Question 1

Eric lost his pet dog, Lucky. Eric placed an advertisement in the newspaper offering a reward
of RM 2,000 to anyone who finds and returns Lucky to Eric by 1pm on Friday 6 th June 2018.
Alan read the advertisement in the newspaper about Lucky. While walking Alan found Lucky
and returned the dog to Eric on 4 th June. However, Eric told Alan that he actually gave up
finding lucky and has already bought a new dog. Eric refused to accept Lucky and pay Alan
the reward of RM 2,000. Advise Alan whether he can claim the reward.

ANSWER:
In Malaysia, the law of contract is governed by the Contract Act, 1950, which is an
agreement enforceable by the law. The agreement is involved of two or more person in the
cases. The contract also is having intention to create legal relationship. The effect is that the
parties in the contract can enforce the contract, which means that if in the event when one of
the parties breaches the contract the other party can bring the case to the court of law.

The issue in this case is whether Alan is entitled to claim the reward of RM 2,000 from
Eric for returning the dog ? Or whether Alan is bound to claim the reward of RM 2,000 from
Eric who refuse to accept the returning of dog. In order to decide whether Alan is entitled to
claim the reward of RM 2,000 from Eric for returning the dog, it is important to examine the
legal position of the act of advertising in the newspaper.

The rule regarding to advertising in the newspaper - whether it is an offer or invitation to

treat(ITT).

 Offer
An offer is made when one party indicates his willingness to enter into a contract in the
terms set out in the offer.

(i) Carlil v. Carbolic Smokes Ball Co. Ltd

In this case, an advert was placed for ‘smoke ball’ to prevent influenza and it offered to
pay ₤100 if anyone contracted influenza after using the ball. The company deposited ₤1000
with the Alliance Bank to show their sincerity in the matter. The Plaintiff bought one of the
balls but contracted influenza. It was held that the existence of clear precise conditions
 forms an offer. The deposit of money showed an intention to be bound, therefore an advert
was offer. The buying and using of the smoke ball is amounted as acceptance.

 Invitation To Treat (ITT)

An invitation to treat is an invitation to others to make offers. It is not an offer that is
capable of being turned into a contract upon acceptance.

(i) Partridge v. Crittenden

In this case, the appellant had inserted an advertisement to sell protected birds under the
general heading of Classified Advertisements and the words ‘offer for sale’ were not
used. He was charged with unlawfully offering for sale of wild live bird contrary to the
provisions of the Protection of Birds Act 1954, and he was convicted. However the court
quashed the conviction. The court held that a classified advertisement in a magazine or
newspaper did not amount to an offer to contract. There is no sufficient amount to
contract.

(ii) Coelho v. The Public Services Commission

The applicant had applied for a position in response to a newspaper advertisement and the
application had been accepted. Subsequently, the Public Service Commission attempted
to terminate his employment on the basis that he was appointed on probation. The High
Court ruled that advertisement was an invitation to qualified persons to apply and the
resulting applications were offers. The letter to the particular applicant was in fact an
unqualified acceptance and thus there was no question of his appointment being on
probation. Therefore the purported termination applicable to officers on probation was
invalid.

Based on the above mentioned cases, the advertisement Eric placed was in the newspaper
offering a reward of RM 2,000 to anyone who finds and returns Lucky to Eric by 1pm on
Friday 6th June 2018 therefore constituted an offer and not an invitation to treat. An offer will
come to the end at the lapse of time specified in the offer or at the end of a reasonable time if
no time is specified. However, Alan found and returned the dog back to him two days before
the due date. Hence, an offer can be accepted by Alan.
Therefore, Alan can claim the reward of RM 2,000 from Eric for returning the dog. Eric do
not has a right to bound the offer as the offer has not come to the end .

Question 2
Julie made an offer to Hino on the 15/2/2019 to sell his collection of stamps at RM 500. Hino
however is of the opinion that the price offered is too expensive and have requested for a
reduction of RM 200. Julie is not agreeable to the newly proposed price. Advise Hino if he
can insist on accepting the original offer of the stamps at RM 500. Support your answer and
explanation with the support of relevant cases.

ANSWER:
In this case, it is involved in the topic of acceptance of law in Malaysia. Acceptance is final
and unqualified expression of assent to the terms of an offer. Acceptance must be absolute
and unqualified in terms of offer in s.7(a) of CA 1950, which in order to convert a proposal
into a promise the acceptance must be absolute and unqualified. The rule is that any
acceptance which is qualified by the introduction of new term may be considered as a
counter-offer and the effect of a counter-offer is treated as a rejection of the original proposal.
Besides that, acceptance also must be expressed in some usual and reasonable manner unless
the proposal prescribes the manner in which it is to be accepted in s.7 (b) of CA 1950. When
the acceptor deviates from the prescribed form the offeror must not keep silent. If he does not
so and fails to insist upon the prescribed manner, he is considered as having accepted the
acceptance in the modified manner.

The issue in this case is whether Hino is entitled to buy the stamps at RM300 as he requested
for a reduction of price? Or whether Hino is bound to pay the real price of the stamps at
RM500? In order to decide whether Hino is entitled to buy the stamps at RM300 after
reduction, it is important to examine the legal position of requesting for reduction in price of
the stamps. Then it will determine when the contract is concluded.

The rule regarding to request for the reduction in price of the stamps, whether it is an counter
offer or acceptance.
 Counter offer
 If an offer is rejected is ceases to exist. If offerees then change their minds and try to
accept, they will in contractual terms be making a new offer.

(i) Case: Hyde v. Wrench (1840)

W offered to sell his farm for ₤1,000. H offered to pay ₤950 instead. W, after thinking about
it for a few days, rejected H’s offer. H then tried to accept W’s initial offer of ₤1,000. W
refused to sell the farm to H and H sued. The courts held that H could not enforce the
acceptance and agreement as his counter-offer of ₤950 was an implied rejection of the
original offer to sell at ₤1,000.

 Acceptance
It is a final and unqualified expression of assent to the terms of an offer.

(i) Case: Stevenson Jaques & Co.v. Mc Lean (1880)

On Saturday, the Defendant offered to sell iron to the Plaintiff at 40 shillings a ton, it was
open until Monday. But on Monday at 9.42sm, the Plaintiff sent a telegram asking if he could
have credit terms. After receiving it, the defendant sold the iron to another purchaser and at
1.25 pm sent a telegram to Plaintiff informing them about the sale. At 1.34 pm, the Plaintiff
sent a telegram accepting the Defendant’s original offer. Plaintiff claimed that the last
telegram was an acceptance of the Defendant’s offer. At last, the court agreed with the
Plaintiff’s claim and held that the Plaintiff’s first telegram was not counter-offer but only an
enquiry, so a binding contract was made by the Plaintiff’s second telegram.

Based on the above mention cases, the request for a reduction of RM 200 was not a counter
offer but only an enquiry. He did not reject the original offer of the stamps at RM500. Julie
who made the offer rejected the newly proposed price and insist upon the original offer of the
stamps at RM 500.

Therefore, Hino can insist to buy the stamps at RM500 as he just requested for the reduction
in price of RM200 but not rejected the original offer.
Reference:
1) Textbook – Chapter 1: Offer
2) Textbook – Chapter 2: Acceptance
3) Textbook – Chapter 1 & 2: Counter offer