Question 1

Contractual agreement has traditionally been analysed in terms of

offer and acceptance. One party, the offeror, makes an offer which once
accepted by another party, the offeree, creates a binding contract. S2(a)
An offer is an expression of willingness to contract in specified terms,
intention that it become binding as soon as it is accepted by offeree. The
expression of an offer may take different forms ,such as a letter,
newspaper advertisement, phone call ,as long as it communicates the
basis on which the offeror is prepared to contract. S2(C) The person
making the proposal is called the offeror, Section 4 Ca 1950
communication of proposal is complete when it comes to the knowledge
of the person to who made it.In this case ,Ramlee(offeree) offers
Saloma(offeror) to buy her car to him for RM80,000.Ramlee is willing to
buy the car without being forced by Saloma. Both I them know that the
type of car which Ramlee offers one. The offer is made with specific terms
to a specific person. Ramlee needs to tell Saloma that he is going to buy
the car by late Friday.
In Carlill v Carbolic Smoke Ball co(1893) the defendants were the
manufactures of smokeballs which they claimed could prevent flu. They
published advertisements stating that if anyone used their smokeballs for
a specified time and still caught flu, They would pay that person 100
dollar, and that to prove they were serious about the claim, they had
deposited 1000 dollar with their bankers. Mrs Carlill bought and used a
smokeball , but nevertheless ended up with flu. She Therefore claimed the
100 dollar, but the company refused to pay. They argued that their
advertisement could not give rise to contract, since it was impossible to
make a contract with the whole world, and therefore they were not legally
to pay the money. The court rejected the argument, which held that the
advertisement did constitute an offer to the world at large. It became a
contract when it was accepted by Mrs carllil using the smokeball and
getting flu. She was entitled to get 100 dollar.

Next case , Harvey v Facey . The privy council held that there was
no contract between the parties. Facey had not directly answered the first
question as to whether they would sell the lowest price stated was merely
responding to request for information not an offer. There was thus no
evidence of an intention that the telegram sent by facey was to be an
offer.
An acceptance is unconditional agreement to all the terms of that
offer. Acceptance will often be oral or in writing ,but in some cases an
offeree may accept an offer by doing something, such as delivering goods
in response to an offer to buy. Section 7(b) ,acceptance must be made in
the manner prescribed by the offeror. In this situation, Saloma had not
decide which type of communication she will accept regarding the offer.
Ramlee was using text message to her about the confirmation to buy the
subject. Unfortunately, Saloma accidentally leaves her phone behind when
she leaves. S4(2)(a) said that communication of acceptance is complete
when it is put in a course of transmission to the offeror. S4(2)(b) also
stated that the communication of an acceptace is complete as against the
acceptor,when it comes to the knowledge of the proposer. In any means of
communication, an acceptance of an offer by the offeror must be made by
any communication tools that can deliver information immediately to the
offeree and clearly deliver the information without any interruption. In this
case, Ramlee tried to message saloma by phone to inform about the
acceptance but failed. Saloma though that Ramlee did not accept her offer
and maybe she received the message after the due date which is
unreasonable time.
Example Case regarding this situation is Ignatius v Bell. P sued for
specific performance over his rights to purchase Ds land. The option was
to be exercised on or before 20th August 1912. the parties had
contemplated the use of post as means of communication. P sent a notice
of acceptance by registered post in Klang on 16th August 1912 but was
not delivered until 25th August 1912 because P was away. The letter was
at the Post Office until picked up by D. The court applied Section 4

Contracts Act and held that the option was duly exercised by the P when
the letter was posted on 16th August 1912. On the other hand,
acceptance is complete as against the acceptor, when it comes to the
knowledge of the proposer. While the proposer is bound upon dispatch of
acceptance by the acceptor, the acceptor is not bound until it was actually
received by the proposer.
Another case to support this in Bressan v Squires, Squires gave
Bressan an option to purchase land. Clause 1 provided that it could be
exercised by notice in writing addressed to me at any time on or before
20 December, 1972. On 18 December Bressan posted a notice, addressed
to Squires, exercising this option. It was received on 21 December. The
general rule is that a contract is not concluded until acceptance of an
offer is actually communicated. In this case the parties considered the
option could be exercised by post. Consequently, the exception applied.
However, in this case there was further language used in the option that
suggested actual notice of acceptance was required before acceptance
would occur; consequently Ps case failed.
The conclusion is the offer made by saloma and Ramlee void
because at first the offer occurred but when the acceptance phase, the
message that ramlee send to saloma failed. Saloma has right to sell the
item to another parties. Ramlee cant sue saloma as the offer was void.

Question 2
The first requirement for a valid contract is an agreement, which
normally consists of an offer and an acceptance and involves a meeting of
the minds. Section 2(a) An offer is an expression of willingness to
contract in specified terms, intention that it become binding as soon as it
is accepted by offeree. The expression of an offer may take different forms
,such as a letter, newspaper advertisement, phone call ,as long as it
communicates the basis on which the offeror is prepared to contract.
Section 2(C) The person making the proposal is called the offeror,
Section 4 Ca 1950 communication of proposal is complete when it comes
to the knowledge of the person to who made it. The objective of offer
should be legal one. Selling a car to other party is legal activity. Section
2(b) states that a proposal when the person to whom the proposal is
made signifies his assent thereto the proposal is said to be accepted.
When an offer is expressed by word spoken or written it is termed as an
express offer.
Example case is Harvey v Facey. The Privy Council held that there
was o contract concluded between the parties. Facet had not directly
answered the first question as to whether they would sell and the lowest
price stated was merely responding to a request for information not an
offer . There was thus no evidence of an intention that telegram sent by
facey was to be an offer.
Another case is Smith v Hughes. Hughes trained racehorses. Smith
was a farmer who offered to sell oats to Hughes. Smith showed Hughes a
sample of the oats for sale, after which Hughes agreed to purchase them.

Hughes believed that the oats he was shown were 'old oats'. This was
important to him because racehorses only eat old oats. However, the oats
supplied, and which were shown to Smith in the sample, were in fact 'new
oats' ('green oats'). Upon discovering the oats were 'new', Hughes
endevoured to return them and avoid paying; Smith refused to take them
back and sued for the price. The Court held that there was a contract; it
did not matter that the subjective intention of the parties differed - that is,
that Smith intended to sell new oats and Hughes intended to buy old oats.
Hughes' conduct was such that a reasonable person would believe he was
consenting to the terms offered by Smith.
The given case is under the element of legal of capacity, which
section 11 contract act that every person is competent to contract who
us of the age of majority according to the law to which he is subject, and
who is of sound mind, and not disqualified from contracting by any law to
which he is subject. Capacity refers to the ability of the parties to enter
into a contract and a person must also be mentally sound. In this
situation, Andrew had enter an agreement with bertha but he cant
remember anything regarding that. Andrew had a bad time and he was
drunk when he agreed to enter the agreement. Based on the section
12(3) a person who is usually of sound mind ,but occasionally of unsound
mind, may not make a contract when he is of unsound mind. Andrew dont
have power to control his mind and just signed the agreement without
understand anything on the agreement. Based on section 12(1) a person
is said to be of sound mind for the purpose of making a contract if at the
time when he make it, he is capable of understanding it and of forming a
rational judgement as to its effect upon his interests. Andrew dont even
understand what happen at that moment and just simply sign the
agreement and Andrew is poor that agreement made his friend shocked
about it. It was not right decision because Andrew dont have much
money to enter that agreement although he was conscious at that
moment. Andrew was temporarily incompetent of entering into an
agreement.

In Gibbons v Wright case, Gibbons and her two sisters- in law

became owners of land as joint tenants. Subsequently the sisters
executed documents converting the joint tenancy in common. After their
death Gibbons claimed that these documents were ineffective because
the sisters lacked mental capacity. Their Honours then considered if the
lack of capacity rendered the contract void or voidable. They concluded
lack of capacity made a contract voidable only so unless the sisters, in
their lifetime, sought to avoid the contract it remained valid and
enforceable. Andrew need a support from his friend Alan to explain about
his problem and stuff that he did on the night to lead he signed the
agreement due to drunk. In this case Bretha seems know that Andrew was
unconscious but she keep arrange the agreement with Andrew.
In other case, Blomley v Ryan . Blomley entered into a contract to
purchase a farm from Ryan. Ryan was 78 and was suffering the effects of
prolonged and excessive consumption of alcohol. When Ryan sought to
resile from the sale Blomley sought specific performance one issue (this
case will also crop up later in the unit) was whether Ryan had the requisite
capacity to contract. Inadequacy of consideration will be relevant but not
determinative. In cases like this where intoxication is the main
disadvantage relied upon, the adequacy (or otherwise) of consideration is
particularly important. In this case the sale price was significantly below
market price the only explanation for this was that Ryan was old and
impaired by habitual drinking to excess and who contracted during a bout
of heavy drinking rendering him utterly incapable of forming a rational
judgment about the terms of any business transaction. This was
apparent to Blomley who took unfair advantage of that condition.
Specific performance and damages were, therefore, denied.
The conclusion is Andrew should fight Bertha in court. Andrew can
claim that he really unsound mind at the moment and get help from Alan
to explain everything. That agreement is void. A drunkard is a person who
is under the influence of alcohol . When he is drunk, he cannot understand

an agreement, therefore cannot enter into an agreement. Any agreement

entered will be void.