Contracts Act 1950: Acceptance Overview

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Questions and Answers

In the case of Williams v Cawardine, what was the main motivation for providing information?

  • To become a witness in the trial
  • Desire for financial reward
  • Seeking vengeance against the murderer
  • Ease her own conscience and hopes of forgiveness (correct)

What principle did Megaw J highlight in relation to the retrospective effect of contracts in Trollope & Colls Ltd v Atomic Power Constructions Ltd?

  • Contracts cannot be altered once signed
  • No contracts have legal effect until validated by a judge
  • All contracts must be executed in written form
  • The intention of the parties can allow retrospective effects (correct)

In Tinn v Hoffman, what was the primary issue surrounding the two offers that were crossed in the post?

  • Lack of consideration for both offers
  • Neither can be construed as an acceptance of the other (correct)
  • One offer was made under duress
  • One offer was a counter-offer

What does 'subject to contract' typically imply in negotiations?

<p>No terms have been agreed until a formal contract is signed (B)</p> Signup and view all the answers

How does informal communication impact the enforceability of agreements based on the content provided?

<p>Informal communications can create binding contracts under certain conditions (A)</p> Signup and view all the answers

What does the phrase 'subject to contract' typically indicate in a negotiation?

<p>Further documentation is required for enforceability (C)</p> Signup and view all the answers

In the case of Daiman Development Sdn Bhd v Mathew Lui Chin Tech & Anor, what was the main purpose of the construction?

<p>To determine the intent behind the parties' agreement (D)</p> Signup and view all the answers

What does the phrase 'without prejudice' imply in correspondence during negotiations?

<p>No legal obligations can arise from the communication (A)</p> Signup and view all the answers

In the case of Lim Chia Min v Cheah Sang Ngeow & Anor, what does 'proposed that a formal agreement would be prepared and executed' mean?

<p>A formal approach to the contract is required (C)</p> Signup and view all the answers

What was concluded in the case of Charles Grenier Sdn Bhd v Lau Wing Hong regarding the phrase 'subject to the sale and purchase agreement'?

<p>It implies parties have a clear mutual intention (C)</p> Signup and view all the answers

What is a common misconception regarding informal agreements during negotiations?

<p>They may create binding obligations despite lacking formalities (A)</p> Signup and view all the answers

What key factor does the interpretation of 'subject to contract' hinge upon?

<p>Clear communication of intent from the parties (B)</p> Signup and view all the answers

Why is the definition of acceptance critical in contract law?

<p>It establishes the binding nature of agreements (B)</p> Signup and view all the answers

What is indicated by the phrase 'subject to the sales and purchase agreement' in the context of contract law?

<p>It suggests an intention to finalize an already concluded agreement. (C)</p> Signup and view all the answers

Which of the following must occur for acceptance to be considered complete under the postal rule?

<p>The acceptance must be put in a course of transmission. (D)</p> Signup and view all the answers

In the case of Bhagwandas Goverdhanda Kedia v Girdharlal Parshottamadas and Co, what was established about acceptance?

<p>A contract is only completed when acceptance is received by the proposer. (C)</p> Signup and view all the answers

What must happen for an informal agreement to be enforceable under contract law?

<p>Both parties must express a clear intention to be bound. (C)</p> Signup and view all the answers

What does the term ‘non-refundable RM3,000 payment’ imply about the terms of the contract?

<p>It suggests that the payment secures the buyer's interest. (B)</p> Signup and view all the answers

How does the communication of acceptance differ in instantaneous communication compared to postal acceptance?

<p>Instantaneous acceptance is effective only when acknowledged. (C)</p> Signup and view all the answers

What is a key factor that affects the enforceability of a contract based on informal agreements?

<p>The clarity of terms and mutual consent. (D)</p> Signup and view all the answers

What happens if the respondents never signed the building approval plans regarding the contract negotiation?

<p>It poses challenges to the enforceability of the agreement. (B)</p> Signup and view all the answers

What is required for acceptance to convert a proposal into a promise?

<p>Acceptance must be absolute and unqualified. (A)</p> Signup and view all the answers

What does it imply if a proposer does not specify a method of acceptance?

<p>Acceptance can occur in any manner deemed reasonable. (B)</p> Signup and view all the answers

What is required for a proposal to be considered accepted under the Contracts Act 1950?

<p>The person must signify assent to the proposal. (A)</p> Signup and view all the answers

Under what condition is a postal acceptance deemed complete?

<p>Acceptance is complete as soon as it is posted. (B)</p> Signup and view all the answers

Which method of signaling acceptance is deemed valid under the Contracts Act 1950?

<p>Conduct of the offeree can demonstrate acceptance. (B)</p> Signup and view all the answers

In which circumstance would acceptance not be considered absolute and unqualified?

<p>Acceptance includes additional terms. (D)</p> Signup and view all the answers

When is the communication of acceptance considered complete?

<p>When the offeree performs the act indicating acceptance. (C)</p> Signup and view all the answers

What determines whether postal communication is a reasonable method for acceptance?

<p>Common practices and circumstances understood by the parties. (B)</p> Signup and view all the answers

In which scenario can silence be interpreted as acceptance?

<p>If the proposer clearly states silence means acceptance. (A)</p> Signup and view all the answers

What does Section 7(b) of the Contracts Act 1950 refer to in terms of acceptance?

<p>Acceptance must follow the manner prescribed by the proposer. (C)</p> Signup and view all the answers

What critical factor is evaluated in the case Lee Seng Heng & Ors v Guardian Assurance Co Ltd?

<p>Whether posting acceptance was not a reasonable method. (B)</p> Signup and view all the answers

How is intention determined in a contract when the acceptance method is not specified?

<p>Based on industry standards and usual practices. (D)</p> Signup and view all the answers

How does the case of Holwell Securities Ltd v Hughes inform the understanding of acceptance?

<p>It illustrates acceptance must follow stipulated notification processes. (C)</p> Signup and view all the answers

What is the significance of Section 4(2) of the Contracts Act concerning acceptance?

<p>It explains when acceptance can be considered legally binding. (D)</p> Signup and view all the answers

What does the term 'usual and reasonable manner' specifically imply in contract acceptance?

<p>Methods commonly accepted in everyday transactions. (C)</p> Signup and view all the answers

What common misconception about acceptance does case law challenge?

<p>Many think silence always implies acceptance. (D)</p> Signup and view all the answers

What is the significance of the offeror's belief in the acceptance of their message?

<p>It establishes estoppel if the acceptor believes the acceptance was received. (A)</p> Signup and view all the answers

Under what condition does a contract NOT exist despite the offeror's reasonable belief in acceptance?

<p>If the acceptor did not know of the offer. (D)</p> Signup and view all the answers

Which case suggests that knowledge of the offer is not a prerequisite for acceptance?

<p>Gibbons v Proctor (A)</p> Signup and view all the answers

What is the legal implication if the communication of a proposal is deemed complete?

<p>The person to whom the proposal is made must acknowledge it. (A)</p> Signup and view all the answers

What does Section 4 (1) imply about the timing of acceptance in relation to communication?

<p>Acceptance is effective upon the party's awareness of the proposal. (C)</p> Signup and view all the answers

What occurs when a party introduces a new term while purporting to accept an offer?

<p>A counter-offer is made. (C)</p> Signup and view all the answers

Which statement accurately describes the difference between a counter-offer and a request for information?

<p>A counter-offer involves a material variation of the terms. (B)</p> Signup and view all the answers

In the telegraphic exchange between D and P, what was P trying to determine?

<p>The latest possible delivery date. (B)</p> Signup and view all the answers

What did the act of returning a signed agreement with modifications in Brogden v Metropolitan Railway Co signify?

<p>A counter-offer was made. (B)</p> Signup and view all the answers

What is the significance of the phrase ‘approved’ at the end of the agreement in Brogden v Metropolitan Railway Co?

<p>It signifies an unconditional acceptance. (B)</p> Signup and view all the answers

What is usually implied if an offer is described as 'open till Monday'?

<p>Acceptance must be communicated before Monday. (A)</p> Signup and view all the answers

What concept is illustrated when the original offer is destroyed upon making a counter-offer?

<p>Revocation of the original offer. (A)</p> Signup and view all the answers

What was the key feature of the contract in Trollope & Colls Ltd v Atomic Power Constructions Ltd that allowed for retrospective application?

<p>Mutual agreement on retrospective terms. (A)</p> Signup and view all the answers

In the context of contract law, what does it mean to accept an offer?

<p>To agree fully with no alterations. (D)</p> Signup and view all the answers

In R v Clarke, what was the primary reason for Clarke providing information, despite not intending to be an informer?

<p>To clear himself from a prior false charge. (B)</p> Signup and view all the answers

What issue did Tinn v Hoffman highlight regarding acceptance in contract law?

<p>Identical offers cannot lead to acceptance when crossed. (D)</p> Signup and view all the answers

In Williams v Cawardine, which of the following best describes the nature of the reward offered?

<p>It aimed to alleviate personal guilt. (A)</p> Signup and view all the answers

What can be inferred about the implications of agreement on essential terms in the context of contract formation?

<p>They are critical for establishing a binding contract. (D)</p> Signup and view all the answers

What does the presence of the phrase 'subject to contract' signify in negotiations?

<p>There is a need for a further formal contract. (B)</p> Signup and view all the answers

In Kam Mah Theatre Sdn Bhd v Tan Lay Soon, what does 'subject to contract' establish?

<p>A strong presumption of needing a further formal contract. (D)</p> Signup and view all the answers

What does the case of Daiman Development Sdn Bhd v Mathew Lui Chin Tech & Anor focus on?

<p>Whether the intent to enter a contract is clear. (B)</p> Signup and view all the answers

What implication does 'without prejudice' have in correspondence?

<p>It serves to protect future legal rights. (D)</p> Signup and view all the answers

In the context of Lim Chia Min v Cheah Sang Ngeow & Anor, what is the meaning of 'proposed that a formal agreement would be prepared and executed'?

<p>The formal agreement is a mere formality. (B)</p> Signup and view all the answers

What was concluded in Charles Grenier Sdn Bhd v Lau Wing Hong regarding the phrase 'subject to the sale and purchase agreement'?

<p>A binding contract was formed without a formal agreement. (D)</p> Signup and view all the answers

What typically represents a common misconception regarding formal contracts?

<p>Informal agreements hold the same weight as formal contracts. (C)</p> Signup and view all the answers

What condition must be met for an informal agreement to be considered enforceable?

<p>There should be clear mutual intent to create a contract. (B)</p> Signup and view all the answers

A proposal becomes a promise when the person to whom it is made signifies his assent to it.

<p>True (A)</p> Signup and view all the answers

An acceptance can only be made through express communication and cannot occur through conduct.

<p>False (B)</p> Signup and view all the answers

Silence can always be interpreted as acceptance in contract law.

<p>False (B)</p> Signup and view all the answers

Acceptance is deemed complete when the acceptance is communicated to the offeror.

<p>True (A)</p> Signup and view all the answers

The acceptance of an offer must be absolute and can include changes to the original terms.

<p>False (B)</p> Signup and view all the answers

The method of acceptance specified by the proposer is mandatory and must be followed strictly.

<p>True (A)</p> Signup and view all the answers

Postal acceptance is considered complete when it is sent, regardless of when it is received.

<p>True (A)</p> Signup and view all the answers

The case of Brogden v Metropolitan Railway Co demonstrates that a signed agreement with modifications indicates full acceptance of the offer.

<p>False (B)</p> Signup and view all the answers

The acceptance of an offer is considered complete when it is sent, according to postal rules.

<p>True (A)</p> Signup and view all the answers

An acceptance can be considered absolute and unqualified if it includes a counter-offer.

<p>False (B)</p> Signup and view all the answers

It is unnecessary for a proposer to indicate a method of acceptance for the acceptance to be valid.

<p>True (A)</p> Signup and view all the answers

The postal acceptance rule only applies if the offeror is aware of the acceptance at the time it is communicated.

<p>False (B)</p> Signup and view all the answers

In the context of contract law, silence can never be interpreted as acceptance.

<p>False (B)</p> Signup and view all the answers

Communication by post is considered an unreasonable method of acceptance in business transactions.

<p>False (B)</p> Signup and view all the answers

Terms of the offer must remain unchanged for the acceptance to be valid under contract law.

<p>True (A)</p> Signup and view all the answers

A proposal can only be accepted if communicated directly to the offeror, excluding any third parties.

<p>False (B)</p> Signup and view all the answers

If the offeror does not receive the acceptance message through no fault of his own, a contract exists.

<p>False (B)</p> Signup and view all the answers

The knowledge of the offer is absolutely necessary for the acceptance to be valid.

<p>False (B)</p> Signup and view all the answers

In instances where the offerror does not know that the message was not received, he is estopped from claiming non-receipt.

<p>True (A)</p> Signup and view all the answers

Section 4(1) states that communication of the proposal is complete when it is acknowledged by the recipient.

<p>False (B)</p> Signup and view all the answers

Gibbons v Proctor suggests that knowledge of the offer is necessary for acceptance.

<p>False (B)</p> Signup and view all the answers

Acceptance communicated via telegram is not governed by the postal rule.

<p>True (A)</p> Signup and view all the answers

A contract is deemed complete once the letter of acceptance is posted, regardless of whether it reaches the proposer.

<p>False (B)</p> Signup and view all the answers

If the parties agreed that communication would be conducted by post, then posted letters complete the acceptance as long as they are sent before the deadline.

<p>True (A)</p> Signup and view all the answers

Section 4(2)(a) of the Contracts Act 1950 states that acceptance against the acceptor is complete once the acceptance is sent.

<p>False (B)</p> Signup and view all the answers

The absence of a signed sales and purchase agreement automatically nullifies any prior verbal agreement between the parties.

<p>False (B)</p> Signup and view all the answers

In Bhagwandas Goverdhanda Kedia v Girdharlal Parshottamadas and Co, it was established that acceptance must be received by the offeror for the contract to be completed.

<p>True (A)</p> Signup and view all the answers

Lord Denning emphasized that the communication of an acceptance affects the parties' intent to form a contract.

<p>True (A)</p> Signup and view all the answers

The phrase ‘subject to contract’ in negotiations signifies a clear intent to form an immediate legally binding agreement.

<p>False (B)</p> Signup and view all the answers

In Williams v Cawardine, the motivation for providing information was solely to gain a monetary reward.

<p>False (B)</p> Signup and view all the answers

Trollope & Colls Ltd v Atomic Power Constructions Ltd established that contracts cannot retroactively apply under any circumstances.

<p>False (B)</p> Signup and view all the answers

In Tinn v Hoffman, both parties' offers were deemed valid acceptances due to the crossing of their communications.

<p>False (B)</p> Signup and view all the answers

R v Clarke involved a person who intended to be an informer while providing information about a murder.

<p>False (B)</p> Signup and view all the answers

Megaw J's ruling in Trollope & Colls Ltd v Atomic Power Constructions Ltd indicated that a lack of formal acceptance implies no contract exists.

<p>False (B)</p> Signup and view all the answers

A counter-offer is a mere enquiry about the terms of the original offer.

<p>False (B)</p> Signup and view all the answers

In the case of Brogden v Metropolitan Railway Co, signing a modified agreement signifies an absolute acceptance of the original offer.

<p>False (B)</p> Signup and view all the answers

If one party introduces a new term while claiming to accept an offer, it results in the acceptance of the original offer being invalid.

<p>True (A)</p> Signup and view all the answers

The phrase 'open till Monday' implies that the offer can be accepted at any time before that date without limitations.

<p>False (B)</p> Signup and view all the answers

In contract law, a request for more information is legally equivalent to making a counter-offer.

<p>False (B)</p> Signup and view all the answers

When P asked D to clarify the acceptance terms in telegraphic communication, it was considered a counter-offer.

<p>False (B)</p> Signup and view all the answers

The term 'subject to contract' means that the parties have reached a complete agreement.

<p>False (B)</p> Signup and view all the answers

In contract law, the introduction of a new term by one party alters the original offer and negates the possibility of its acceptance.

<p>True (A)</p> Signup and view all the answers

Flashcards

Williams v Cawardine

A legal case where a reward was offered for information leading to the discovery of a murderer. The court considered if the claimant's motivation for providing that information affected their right to the reward.

R v Clarke

A legal case where a reward was offered for information about murders. In this case, the person providing information did so to clear themselves from a false charge, not for the reward.

Trollope & Colls Ltd v Atomic Power Constructions Ltd

A legal case about implied terms in contracts. The court discussed whether a contract could have retrospective application if the parties intended it.

No valid acceptance

A situation in contract law where one party's offer is not properly accepted by another party.

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Tinn v Hoffman

A legal case illustrating that two identical offers mailed at the same time, with neither party knowing of the others offer, do not constitute a contract.

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Non-refundable deposit

A payment made in advance that cannot be recovered, even if the agreement falls through.

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Acceptance 'subject to contract'

Indicates no contract until a formal document is signed; or, a binding contract exists, but the document's signing is a formality.

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Sales and purchase agreement

A formal contract outlining the terms of a property sale.

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'Subject to contract' presumption

A strong assumption that a formal contract is needed, unless proven otherwise.

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Postal Rule

Acceptance of an offer is effective when the acceptance letter is posted, not when received.

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Daiman Development v Mathew Lui Chin

Case highlighting that the parties' intention to be bound (or not) is crucial, even with a seemingly complete agreement.

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Kam Mah Theatre v Tan Lay Soon

Case showing a strong presumption that 'subject to contract' requires a future, formal contract.

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Instantaneous Communication

Acceptance of an offer is complete when the offeror receives it.

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Lim Chia Min v Cheah Sang Ngeow

Case illustrating that 'proposed formal agreement' means precisely that.

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Contract Formation (Essentials)

A contract requires an offer, acceptance, and consideration for it to be valid.

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Charles Grenier v Lau Wing Hong

Case demonstrating that "subject to sale and purchase agreement" does not necessarily mean no contract until its execution, if the parties, property, and essential terms are identified.

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Acceptance Timing

Acceptance needs to be communicated to be effective. How that communication occurs (phone, mail) dictates the rule for timing.

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Agreement 'without prejudice'

Used to avoid a formal contract existing, while still making a deal.

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Property sale instalment

A property sale where payments are made over a period.

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Acceptance (Contract Law)

Agreement to the terms of an offer, creating a legally binding contract.

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Absolute and Unqualified Acceptance

An acceptance that mirrors the offer precisely; no variations or conditions.

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Counter-offer

A response to an offer that introduces new terms, effectively rejecting the original offer.

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Usual and Reasonable Manner

The method of acceptance, when not specified by the offeror, should be sensible and customary.

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Postal Rule

Acceptance is effective when posted, not when received, if it's reasonable to use mail.

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Instantaneous Communication

Acceptance is effective when received by the offeror, for methods like phone calls or email.

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Acceptance (S.2(b))

A proposal becomes an acceptance when the person receiving it signifies their agreement.

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Acceptance Communication Methods

Acceptance can be communicated through actions or omissions, with the intention to accept being crucial.

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Express Acceptance

Acceptance stated explicitly: using words or written communication.

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Implied Acceptance

Acceptance shown through actions, rather than words.

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Acceptance Manner

Acceptance must be in the form specified, if provided by the offerer.

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Acceptance by Conduct (S.8)

Acceptance achieved not by direct communication (words), but inferred from an individual's conduct.

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Acceptance by an Omission

Acceptance demonstrated by failing to reject the offer; silence does not always suffice.

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Communication of Acceptance (Complete)

Acceptance is complete at the time the offeree communicates their agreement to the offeror; the method used for communication determines the time of completion.

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Counter-Offer

A response to an offer that introduces new terms, thus destroying the original offer.

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Request for Information

An inquiry about an offer that does not change the terms. It doesn't destroy the original offer.

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Acceptance 'subject to contract'

An acceptance that shows no contract exists until a formal contract is signed.

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Offer

A clear, definite proposal to enter into a contract expressing a willingness to be bound by specific terms.

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Acceptance

A clear, unconditional agreement to all the terms of an offer.

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Acceptance 'subject to contract'

Indicates a contract isn't complete until a formal document is signed; this could mean a binding contract already exists, with signing a formality.

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Williams v Cawardine

A legal case about reward for information, considering if the motivation behind giving information affects the right to a reward.

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R v Clarke

A case where a reward for information was offered, but the informer acted to clear themselves of false charges, not for the reward itself.

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'Subject to contract' presumption

A strong belief that a formal agreement will follow an initial agreement, unless it's proven otherwise.

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Daiman Development v Mathew Lui Chin

Legal case highlighting the importance of the parties' intent to be legally bound. A complete agreement doesn't automatically create a contract unless both sides want to be legally committed.

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Trollope & Colls Ltd v Atomic Power Constructions Ltd

A case about implied terms in contracts, discussing if a contract can have a retrospective effect if parties intended it.

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Kam Mah Theatre v Tan Lay Soon

A legal case that demonstrates the strong presumption that "subject to contract" signals the need for a formal contract.

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No valid acceptance (Tinn v Hoffman)

Case showing two identical offers sent simultaneously do not constitute a contract if neither party knows of the other's offer.

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Retrospective contract effect

A contract that applies to actions from a past date; legally possible if both parties intended it.

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Lim Chia Min v Cheah Sang Ngeow

A legal case illustrating the precise interpretation of a phrase like "proposed formal agreement."

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Charles Grenier v Lau Wing Hong

A case showing there might be a binding agreement even with a phrase like "subject to sale and purchase agreement".

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Property sale instalment

Property purchase with payments spread over a period.

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Acceptance of Offer

Agreement to the terms of an offer, creating a legally binding contract.

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Knowledge of Offer (Acceptance)

The recipient of an offer must know about it to accept it legally.

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Communication of Acceptance

The act of conveying agreement to an offer, to the offeror.

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Postal Rule

Acceptance is effective when sent (post); not when received.

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Instantaneous Communication

Acceptance is complete when it arrives at the offer's recipient.

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No Contract if Sender Doesn't Know Offer Reached

If offeror doesn't know the message was received, there is no contract.

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Offeror Estopped

If the offeror claims not to have received the acceptance, but the receiver reasonably thought it was received, they won't be allowed to claim otherwise.

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Cross Offers

Simultaneous offers that are equal and identical (but by different people) do not automatically form a contract.

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Acceptance (S.2(b))

A proposal becomes an acceptance when the person receiving it signifies their agreement.

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Acceptance Communication Methods

Acceptance can be communicated through actions or omissions, with the intention to accept being crucial.

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Express Acceptance

Acceptance stated explicitly: using words or written communication.

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Implied Acceptance

Acceptance shown through actions, rather than words.

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Acceptance Manner

Acceptance must be in the form specified, if provided by the offeror.

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Acceptance by Conduct (S.8)

Acceptance achieved not by direct communication (words), but inferred from an individual's conduct.

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Acceptance by an Omission

Acceptance demonstrated by failing to reject the offer; silence does not always suffice.

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Communication of Acceptance (Complete)

Acceptance is complete at the time the offeree communicates their agreement to the offeror; the method used for communication determines the time of completion.

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Absolute and Unqualified Acceptance

An acceptance that mirrors the offer precisely, with no variations or conditions.

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Counter-offer

A response to an offer that introduces new terms, effectively rejecting the original offer.

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Usual and Reasonable Manner

The method of acceptance, when not specified by the offeror, should be sensible and customary.

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Postal Rule

Acceptance is effective when posted, not when received, if it's reasonable to use mail.

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Instantaneous Communication

Acceptance is effective when received by the offeror, for methods like phone calls or email.

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Acceptance 'subject to contract'

Indicates no contract exists until a formal document is signed; a binding contract might already exist, but signing the document is a formality.

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Counter-offer

A response to an offer that introduces new terms, effectively rejecting the original offer.

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Request for Information

An inquiry about an offer that does not change the terms; it doesn't destroy the original offer.

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Acceptance 'subject to contract'

An acceptance that shows no contract exists until a formal contract is signed; this could mean a binding contract already exists, with signing a formality.

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'Subject to contract' presumption

A strong belief that a formal agreement will follow an initial agreement, unless it's proven otherwise.

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Acceptance

A clear, unconditional agreement to all the terms of an offer.

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Offer

A clear, definite proposal to enter into a contract expressing a willingness to be bound by specific terms.

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Acceptance (Contract Law)

The agreement to the terms of an offer that creates a legally binding contract.

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Non-refundable deposit

A payment made upfront that cannot be returned, even if the agreement is cancelled.

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Postal Rule

Acceptance of an offer is effective when the acceptance letter is posted, not when received, if agreed upon.

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Instantaneous Communication

Acceptance of an offer is effective when the offeror receives the acceptance. (e.g. phone, email).

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Subject to contract

An agreement that shows no contract exists until a formal contract is signed. (A binding agreement might already exist but the formal contract is pending.)

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Communication of Acceptance

The process of letting the offeror know you agree to the offer.

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Sales and Purchase Agreement

A detailed and formal contract documenting the terms of a property sale or purchase.

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Acceptance (Contract Law)

Unconditional agreement to an offer's terms, forming a legally binding contract.

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Counter-offer

A response to an offer that changes the terms, destroying the original offer.

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Acceptance Timing

Acceptance's effectiveness is determined by the method of communication. Different rules apply for different methods.

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Williams v Cawardine

A legal case where a reward's recipient's motivation (e.g., conscience) was questioned for acceptance.

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R v Clarke

A legal case where reward for information was not the motivation for providing it; different motive influenced the outcome.

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Trollope & Colls v Atomic Power

Case about implied terms; a contract could have a retrospective effect if the parties intended it.

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No valid acceptance (Tinn v Hoffman)

Two identical offers, sent simultaneously but unknown to each other, do not constitute a contract.

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Cross Offers

Identical offers sent by different people without knowledge of each other's offers do not form a contract.

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Retrospective contract effect

A contract applying to actions from a past date; legally possible if both parties intended it.

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Knowledge of Offer (Acceptance)

The recipient of an offer must be aware of the offer to accept it legally.

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Communication of Acceptance

The act of conveying agreement to an offerer, and the method shapes the completion of the acceptance process.

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Acceptance (S.2(b))

A proposal becomes an acceptance when the recipient signifies their agreement.

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Postal Rule

Acceptance is effective when sent (by mail); not when received.

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Instantaneous Communication

Acceptance is complete when received by the offerer.

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No Contract if Sender Doesn't Know Offer Reached

If the offeror is unaware that the message was received, there's no contract.

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Offeror Estopped

If the offeror claims not to have received the acceptance, but the receiver reasonably thought it was received, they can't claim otherwise.

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Cross Offers

Simultaneous, identical offers (by different parties) do not automatically form a contract.

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Acceptance Communication Methods

Acceptance can be communicated via actions, omissions, and intentions to accept are crucial.

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Express Acceptance

Acceptance stated explicitly: using words or written communication.

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Implied Acceptance

Acceptance shown through actions, rather than words.

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Acceptance Manner

Acceptance must be in the form specified by the offeror, if provided.

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Acceptance by Conduct (S.8)

Acceptance inferred from conduct, not by direct communication (words).

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Acceptance by an Omission

Acceptance shown by failing to reject the offer; silence isn't always sufficient.

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Communication of Acceptance (Complete)

Acceptance is complete when the offeree communicates their agreement to the offeror; method matters.

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Study Notes

Acceptance

  • Acceptance is a crucial element in contract formation.
  • Section 2(b) of the Contracts Act 1950 defines acceptance as the offeree signifying assent to the offer.
  • This transforms a proposal into a promise.
  • Section 3 of the Contracts Act 1950 defines how acceptance is communicated. This can be by act or omission.

How is acceptance communicated?

  • Acceptance can be communicated via an act.
  • This includes spoken words, letters, or telephonic communication.
  • The presentation of an act can be the fulfillment of conditions of an offer.
  • Acceptance can be communicated by omission.
  • Acceptance can be implied under specific circumstances

Conditions of Acceptance

  • Section 7 of the Contracts Act 1950 outlines conditions for valid acceptance.
  • Acceptance must be absolute and unqualified.
  • The manner in which acceptance is communicated must be reasonable and usual.

When is Acceptance Complete?

  • A communicated acceptance is essential to create a binding contract.
  • Postal Rule: Acceptance is complete when the letter is posted.
  • Instantaneous Communication (e.g., telephone): Acceptance is complete upon receipt by the offeror.

Miscellaneous Issues

  • Knowledge of offer is needed for valid acceptance.
  • Cases regarding acceptance and offer knowledge vary.
  • Malaysia legal system does not have a uniform approach on this.
  • The motive of the acceptor is not significant in determining if valid acceptance was present.
  • Some acceptances can be made retroactively, though this can be complex in the way courts view it.
  • In a scenario with two crossed offers, there is no contract. This is the case if both sides were unaware of the offer/counter offer.

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