an invitation to treat. This is because an invitation to treat invites people to make offers and the offer is something which is capable of being an agreement upon acceptance. The offer made by Zarina was a specific offer which refers to the offer that is made to a...