Introduction

The issues which arise in these scenarios between Ken, Ben, Terence, and Martin are
relevant to the contract law. Parties involved in the contract should act according to the
agreement as it is legally binding, and failure to comply will lead to legal consequences. The
elements of contract law will be reviewed to determine whether Ken has a legally enforceable
contract in each of the scenarios and whether he is liable for breach of contract with any of
the parties stated.
Advertisements constitute an invitation to treat, which is “a preliminary
communication between the parties at the stage of negotiation. It is merely an attempt to
induce an offer”. This can be demonstrated in Patridge v. Crittenden (1968) 1 AII ER 421
where the plaintiff advertised in a newspaper which stated “Quality Bramblefinch hens, 25/-
each”. He was convicted of the offence of offering the sale of wild birds, but it was appealed.
The court held that advertisement for sale of goods is not an offer but an invitation to treat as
there was no intention to be bound.
Similarly, Ken’s advertisement for sale of his comics for RM10,000 was not an offer
but simply an invitation to treat as there was no intention to be bound. This distinction
between an offer and invitation to treat is important as acceptance an invitation to treat is
proposing an offer whereas accepting an offer constitutes a binding contract. Thus, Ken’s
advertisement was merely inviting people to offer to purchase, but not offering to sell his
comics. The case of Patridge v. Crittenden (1968) supports that an advertisement for the sale
of goods is not a proposal but an invitation to treat.

Ben v Ken
On 2nd September 2019, Ben offered RM7,000 for Ken’s comics and if Ken did not
reply, he would assume the comics were his. The issue in this scenario is whether the offer by
Ben is accepted by Ken when he did not respond after three days.
Offer or “proposal” means “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
or abstinence, he is said to make a proposal.” under Section 2(a) of the Act. Subsequently, an
acceptance is “when the person to whom the proposal made signifies his assent thereto, the
proposal is said to have been accepted” under Section 2(b) of the Act. This acceptance must
be communicated either in writing, by words or by conduct. However, an act of silence by the
offeree does not constitute an acceptance. In Felthouse v Bindley (1862) 142 ER 1037, the
plaintiff wrote a letter to his nephew saying “If I hear no more about him I shall consider the
horse mine at £40”. However, by mistake the defendant sold off the horse to someone else.
The plaintiff then sued the defendant for selling the horse. In this case, the court held that
there was no valid contract between the plaintiff and his nephew. It shows that acceptance
must be communicated clearly, and that silence cannot be a mode of acceptance.
Ken did not reply to the offer made by Ben. The proposal made by Ben on 2nd
September is only in force until 4th September. Since Ken remained silent and made no
positive conduct indicating an acceptance by 4th September, the offer is considered revoked
as of Section 4(1) of the Act which states that “acceptance is only effective when it has been
communicated, and silence does not constitute acceptance.” Hence because there was no
acceptance expressed by Ken., the offer was not accepted, and no binding contract was
formed. The issue between Ben and Ken is similar to that case, where the rule that silence is
not a mode of acceptance is applied.
There is no legal contract between Ben and Ken, and Ken is not liable for breach of
contract.

Martin v Ken
On 6th September 2019, Martin bought the comics from Ken for RM12,000. The
issue in this situation is whether Ken and Terence are in a valid contract.
An offer is the first element in a valid contract. The definition of offer and acceptance
is in Section 2(a) and Section 2(b) of the Act, respectively. Section 2(h) of the Act states “an
agreement enforceable by law is a contract.” When the offeree communicates acceptance to
the offeror, a contract is formed and enforceable against both parties. In Hyde v Wrench
(1840) 49 ER, it is held that once acceptance of the offer is successfully communicated, a
binding contract is formed.
Martin made an offer to Ken for RM12,000, and Ken accepted it. After an acceptance
has been communicated between them, a contract is formed. Based on section 2(h) of the Act,
Martin is not allowed to revoke or terminate his offer once Ken has accepted it, and Ken is
not allowed to revoke his acceptance after accepting Martin’s proposal as a contract is
lawfully enforceable, and parties that do not perform based on the contract will suffer legal
consequences.
Martin and Ken have a legally binding contract, and Ken is not liable for breach of
contract.

Terence v Ken
On 5th September 2019, Terence offered RM8,000 for the comics but was rejected.
Ken made another offer at RM9,000 and gave Terence three days to think about it. However,
on 6th September, Ken sold the comics to a third party. Terence wants to sue him because he
did not keep the RM9,000 offer open for three days. The issue in this scenario is whether
Ken’s promise to keep the offer open for three days is a binding contract and if he is allowed
to revoke the offer and sell to a third party.
When an offer is accepted, acceptance must mirror its terms. When new modifications
to the terms are made, the offeror is making a counter offer which automatically destroys the
original offer. A counter offer is “an offer made in response to a previous offer by the other
party during negotiations for a final contract.” In Hyde v Wrench (1840) 49 ER, the defendant
offered to sell his farm for £1,000 but was rejected. The plaintiff made a new offer of £950.
After a few weeks, he wanted to purchase the farm at £1,000 but was denied. The court held
that the original offer of £1,000 was eliminated because a counter offer was made, and the
defendant was not bound to any contract. Next, an option is “merely an undertaking to keep
an offer open for a certain time given by the offeror to the offeree to decide on the purchase
or give time to raise finance.” However, an option is not legally enforceable if not supported
by consideration. Based on Section 2(d) of the Act, consideration is “when, at the desire of
the promisor, the promisee 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 a consideration for the promise.” In Dickinson v Dodds
(1875) 2 Ch D 463, the defendant promised to keep an offer open for the plaintiff. However,
the defendant sold his house to a third party before the expiry of the time given.
Ken rejected Terence’s offer and made another offer of RM9,000 by 7th September.
On 6th September, Ken sold the comics to Martin. Terence wants to sue Ken for not keeping
the offer open for the time given, like in Dickinson v Dodds (1875). Ken making a new offer
to Terence’s offer suggests that he was making a counter offer. The rule applied in this
scenario is that a counter offer is a rejection of the original offer, which is described in the
case of Hyde v Wrench (1840). When the counter offer of RM9,000 by Ken is made, the
initial offer of RM8,000 by Terence is rejected. Also, Ken’s statement of giving Terence
three days was only a promise and not a binding contract. Moreover, Ken was
communicating an offer for the comics, and he may revoke the offer at any time before
acceptance as there was no consideration given by Terence. Hence, he is not obligated to
keep the offer open as “an agreement made without consideration is void” under Section 26
of the Act.
Ken is not liable for breach of contract as there is no legally enforceable contract.
Without any consideration to support the comics, Ken can sell the comics to a third party
before the expiry of time given.

Conclusion
In conclusion, Ken is not bound to any legally enforceable contract with Ben,
Terence, or Martin in each of the scenarios above. He is not liable for breach of contract with
the parties stated as there is no valid contract.
(1495 words)
Reference
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