Tutorial 4

Topic 3

Formation of Contract - First Element: Proposal

True/false (Support your answer with relevant authorities)

1. All contracts are agreements but not all agreements are contracts.
True. According to Abdul Malik Ishak JCA, essential elements in forming contracts are Offer,
Acceptance, Intention to create legal relations, Consideration, Capacity, Free Consent,
Certainty/Mutuality and Legality. However, according to the case Sulisen Sdn Bhd v Kerajaan
Malaysia, the high court stated that the offer and acceptance when taken together would form the
‘agreement’ xxxx *** S2 g and h

2. An agreement which is not enforceable by law is a voidable agreement.

True. According to the case Sulisen Sdn Bhd v Kerajaan Malaysia, It is the parties
that must intend that the agreement to have legal force and the courts will only
enforce what the parties intend should be enforced xxxx ****s2(g)
 Void- is not legally to enforce
 Voidable- the party being defaulted have the option to void the contract or not
( customer can choose to refund or keep the bottle)

3. Free consent of the parties is one of the pre-requisites for formation of a valid contract.
True, Free consent is one of the essential elements in forming contracts according to Abdul Malik
Ishak JCA s10 (1)of CA

4. A promise is made when a proposal is accepted by the intended person.

False, promise only can made before or after consideration S2(b) of CA

5. Alex proposes to Brown, a famous painter, RM 5,000 for a portrait. Christ, who is standing nearby
may accept the proposal. (F)
False, according to S 4 (1) of CA , the communication of a proposal is complete when it comes to the
knowledge of the acceptor. Alex do not make offer to Christ, he only offer Brown, only Brown can
accept the proposal. Xxxx

6. A proposal may be revoked by the lapse of the time prescribed in the proposal for its acceptance.

True, lapse of time is one of the method of revoking a proposal under S 6(b) of CA

7. A enters a shop and picks up a drink at RM1.50. He shows it to B, the shop-owner and silently puts
RM1.50 on the counter. There is no valid proposal from A.
False, In Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd case, the
The English Court of Appeal affirmed that the customer made a proposal to buy when he
picked up the medicine bottle from the shelf and brought it to the counter. Same to this
situation, A made a proposal to buy when he pick up the drinks and shows it to B. If B keep the
RM 1.50 from A, that’s mean that B accept A’s proposal to buy the drink. S9 of CA .. states
that / specifies that
8. Harry sent a whatsapp message to Frankie, offering to sell his car for RM 34,000. The
communication of a proposal is complete after Frankie read the message from Harry.

True, according to S 4(2)(a) of CA ,the communication of an acceptance is complete as against the

proposer, when it is put in a course(on the way ) of transmission to him, so as to be out of the
power of the acceptor. *** S4(1) of CA

9. Ashley revokes his proposal to Ben by email. The revocation is complete as against Ashley, when the
email is sent. It is complete as against Ben, when Ben receives the email.
True, according to S 4 (3) of CA , the communication of a revocation is complete when
1. as against the person who makes it, when it is put into a course of transmission to
the person to whom it is made, so as to be out of the power of the person who makes
it;
2. as against the person to whom it is made, when it comes to his knowledge.

10. Display of goods on the shelves at the hypermarket is considered as a proposal.

False, it is considered as invitation to treat. Fisher & Bell and Pharmaceutical Society of Great
Britain v Boots Cash Chemists (Southern) Ltd

11. Advertisement to sell goods is a proposal from the seller and a contract is made when a customer
made an acceptance.
False, advertisement is an invitation to treat Partridge v Crittenden Coelho v The Public
Services Commission Nai Yau Juu v Pasdec Corp Sdn Bhd

12. An application to enter a college is only an antecedent step towards communication and does not
constitute a proposal.
False, the application is considered as proposal according to Ong J in Coelho v The Public
Services Commission. (the company or uni is the one to make the offer) xxxx

True, Abdul Rashid v Island Golf