Podcast
Questions and Answers
Which of the following accurately describes express appointment in agency relationships?
Which of the following accurately describes express appointment in agency relationships?
- An agency relationship that arises through implied actions of the principal.
- A scenario where the agent acts without prior consent from the principal.
- An authorization given through written or spoken words by the principal. (correct)
- A form of ratification of unauthorized actions by the agent.
What characterizes implied appointment in an agency relationship?
What characterizes implied appointment in an agency relationship?
- It arises from actions or dealings that suggest authority. (correct)
- It allows an agent to exceed their authority without consequences.
- It requires signed documents to be valid.
- It is established only through court orders.
In the context of agency by ratification, what is the role of the principal?
In the context of agency by ratification, what is the role of the principal?
- The principal’s acceptance retroactively legitimizes the unauthorized act. (correct)
- The principal can choose to ignore acts completed by the agent.
- The principal must always approve unauthorized actions before they are binding.
- The principal has no involvement in the ratification of agent actions.
Which of the following is NOT a way to create an agency relationship?
Which of the following is NOT a way to create an agency relationship?
Which statement is a misconception regarding ratification in agency?
Which statement is a misconception regarding ratification in agency?
What would constitute an example of an implied appointment as an agent?
What would constitute an example of an implied appointment as an agent?
Which of the following is a critical effect of ratification according to Section 149?
Which of the following is a critical effect of ratification according to Section 149?
What aspect can lead to a misunderstanding of implied appointment?
What aspect can lead to a misunderstanding of implied appointment?
Which principle governs the validity of a contract when an agent exceeds their authority?
Which principle governs the validity of a contract when an agent exceeds their authority?
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Study Notes
Offer and Acceptance Dynamics
- Alfred's initial offer: 1000 boxes of tinplates at RM10 per box, valid for 72 hours starting Monday at 12:00 p.m.
- Bruno counters with RM9 per box, leading to rejection of Alfred's original offer.
- Bruno attempts to accept Alfred’s original offer after the counter, deemed invalid due to previous rejection.
Legal Principles of Contract Formation
- Section 2(b) of the Contract Act 1950 states acceptance must be unequivocal; a counter offer constitutes rejection of the original.
- Hyde vs Wrench (1849): A counter offer nullifies the original offer.
- Acceptance post-counter offer is ineffective; original offer cannot be revived once rejected.
Communication of Acceptance and the Postal Rule
- Acceptance is considered complete upon posting according to the Postal Rule; however, the timing is critical.
- Alfred’s offer expires on Thursday at 12:00 p.m. after 72 hours, invalidating any acceptance sent after that time.
- Bruno communicated acceptance on Wednesday at 2:00 p.m., but Alfred received it after the offer’s expiry.
Conclusion on Contract Validity
- No valid contract exists between Alfred and Bruno due to the timing of communication and rejection of the original offer.
- The acceptance lapses as it does not align with the defined timeframe, leading to termination of the offer.
Key Aspects of Enforceable Contracts
- Acceptance must be clear and unequivocal, demonstrating genuine intent.
- Acceptance can be expressed in writing, verbally, or through conduct if it shows intent to accept.
- Any interactions without clear acceptance lead to non-enforceable agreements, as exemplified by Sarah and Hafiza's case involving an invitation to treat.
Agency in Contractual Relationships
- Agency defined under the Contracts Act 1950 allows contracts to be bound by agents other than the original parties.
- Five creation methods of agency in Malaysian law:
- Express Appointment: Clear articulation of authority through spoken or written means (e.g., Power of Attorney).
- Implied Appointment: Authority inferred through actions or representations, such as business partnership roles.
- Ratification: Agency established retroactively when a principal accepts actions taken beyond an agent's authority.
- Section 149 states that ratified acts bind the principal as if authorized initially.
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