The aim of this paper is to identify and apply the legal issues based of the given facts in the question. This paper is focused on whether there is a legally binding agreement between A Bank Berhad (the Bank) and Investment Berhad (the Company) which caused the Company to sustain economical losses. The elements of offer, acceptance and intend will be used to analyse if there is a legally binding agreement between them. The discussion would also contain possible existence of breach of contract which could cause the termination of the contract by actions of the Bank and/or the Company, this includes misrepresentation of statement and conditional transaction or condition precedent of the contract. Past cases and statutes from the Contract Act 1950 will be use throughout the discussion to support the decision and to clarify the existence of a legally binding contract.
The first issue is to identify whether there is an offer made by the Bank to The Company. The definition of an "offer" is said to be 'when one person signifies to another his willingness to do or 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’ or“an expression of willingness to contract on certain terms, made with the intention that it shall become binding as soon as it is accepted by the person whom it is addressed”, the “offeree” . Case of Carlill v Carbolic Smoke Ball Company illustrates this application. The cases is about Carbolic Smoke Ball (promisor) who offer 100 pound those who get influenza after using it product and Mrs Louisa Elizabeth Carlill (promisee) who accept the offer and get influenza. That case also showed that an offer could be made to more than 1 person and in fact the whole world. However an offer is not the same as an invitation to treat as seen in the case of Patridge v Caittenden which was an advertisement that was considered as only an invitation to treat, also in the case of Heathcote Ball v Barry which in this case was an auction that was found to be an invitation to treat only.
In this passage, the letters of offer issued by the Bank remained expressions of willingness on the part of the Bank banking facilities to the Company that accompanied by term and conditions, a proposal to be valid must accord with the terms and condition of the offer. It was also shown, that the Bank as the initial promisor must declare his readiness to undertake an obligation upon the banking facilities term. After the proposal had made, is up to the option of the Company (promisee) to accept or refuse. In the case the possible existence of an offer includes the offer by the bank on 11 August 2011 and another two months later also by the bank. These are said to be an offer based on the definition of an offer above, as the bank is willing to offer the facilities with the view of obtaining the assent of the company to the act. The offers are not an ‘invitation to treat’ and are directed toward the company only.
Whether there was a counter offer made by the Company to Bank is the next issue to be discussed. The law states that acceptance must be absolute and unqualified. This point is made clear in the case of Hyde v Wrench. According to the case, to constitute a valid contract Hyde must accept of the terms proposed but Hyde rejected the Wrench offer and made a counter proposal which terminated the original offer. A counter offer has the effect of an implied rejection of the original offer. If the offeree introduces new terms of the offer, the previous offer can be void by the offeree by making a counter offer and thus making the offeree unable to accept the previous offer again unless stated or allowed by the offeror.
In this passage, there was a request to amend facility I by the company, this was seen as an...