Proposal and Acceptance (law 416)
PROPOSAL AND ACCEPTANCE
The first requisite of a contract is that the parties should have reached agreement. Generally speaking, an agreement is made when one party accepts an offer made by the other party.
Store v Manchester CC [1974] W.L.R 1403
A proposal is an expression of willingness to do contract on certain terms, made with the intention that it shall become binding as soon as it is accepted by the other person to whom it is addressed.
An agreement between two or more parties is constituted by a proposal and an acceptance of it
Section 2(a) Contracts Act 1950 –
A proposal is made
… When one person signifies to another his willingness to do or abstain from doing, with the view to obtaining the assent of that to the act or abstinence, he is said to make a proposal’
Although the word proposal is used in the act, it carry’s the same meaning as “offer” in the English law.
It can be inferred that the proposal has become a promise and then he is called the promisor and the person accepting the promise is called the promisee.
eg Azizul offers to buy Samdan’s car for RM10,000/-. Azizul is making a proposal, hoping that Samdan will accept. When Samdan accepts the offer, an agreement or promise between them is created.
In the above situation Azizul is the offeror and Samdan is the offeree.
An offer must be clear, complete, final and specific to avoid any vagueness.
Guthing v Lynn (1831) 2B & AD 232
Lynn offered to buy a horse from Guthing. He was to pay 5 pounds extra if the horse brought him good luck. The condition laid was held by the court to be too vague to constitute a binding contract.
Tan Geok Khoon & Gerald Francis Robless v Pava Terubong Estate Sdn Bhd [1988] 2 MLJ 672
Plaintiff were executors and trustees of deceased’s estate. They claimed various correspondence between the deceased and the defendant constituted a contract. The court agreed because the deceased had agreed to and accepted a counter offer from the defendant and paid the balance of the price. Defendant had accepted payment by issuing a receipt signed by a director.
TO WHOM CAN A PROPOSAL BE MADE
A proposal may be addressed either to an individual, or to a group of persons, or to the world at large, and may be made expressly or by conduct.
See Carlill v Carbolic Smoke Ball Co.
a) a particular person
X went to Y’s shop and offered to buy a pair of shoes. X’s offer cannot be accepted by Z who owns a shoe shop nearby because he overheard X’s offer.
Section 2(b) Contracts Act provides that
… when a person to whom the proposal is made” which appears to say that only the addressee may accept the proposal.
Boulton v Jones (1857) 2H & N 564
Defendant had business dealing with a shopkeeper named Brocklehurst. The defendant had ordered some stocks from B but on the day of the order B had sold his business to the Plaintiff. The Plaintiff delivered the goods without informing the Defendant of the change of ownership.; The Defendant then refused to make any payments. It was held that the plaintiff had no rights to accept an offer not made to him.
b) To the General Public
Here anyone who meets all the terms of the proposal may accept the proposal.
Eg. Azizul offered RM 100/- for the safe return of his cat at an address advertised. Azizul’s offer is to the general public and those who read or knew of the offer may accept the offer and claim for the reward
Carlil v Carbolic Smoke Ball Co
The defendant’s advertised that they would offer a sum of 100 pounds to anyone who would still succumb to influenza after using a certain product according to the instructions for a fixed period. The plaintiff read the advertisement and used the product accordingly but still contracted with influenza. He claimed the 100 pounds from the defendants. The court held that the advertisement was an offer to the world at large and those who were willing to use the product as instructed had then accepted the offer. Acceptance need not be communicated to the Defendants. The defendants had in fact deposited 100 pounds into a bank account for any claims.
The first requisite of a contract is that the parties should have reached agreement. Generally speaking, an agreement is made when one party accepts an offer made by the other party.
Store v Manchester CC [1974] W.L.R 1403
A proposal is an expression of willingness to do contract on certain terms, made with the intention that it shall become binding as soon as it is accepted by the other person to whom it is addressed.
An agreement between two or more parties is constituted by a proposal and an acceptance of it
Section 2(a) Contracts Act 1950 –
A proposal is made
… When one person signifies to another his willingness to do or abstain from doing, with the view to obtaining the assent of that to the act or abstinence, he is said to make a proposal’
Although the word proposal is used in the act, it carry’s the same meaning as “offer” in the English law.
It can be inferred that the proposal has become a promise and then he is called the promisor and the person accepting the promise is called the promisee.
eg Azizul offers to buy Samdan’s car for RM10,000/-. Azizul is making a proposal, hoping that Samdan will accept. When Samdan accepts the offer, an agreement or promise between them is created.
In the above situation Azizul is the offeror and Samdan is the offeree.
An offer must be clear, complete, final and specific to avoid any vagueness.
Guthing v Lynn (1831) 2B & AD 232
Lynn offered to buy a horse from Guthing. He was to pay 5 pounds extra if the horse brought him good luck. The condition laid was held by the court to be too vague to constitute a binding contract.
Tan Geok Khoon & Gerald Francis Robless v Pava Terubong Estate Sdn Bhd [1988] 2 MLJ 672
Plaintiff were executors and trustees of deceased’s estate. They claimed various correspondence between the deceased and the defendant constituted a contract. The court agreed because the deceased had agreed to and accepted a counter offer from the defendant and paid the balance of the price. Defendant had accepted payment by issuing a receipt signed by a director.
TO WHOM CAN A PROPOSAL BE MADE
A proposal may be addressed either to an individual, or to a group of persons, or to the world at large, and may be made expressly or by conduct.
See Carlill v Carbolic Smoke Ball Co.
a) a particular person
X went to Y’s shop and offered to buy a pair of shoes. X’s offer cannot be accepted by Z who owns a shoe shop nearby because he overheard X’s offer.
Section 2(b) Contracts Act provides that
… when a person to whom the proposal is made” which appears to say that only the addressee may accept the proposal.
Boulton v Jones (1857) 2H & N 564
Defendant had business dealing with a shopkeeper named Brocklehurst. The defendant had ordered some stocks from B but on the day of the order B had sold his business to the Plaintiff. The Plaintiff delivered the goods without informing the Defendant of the change of ownership.; The Defendant then refused to make any payments. It was held that the plaintiff had no rights to accept an offer not made to him.
b) To the General Public
Here anyone who meets all the terms of the proposal may accept the proposal.
Eg. Azizul offered RM 100/- for the safe return of his cat at an address advertised. Azizul’s offer is to the general public and those who read or knew of the offer may accept the offer and claim for the reward
Carlil v Carbolic Smoke Ball Co
The defendant’s advertised that they would offer a sum of 100 pounds to anyone who would still succumb to influenza after using a certain product according to the instructions for a fixed period. The plaintiff read the advertisement and used the product accordingly but still contracted with influenza. He claimed the 100 pounds from the defendants. The court held that the advertisement was an offer to the world at large and those who were willing to use the product as instructed had then accepted the offer. Acceptance need not be communicated to the Defendants. The defendants had in fact deposited 100 pounds into a bank account for any claims.
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