Contract Act 1950 of Malaysia
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Journal of Politics and Law
Vol. 4, No. 1; March 2011
Clarification of Rules of Acceptance in Making Business Contracts
Dr. Md. Abdul Jalil Associate Professor of Law Department of Business Administration, Faculty of Economics and Management International Islamic University Malaysia (IIUM) E-mail: abduljalil@iiu.edu.my, abd_jalil2@yahoo.com Abstract Business firms and Business corporations enter into thousands of contracts everyday. Making a formal and written contract is very important for business corporations and firms although oral contracts are accepted and recognized by law. There are certain rules on making a valid formal contract. If the business firms do not have knowledge of those contract formation rules and they make contracts in ignorance of those rules, their contracts would be liable to be declared as null and void by the court of law if it is referred to it to determine its validity or to get a remedy for breach of contracts by one of the parties in the contract. In this paper I have not discussed all the elements of a valid contract. I have discussed only one of the fundamental elements of a valid contract that is ‘acceptance’. In a business contract, there must have be an ‘offer’ and an ‘acceptance’, to make a valid contract, if not the contract will not be valid, recognized and enforceable in the court of law. The objective of this paper is to clarify the rules of making a valid ‘acceptance’ which may lead to making a binding contract between the parties. Keywords: Offer, Acceptance, Rules of acceptance, Communication of acceptance, Unqualified acceptance, Revocation of acceptance 1. Introduction ‘Acceptance’ is one of the fundamental elements for making a binding contract. It is essential to determine when an acceptance is complete and a binding contract emerges. At the beginning of a business contract, the parties negotiate among themselves to buy certain goods or real property. When this negotiation takws a long time, it
Journal of Politics and Law
Vol. 4, No. 1; March 2011
Clarification of Rules of Acceptance in Making Business Contracts
Dr. Md. Abdul Jalil Associate Professor of Law Department of Business Administration, Faculty of Economics and Management International Islamic University Malaysia (IIUM) E-mail: abduljalil@iiu.edu.my, abd_jalil2@yahoo.com Abstract Business firms and Business corporations enter into thousands of contracts everyday. Making a formal and written contract is very important for business corporations and firms although oral contracts are accepted and recognized by law. There are certain rules on making a valid formal contract. If the business firms do not have knowledge of those contract formation rules and they make contracts in ignorance of those rules, their contracts would be liable to be declared as null and void by the court of law if it is referred to it to determine its validity or to get a remedy for breach of contracts by one of the parties in the contract. In this paper I have not discussed all the elements of a valid contract. I have discussed only one of the fundamental elements of a valid contract that is ‘acceptance’. In a business contract, there must have be an ‘offer’ and an ‘acceptance’, to make a valid contract, if not the contract will not be valid, recognized and enforceable in the court of law. The objective of this paper is to clarify the rules of making a valid ‘acceptance’ which may lead to making a binding contract between the parties. Keywords: Offer, Acceptance, Rules of acceptance, Communication of acceptance, Unqualified acceptance, Revocation of acceptance 1. Introduction ‘Acceptance’ is one of the fundamental elements for making a binding contract. It is essential to determine when an acceptance is complete and a binding contract emerges. At the beginning of a business contract, the parties negotiate among themselves to buy certain goods or real property. When this negotiation takws a long time, it