Business Law

Topics: Contract, Offer and acceptance, Meeting of the minds Pages: 2 (642 words) Published: October 23, 2012
Is there a valid contract between Khalid and Siti?
Law and Application
When Khalid is interested in buying Siti’s painting which she had named “Hawa”, Khalid met Siti and told her that he will pay her RM5,000 for “Hawa”. This is an offer. Offer had be defined in S2(a) Contracts Act 1950 as “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 the Contract Act 1950, a proposal is something which is capable of being converted into an agreement by its acceptance. Moreover, merely giving information is not an offer. For example of Harvey v Facey (1893) case, P telegraphed D – “Will you sell us Bumber Hall Pen? Telegraph lowest cash price.” D replied, “Lowest cash price £900.” P purported to accept the offer. The court held that price information is merely information. There was no offer to accept. Khalil had given clear information that he want to buy Siti’s painting with the price RM 5, 000, the offer is exist. But Siti said she will think about it. Two weeks after she made her mind that she want to sell the painting to Khalid for RM7,000 not Rm 5,000. This is a counter offer not acceptance. Counter offer had be defined in S6(c) Contracts Act 1950 as “by the failure of the acceptor to fulfill a condition precedent to acceptance.” Siti as the offeree makes a count offer revokes the original offer which made by Khalil. Counter offer had also defined in S7(a) Contracts Act 1950 in order to convert a proposal into a promise that acceptance it must “be absolute and unqualified”. It does refer to the case of Hyde v Wrench (1840), D made an offer to sell his house for £1000. P purposely accepted at £950 but D refused, P accepted the original offer of £1000. The court held that counter offer terminated the original offer. There was nothing to accept. Furthermore, acceptance had be define in S2(b) Contracts Act...
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