EXERCISE - law of contract

1. A, an engineer, orders for a machine. The manufacturer fails to supply the machine in
accordance with the main specification for the machine. What remedy is available to the
engineer?

A. Damages.
B. Specific performance.
C. Injunction
D. Rescission and damages.

2. An agreement made out of love and affection by Jenny, the mother of Jane, her daughter,
to buy her a car is:

A. Enforceable by law.
B. Not enforceable by law.
C. Enforceable if made in writing.
D. None of above.

3. Ali, on 23 August, through telephone, made an offer to Ben to sell his house. Ben
responded that he would reply on 25 August. Ben, on 24 August, sent a letter to say that he
agrees to buy Ali’s house and the letter is received by B on 30 August. On 29 August Ali
has sold his house to Chitra. What action can Ben take against Ali?

A. Ben cannot take action against Ali because his letter is received by Ali late.
B. Ben cannot take action against Ali because Ali does not receive Ben’s reply on 25
August.
C. Ben can claim damages against Ali because Ben’s reply on 24 August concluded a
contract.
D. None of the above.

4. A contract must have the elements of:

A. Consideration.
B. Intention to create legal relation.
C. Acceptance.
D. All of above.

5. Which case best described an advertisement is an offer?

A. Hyde v Wrench.
B. Carlill v Carbolic Smoke Ball & Co.
C. Harris v Nickerson.
D. Pharmaceutical Society of Great Britain v Boots Cash Chemists Ltd.

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6. Ali tells Johan that he will build Johan’s house for RM100,000. Ali is said

A. To have accepted Johan’s offer to build his house for RM100,000.

B. To have made an agreement with Johan to build his house for RM100,000.
C. To have made an acceptance to Johan to build his house for RM100,000.
D. None of the above.

7. Advance Stationery agreed to supply 50 reams of paper for RM10 per ream to BC
Engineers. They later refused to do so. The price has now gone up to RM15 per reams. BC
Engineers can claim from Advance Stationery:

A. The total cost to purchase 50 reams of paper.

B. The additional cost to purchase the 50 reams of paper.
C. The total cost they could have obtained for charging their client on the use of the 50
reams of paper.
D. None of the above.

8. Mansor tells Jaffar that he intends to sell his car for RM10,000. Mansor is can be said to
have made:

A. An offer to Jaffar to sell his car for RM10,000.

B. An acceptance to Mansor to sell his car for RM10,000.
C. Aninformation to Mansor to sell his car for RM10,000.
D. None of the above.

9. A contract with consideration is:

A. Voidable.
B. Void.
C. Invalid.
D. Valid.

10. An advertisement that the goods is for sale is:

A. An offer.
B. A sale.
C. A joint sale.
D. An invitation to treat.

11. Which of the following contract is void?

A. A contract for natural love and affection made in writing and registered by parties in
near relation.
B. A contract for past consideration.
C. A contract for payment of debt limited by law.

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 D. A contract to carry prohibited drug.

12.: Which of the following agreements can a minor enter into?

A. The purchase of a luxury car.

B. The purchase of a pleasure yacht.
C. The purchase of basic necessaries.
D. The purchase of present for his parents’ birthday.

13. Which of the following contracts is voidable?

A. A contract made under coercion.

B. A contract made under undue influence.
C. A contract made within intention to deceive another party.
D. All of above.

14. An offer made to the world at large is known as:

A. A bilateral offer.
B. A multi-lateral offer.
C. A collateral offer.
D. A unilateral offer.

15. Which of the following agreement is presumed to have no intention to create legal
relation?

A. An agreement to buy a laptop from a shop.

B. An agreement made between husband and wife.
C. An agreement undertaking to repair a house for RM40000.
D. An agreement to buy a car as a gift to a friend.

16. A person who accepts an offer is known as: :

A. An offeror.
B. A promisor.
C. An offeree.
D. None of the above.

17. Mariam makes an offer to sell her watch for RM200 to Nor. She decides to sell it to Lina
who has offered to buy it from her for RM300. She can sell it to Lina:

A. Before Nor accepts her offer.

B. Without having to inform Nor.
C. Provided she informs Nor that she has decided to revoke her offer to her.
D. None of the above.

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18. In the making of a contract, consideration:

A. Must be adequate.
B. Need not be sufficient.
C. Need not be adequate.
D. Must be adequate though not sufficient.

19. Which of the following agreements is not enforceable by law?

A. Commercial agreement.
B. Business agreement.
C. Domestic agreement.
D. None of above.

20. What remedy is available to an innocent party for a breach of a contract against the party
in breach?

A. Frustration.
B. Negligence.
C. Consideration.
D. Repudiation and damages.

21. Cinta offered to sell her laptop to Jusoh for RM800. Jusoh’s reply that he wanted buy it
for RM500 is:

A. A revocation of Cinta’s offer.

B. A counter offer to Cinta’s offer.
C. An unconditional acceptance of Cinta’s offer.
D. A request for further information regarding Cinta’s car.

22. An agreement, the meaning of which is uncertain is:

A. Valid.
B. Legal.
C. Void.
D. Voidable.

23. A contract made between two parties is known as:

A. Unilateral contract.
B. Bilateral contract.
C. Multiple contract.
D. None of the above

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24. An acceptance of an offer by post is effective:

A. When the letter of acceptance is written

B. When the letter of acceptance is posted
C. When the letter of acceptance is taken to the post office.
D. When the letter of acceptance is received by the offeror.

25. Sidek agreed to repair Liza’s computer. When Sidek returned Liza’s computer after the
repair, she promised to pay him RM100 for the work. Will Sidek be entitled to the
RM100 if Liza refuses to pay him?

A. Yes, because she has made a promise to compensate him for the work done.
B. Yes, because the $100 is adequate consideration for her to pay him.
C. Yes, because the $100 is sufficient consideration for her to pay him.
D. None of the above.

26. Under what circumstances does a contract not require consideration?

27. Briefly explain postal rule.

28. State TWO (2) conditions of an offer.

29. What is a void agreement?

30. Explain the term voidable agreement.

31. Describe briefly the ways an offer can be revoked.

32. State the 3 conditions for acceptance.

33. Explain 4 ways a contract can be discharged.

34. Explain adequate of consideration to a contract.

35. Explain the concept of privity of contract.

36. What is an exclusion term in a contract?

37. State 4 situations an agreement can be voidable.

38. Explain the rule to a claim for damages in a breach of a contract.

39. Explain frustration of a contract.

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40. Lee wrote to Ha, his friend, that he wanted to sell his Proton Saga. When Ha received
Lee’s letter, he wrote to ask the model of his car. Lee, in reply, wrote to inform him the
model of his car is a Proton Saga 1.3, Year 2001 model. When Ha received Lee’s letter,
he wrote to say he wanted to buy his car for RM5000 and that, if he did not received his
reply in 3 days’ time he would assume he has agreed to sell his car to him. Lee did not
reply.

Ha claimed that there was a contract made between him and Lee on the sale of his car. He
now wants to take legal proceedings against Lee for breach of contract. Advise Lee.

41. On 1 Jan, Mansor wrote to Fuzi to sell his Acer laptop for RM1000. On the same day,
Fuzi wrote to Mansor to buy his Acer laptop for RM1000. Their letter reached each other
on 6 Jan. Later on 8 Jan, Fuzi wrote to Mansor to ask the model of his laptop. On 12 Jan,
when Mansor received Fuzi’s letter, he wrote to him to inform him that his laptop was a
Model 2020. On 18 Jan, when Fuzi received Mansor’s reply, he wrote to him to buy his
laptop for RM800. On the same day, in the afternoon,Mansor changed his mind and he
wrote to tell Fuzi he would not sell his laptop anymore. Mansor’s letter, of the afternoon
of 18 Jan, was received by Fuzi on 24 Jan. On 23 Jan, Fuzi wrote to Mansor to tell him he
wanted to buy his laptop for RM1000 and his letter was received by Mansor on 28 Jan.
But Mansor did not reply.
Explain whether there is a contract between them supporting your answer with reference
to the law.

Answer guide

The issue is whether there was a contract made between Mansor and Fuzi. If there was
then what is its consequence.
On 1 Jan, Mansor wrote to Fuzi to sell his Acer laptop for RM1000. Mansor has made an
offer: s 2(a) CA 1950 to sell his laptop to Fuzi. His offer was not absolute but at the time
of posting Fuzi has not received his letter yet. Therefore, the communication of the offer
is not complete as required under s 4(1). On the same day, Fuzi wrote to Mansor to buy
his laptop for RM1000. Fuzi has not made an absolute offer to Mansor to buy his laptop
because his offer has not been received by Mansor as his letter was still in the post. The
communication of his offer was incomplete: s 4(1). On that day there were two offers,
one from Mansor to Fuzito sell his laptop and the other from Fuzi to Mansor to buy his
laptop. Their offers crossed each other in the post. In Tinn v Hoffman the court held that
cross offer did not end in a contract because the parties were unaware of each other’s
offers.

On 6 Jan, they received each other’s letters. On 8 Jan, Fuzi wrote to Mansor to ask the
model of his laptop. Fuzi was not making an offer or an acceptance but he was making an
inquiry as to the model of Mansor’s laptop. In Harvey v Facey the court held that an

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 inquiry for more information does not lead to any contract. On 12 Jan, when Mansor
received Fuzi’s letter, he wrote to inform him that his laptop was a Model 2020. Again
Mansor was not making an offer or an acceptance but he was only giving more
information about his laptop. So until then there was no contract made between them.
On 18 Jan, when Fuzi received Mansor’s letter, he wrote to buy his laptop for RM800.
Mansor has made an offer to Fuzi to sell his laptop for RM1000 and Fuzi in reply said he
would buy his laptop for RM800. Fuzi was, therefore, making a counter offer to Mansor.
In: Hyde v Wrench the court held that when a counter offer was made to an offer, the
offeree has rejected the offer and introduced a new offer resulting in no contract being
made between the parties. For there to be an acceptance it must be absolute an
unqualified: s 7(a) CA 1950.
On the same day, 18 Jan, Mansor wrote to Fuzi to revoke his offer. Mansor’s revocation
is only effective when it is received by Fuzi: s 5(2). This means Fuzi was only aware of
Mansor’s revocation on 24 Jan when he received that letter.
On 23 Jan, Fuzi wrote to Mansor to buy his laptop for RM1000. As Mansor’s earlier offer
had been rejected by Fuzi, there has been no contract made between them. Fuzi’s offer of
the 23 Jan is, therefore, a new offer to Mansor. An offer must be absolute and unqualified.
It must be communicated by the offeree to the offeror. The communication of that offer is
complete when it comes to the knowledge of the offeree. s 4(1). Mansor was, therefore,
only aware of Fuzi’s offer on 28 Jan. Since there was no reply of acceptance from Mansor
to Fuzi’s offer, there is no contract made between them.
In conclusion, there is no contract made between Mansor and Fuzi on the sale of his
laptop. Mansor cannot be liable to Fuzi even if Fuzi is to take legal action to claim
damages from him.

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