Formation of a Contract

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Questions and Answers

What distinguishes an express promise from an implied promise in contract law?

  • An express promise requires written documentation while an implied promise does not.
  • An express promise is formed verbally while an implied promise is silence.
  • An express promise is valid unless contradicted, while an implied promise cannot be valid.
  • An express promise is made in words while an implied promise is made otherwise than in words. (correct)

According to the Contracts Act, how is the communication of a proposal completed?

  • When it comes to the knowledge of the person to whom it is made. (correct)
  • When it is sent via postal service.
  • When the offeror receives a response.
  • When it is acknowledged by the offeree.

What can render an offer invalid in contract negotiations?

  • When the offer is made via an advertisement.
  • When the context of the conversation changes.
  • When the offer is expressed in vague terms. (correct)
  • When the offer is made without preliminary discussions.

Which of the following is an example of an invitation to treat?

<p>A display of goods in a store. (D)</p> Signup and view all the answers

Which statement best reflects the relationship between an offer and acceptance?

<p>Acceptance must be unconditional for a promise to be formed. (B)</p> Signup and view all the answers

Which case highlights the distinction between an offer and an invitation to treat?

<p>Fisher v Bell (D)</p> Signup and view all the answers

What must be established for a valid contract to exist after an offer is accepted?

<p>All parties must be legally competent. (B)</p> Signup and view all the answers

What does it mean for a proposal to be communicated according to S.3 of the Contracts Act?

<p>Any act or omission by the proposing party intending to communicate counts. (C)</p> Signup and view all the answers

What is the legal classification of the advertisement for the Carbolic Smoke Ball Company?

<p>Unilateral contract (D)</p> Signup and view all the answers

Which case established that advertisements usually represent an invitation to treat (ITT)?

<p>Partridge v Crittenden (C)</p> Signup and view all the answers

In the context of the pharmaceutical case, when is an offer considered to be made?

<p>When the cashier processes the payment (B)</p> Signup and view all the answers

What essential factor indicated the intention to be bound in the Carbolic Smoke Ball advertisement?

<p>The deposit of £1000 with a bank (A)</p> Signup and view all the answers

Which of the following statements about 'flick knives' is accurate based on legal implications?

<p>They must meet specific regulatory criteria to be sold. (D)</p> Signup and view all the answers

In Preston Corp Sdn Bhd v Edward Leong, how was the contract formed between the printing company and the publisher?

<p>Through the exchange of letters and quotations (C)</p> Signup and view all the answers

What is required for an offer to be legally revoked?

<p>Lapse of time without acceptance (D)</p> Signup and view all the answers

Which aspect is critical to determine whether an advertisement constitutes an offer or an invitation to treat?

<p>The wording and context of the advertisement (A)</p> Signup and view all the answers

In the context of revocation, which of the following scenarios does NOT fulfill the criteria for revocation?

<p>A third party communicates the revocation (A)</p> Signup and view all the answers

What is an important legal implication regarding the sale of 'controlled items' like medication in pharmacies?

<p>Their sale is regulated and must follow specific procedures for legality. (D)</p> Signup and view all the answers

Which statement reflects the legal concept of an Invitation to Treat (ITT)?

<p>An ITT invites other parties to make an offer. (D)</p> Signup and view all the answers

What is considered a reasonable time for revocation when no specific time is prescribed?

<p>Depends on the nature of the proposal (A)</p> Signup and view all the answers

In the case of Dickinson v Dodds, what was the consequence of the third party's involvement?

<p>The acceptance from P was deemed null. (D)</p> Signup and view all the answers

What role does a condition precedent play in the acceptance of an offer?

<p>It can nullify the acceptance if not fulfilled. (B)</p> Signup and view all the answers

According to the Contracts Act 1950, how can an offer be revoked effectively?

<p>By a formal written notice directly to the other party (B)</p> Signup and view all the answers

How does the death or mental incapacity of the proposer affect the offer?

<p>It automatically cancels the offer upon the offeree's knowledge. (B)</p> Signup and view all the answers

A contract requires all five elements: offer, acceptance, consideration, intention to create legal relations, and capacity.

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

Consideration is deemed unnecessary if a contract is in written form.

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

An offer is made only when a quotation is issued.

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

An invitation to treat cannot lead to a binding contract until a formal acceptance occurs.

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

Witnesses and signatures are mandatory for a normal business contract to be valid.

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

An express promise in a contract is made only in writing.

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

An invitation to treat is a legally binding offer.

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

If a proposal is communicated to an offeree, the communication is complete even if the offeree has not yet acknowledged it.

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

A vague offer, such as promising to build a suitable building, can be considered valid.

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

The display of goods in a shop window is considered an offer.

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

In Preston Corp Sdn Bhd v Edward Leong, the terms of an offer must be impliedly indicated to form a binding contract.

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

An invitation to treat can lead directly to the formation of a contract.

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

A promise is formed as soon as an offer is made, regardless of acceptance.

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

An offer must be communicated, clear in meaning, and signify a willingness to enter a legal contract.

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

Quotations are always considered legally binding offers.

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

For an offer to exist, it must comply with the legal requirements set forth in relevant laws.

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

An offer can only be made explicitly and cannot be implied.

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

A non-existent offer can still be accepted under contract law.

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

The statement 'All prices quoted are at Nett, and subject to final confirmation upon receipt of your order' represents a binding offer.

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

The case of Affin Credit (Malaysia) Sdn Bhd v Yap Yuen Fui illustrates that fulfilling conditions precedent is necessary for a valid offer.

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

An offer made in a letter does not need to be communicated to the offeree to be valid.

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

A flick knife is defined as a knife that opens automatically by hand pressure from a button, spring, or other device attached to the handle.

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

In the case of Partridge v Crittenden, advertisements are always considered offers.

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

The Carbolic Smoke Ball advertisement was deemed a unilateral contract because it was made to the whole world.

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

The act of placing items in a wire basket in a pharmacy constitutes an official offer to purchase those items.

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

Mrs. Carlill's acceptance of the Carbolic Smoke Ball advertisement was valid because the company had deposited money in a bank as a sign of sincerity.

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

Revocation of an offer does not require a specific method or adherence to regulations.

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

A person selling or offering for sale a controlled item, such as medication, must comply with specific legal provisions.

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

Intention to be bound in a contract can only be determined through written agreements.

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

A proposal can be revoked only by the proposer communicating a notice of revocation directly to the other party.

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

In the case of Dickinson v Dodds, the plaintiff was able to accept the offer even after being informed that the house had been sold to a third party.

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

A proposal may be revoked after the communication of acceptance is complete.

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

A reasonable time for acceptance is predetermined by the proposer in every case.

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

The death of the proposer automatically invalidates the proposal regardless of whether the acceptor is informed.

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

A proposal is revoked if the condition precedent to acceptance is not fulfilled by the acceptor.

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

Communication of revocation can take place through an intermediary as long as the message is relayed.

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

Once a proposal is made, it remains valid indefinitely until accepted.

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

An offer can still be accepted after the death of the proposer if the acceptor is unaware of the death.

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

An obligation in a contract can be conditionally bound on an event that is excused if the event does not occur.

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

Death generally operates as a revocation of an offer in all cases.

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

If conditions precedent to acceptance are not met, the offer is irrevocably accepted.

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

A proposer’s mental disorder can excuse the acceptor from proceeding with acceptance if the disorder is known prior to acceptance.

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

In the case of Aberfoyle Plantations Ltd v Khaw Bian Cheng, the buyer is required to pay the remaining price regardless of lease renewal.

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

Section 38(2) of the Contracts Act specifies that promises bind the representatives of the promisors only if explicitly stated in the contract.

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

The principle of general application states that if a contract obligation is conditional, it binds both parties to perform regardless of the event's occurrence.

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

What happens when an offer is accepted under contract law?

<p>A legally binding contract may be formed. (C)</p> Signup and view all the answers

How is an offer distinguished from an invitation to treat?

<p>Only an offer can lead to a legally binding agreement. (D)</p> Signup and view all the answers

What must an offer indicate according to contract law?

<p>A willingness to become bound upon acceptance (C)</p> Signup and view all the answers

What is needed for communication of a proposal to be considered complete?

<p>The proposal must be communicated to the relevant party. (D)</p> Signup and view all the answers

Which of the following is NOT a valid requirement for an offer?

<p>Must contain specific legal terminology (D)</p> Signup and view all the answers

What legal concept does a 'display of goods' in a store represent?

<p>An invitation for customers to make an offer. (C)</p> Signup and view all the answers

In the case of quotations, what was concluded about their nature?

<p>They do not represent an intention to create legal obligations (D)</p> Signup and view all the answers

Which of the following characterized the case of Ahmad Meah & Anor v Nacodah Merican?

<p>The promise to build must be clear to avoid uncertainty. (D)</p> Signup and view all the answers

Which statement regarding communication of proposals in the context of contract law is accurate?

<p>A proposal communicated through acts or omissions is valid. (D)</p> Signup and view all the answers

What does the term 'clear in meaning' imply for an offer?

<p>The offer must be specific enough to be understood without ambiguity (A)</p> Signup and view all the answers

According to contract law, what makes an offer legally binding?

<p>The offer includes terms that imply acceptance. (B)</p> Signup and view all the answers

In Affin Credit (Malaysia) Sdn Bhd v Yap Yuen Fui, what was necessary for a valid offer?

<p>Fulfilling conditions precedent outlined in legislation (D)</p> Signup and view all the answers

Which scenario illustrates a clear distinction between a promise and an invitation to treat?

<p>A seller stating ‘I am willing to sell my car for $5,000’. (C)</p> Signup and view all the answers

What is the consequence if an offer does not comply with legal requirements?

<p>It is considered non-existent and cannot be accepted (A)</p> Signup and view all the answers

Which of the following best defines the nature of a quotation?

<p>An indication of the price which can lead to an offer (A)</p> Signup and view all the answers

How is an implied offer characterized in contract law?

<p>It occurs through actions that suggest intent to contract (B)</p> Signup and view all the answers

What is a crucial factor in determining whether an advertisement represents an offer rather than an invitation to treat?

<p>The wording of the advertisement (D)</p> Signup and view all the answers

In the context of the Carbolic Smoke Ball advertisement, what element demonstrates the company's intention to be bound?

<p>A deposit of £1000 at the bank (C)</p> Signup and view all the answers

Which scenario exemplifies an invitation to treat instead of a binding offer?

<p>A store's display of a limited-time sale (C)</p> Signup and view all the answers

How was the contract formed in the case of Preston Corp Sdn Bhd v Edward Leong?

<p>By the exchange of letters and printing orders (C)</p> Signup and view all the answers

What legal implication is highlighted regarding the sale of flick knives?

<p>Selling flick knives requires a special license. (B)</p> Signup and view all the answers

What conclusion can be drawn from the Carbolic Smoke Ball case regarding unilateral contracts?

<p>They are binding once the offer is advertised and utilized. (A)</p> Signup and view all the answers

In the context of the law, which aspect of an advertisement could indicate it is indeed an offer?

<p>It outlines specific prices for items. (A)</p> Signup and view all the answers

What are the essential components required for a legally binding contract?

<p>Offer, Acceptance, Consideration, Intention, Capacity (B)</p> Signup and view all the answers

What does the case of Carlill v Carbolic Smoke Ball illustrate about the nature of acceptance in unilateral offers?

<p>Performance of the conditions serves as acceptance. (A)</p> Signup and view all the answers

Which statement best describes the nature of consideration in a contract?

<p>Consideration is essential except in specific situations as defined by law. (A)</p> Signup and view all the answers

Under the Contracts Act 1950, how is an offer defined?

<p>A communication expressing a willingness to enter into a contract subject to conditions. (C)</p> Signup and view all the answers

What critical element must be present for a contract to be deemed valid?

<p>Consideration or exceptions to it (A)</p> Signup and view all the answers

In the case of Preston Corp Sdn Bhd v Edward Leong, at which stage was an offer made?

<p>When quotations were submitted by R (D)</p> Signup and view all the answers

Which of the following is NOT a requirement for a normal business contract?

<p>Witnesses (D)</p> Signup and view all the answers

What does an invitation to treat signify in contract law?

<p>It indicates a willingness to negotiate terms. (B)</p> Signup and view all the answers

Which of the following scenarios illustrates a proposal failing to meet the criteria for an offer?

<p>A business posts about job openings with no commitment to hire. (D)</p> Signup and view all the answers

What is necessary for the validity of a notice of revocation in contract law?

<p>The revocation must reach the other party before acceptance is communicated. (D)</p> Signup and view all the answers

In determining whether the proposer’s revocation is effective, what can affect its validity?

<p>The method of communication chosen for the revocation. (A), The amount of time elapsed since the proposal was made. (B)</p> Signup and view all the answers

What is considered a 'reasonable time' for the acceptance of a proposal?

<p>An undefined duration as determined by the circumstances of each case. (D)</p> Signup and view all the answers

What happens if an acceptor fails to fulfill a condition precedent to acceptance?

<p>The offer is revoked and cannot be accepted. (B)</p> Signup and view all the answers

Which of the following statements reflects the principle regarding the lapse of time for a proposal's acceptance?

<p>Failure to accept within a specified time leads to the offer's termination. (A)</p> Signup and view all the answers

In Aberfoyle Plantations Ltd v Khaw Bian Cheng, what was significant about the sale agreement between the parties?

<p>The sale was contingent on several lease renewals being obtained. (D)</p> Signup and view all the answers

What key aspect must be established for a notice of revocation to be deemed valid?

<p>It must be communicated personally by the proposer to the other party. (C)</p> Signup and view all the answers

Which of the following factors does NOT contribute to the communication of a proposal to an offeree?

<p>The offeree's prior knowledge of the proposer. (A)</p> Signup and view all the answers

What must happen for an offer to be effectively revoked according to Section 6 of the Contracts Act 1950?

<p>The proposer must communicate notice of revocation to the acceptor. (A)</p> Signup and view all the answers

Which of the following indicates a valid method of revocation where time is not prescribed?

<p>The proposer communicates the revocation after a reasonable time. (A)</p> Signup and view all the answers

In Dickinson v Dodds, what was the key factor that led to the conclusion that the offer was revoked?

<p>The information of the sale to a third party reached the acceptor. (B)</p> Signup and view all the answers

In the context of contract law, when can a proposal's revocation occur due to the death of the proposer?

<p>Only if the acceptor is informed of the death before acceptance. (D)</p> Signup and view all the answers

Which statement reflects an incorrect understanding of how a proposal is considered revoked?

<p>The acceptor must provide formal notice that they do not wish to accept. (B)</p> Signup and view all the answers

What role does a condition precedent play in the acceptance of an offer?

<p>It can allow for the acceptance to become valid if fulfilled. (A)</p> Signup and view all the answers

What is a key element that makes a quotation not considered a binding offer?

<p>It lacks an explicit willingness to create a legal obligation. (B)</p> Signup and view all the answers

According to the Contract Act, what is necessary for a proposal to be valid?

<p>It should be communicated to the acceptor with a clear understanding. (C)</p> Signup and view all the answers

Flashcards

Express Promise

A promise made in words.

Offer (Legally Binding)

A willingness to enter a contract, the terms of which must be clear and will bind the offeror when accepted.

Implied Promise

A promise made through actions, not words.

Communication of Proposal

A proposal is communicated when the offeror's intent is known by the offeree.

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Display of goods (ITT)

Putting goods on display is usually an invitation to treat, not an offer.

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Clear Meaning (Offer)

An offer must be unambiguous to be valid.

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Invitation to Treat (ITT)

An indication that someone is open to offers, not a binding promise.

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Offer vs. Invitation to Treat (ITT)

An offer is a firm promise; an ITT is an invitation to make an offer.

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Revocation of Offer

The withdrawal of a proposal (offer) before it is accepted, rendering it ineffective.

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Revocation Method (s.6)

Revocation must be communicated by the offeror or specified methods, or acceptance time lapses.

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Revocation Time (s.5)

An offer can be revoked at any time before acceptance; time limits or other conditions may apply.

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Dickinson v Dodds (1876)

A case that showed that an offer can be revoked even if a deadline is stated, if the offeree learns of the revocation from a reliable source.

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Quotation as ITT

A quotation is typically an invitation to treat, not a firm offer to sell.

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Offer vs. Invitation to Treat

An offer is a firm promise to do something; an ITT invites others to make offers.

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Tender as ITT

A tender is often an invitation to treat, not a binding offer.

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Communication of Revocation

Revocation must be communicated to the offeree, not just known.

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Offer vs. Invitation to Treat

An offer is a firm promise to enter into a contract; an invitation to treat (ITT) is an invitation to make an offer. ITTs are not binding promises.

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Advertisement as an Offer

Advertisements can be offers if the wording clearly indicates a willingness to be bound by the offer to the whole world, unlike general invitations to buy.

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Carlill v Carbolic Smoke Ball

A landmark case showing how an advertisement can be considered an offer if it demonstrates a clear intent to be bound, e.g., depositing money with a bank.

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Display of Goods

Generally, displaying goods in a shop is an invitation to treat (ITT), not an offer to sell.

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Pharmaceutical Society of Great Britain v Boots

This case determined that products on a store shelf aren't an offer but instead an invitation to treat.

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Partridge v Crittenden

A case showing that advertisements with general wording in classified ads are typically invitations to treat, not offers, especially when dealing with protected or controlled items.

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Key issue in Advertisement Analysis

The crucial factor is determining the intent of the seller to be legally bound to sell when there is a communication through an advertisement.

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Valid Offer (Legally)

An offer that meets all legal requirements to form a contract, meaning it clearly states the intent to be bound and the exact terms.

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Offer vs. Invitation to Treat

An offer is a formal promise to do something. An invitation to treat (ITT) is an invitation to someone to make an offer.

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Quotation as Invitation to Treat

A quotation usually isn't a binding offer, but rather an invitation to the buyer to present their order.

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Communication of Offer

The offeror must clearly make their offer known to the offeree.

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Offer Requirements (Legal)

All valid offers need to be clear, valid in law, and contain all the details to be enforceable in court.

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Contract

A legally binding agreement between parties.

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Offer

A proposal to enter into a contract.

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Acceptance

Agreement to the terms of an offer.

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Consideration

Something of value exchanged by each party.

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Intention to create legal relations

The parties' understanding that the agreement is legally binding.

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Capacity

The legal right of the parties to enter into a contract.

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Invitation to Treat (ITT)

An invitation to make an offer, not a firm offer.

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Offer vs. ITT

An offer is a firm promise; an ITT invites others to make offers.

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Advertisement as Offer?

Advertisements are typically invitations to treat unless clearly intending to be bound.

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Preston Corp case

Illustrates the distinction between offers and invitations to treat in business dealings.

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Express Promise

A promise made in words.

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Implied Promise

A promise made through actions, not words.

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Communication of Proposal

A proposal's communication is complete when the recipient knows about it.

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Offer

Willingness to form a contract; terms must be clear and bind the offerer upon accept.

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Invitation to Treat (ITT)

A non-binding expression of willingness to negotiate.

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Clear Offer Meaning

An offer needs to be unambiguous (without confusion).

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Display of Goods

Usually an invitation to treat, not an offer.

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Advertisement as ITT

General advertisements are typically invitations to treat, not offers.

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Offer vs Invitation to Treat

An offer is a firm promise; an Invitation to treat (ITT) invites offers.

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Offer vs. Invitation to Treat

An offer is a definite promise to do something if the other party accepts; an invitation to treat (ITT) is not a promise but an invitation to another party to make an offer.

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Advertisement as an Offer

Advertisements may be binding offers if the wording is specific enough to convince a court that the advertiser intended to be legally bound. They are not always offers, especially in general cases.

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Carlill v Carbolic Smoke Ball

A case showing how a clear intent to be bound, like placing money as a deposit in a bank, can turn an advertisement into an offer.

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Pharmaceutical Society of Great Britain v Boots

Displaying goods in a shop is usually an invitation to treat, not an offer to sell.

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Partridge v Crittenden

Advertisements in classified ads are usually invitations to treat, not offers, especially when involving protected or controlled goods.

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Revocation of Offer

The withdrawal of an offer before it's accepted.

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Method of Revocation

An offer can be revoked with clear communication of intent by the offerer, or by other explicitly pre-agreed-upon methods, or acceptance time lapses.

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Revoking a Proposal (s.6)

Ending an offer before acceptance. This can happen through communication, time lapse, or the offeror's death/mental state.

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Communication of Revocation

The offeror (the person making the offer) must tell the offeree (the person receiving the offer) they're taking back the offer.

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Revocation Before Acceptance

An offer can be revoked any time before the other person accepts it.

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Time Lapse

An offer can end if not accepted within a particular amount of time or a reasonable time if no specific time is given.

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Dickinson v Dodds (1876)

A legal case showing an offer can be revoked, even if they said it would be open for a period, if the offeree hears it's been withdrawn from another source.

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Acceptance is Complete

A proposal can only be revoked before the acceptance process is finalized.

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Condition precedent to acceptance

A condition that must be met before an offer can be accepted.

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Revocation of Offer

Withdrawal of an offer before it is accepted.

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Aberfoyle Plantations Ltd v Khaw Bian Cheng case

Legal case demonstrating a condition precedent in a sale agreement.

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Death or mental disorder of offeror

An offer is terminated upon the offeror's death before acceptance.

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Dickinson v Dodds case

Case showcasing revocation of an offer, even with a stated deadline.

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Bradbury v Morgan case

Case illustrating death not always revoking an offer.

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Contract Act 1950, s.38(2)

Portion of the act regarding offeror's death and its effect on contract.

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Revocation

Withdrawal of an offer.

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Section 6 of Contract Law

The section outlining how to legally remove a contract offer

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Valid Offer (Legally)

An offer that adheres to legal requirements, clearly showing intent to be bound by specific terms.

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Offer vs. Invitation to Treat

An offer is a firm promise to enter a contract; an invitation to treat (ITT) is not a promise but an invitation for someone else to make an offer.

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Quotation as Invitation to Treat

A quotation is typically not a legally binding offer; it's an invitation for the recipient to make an offer.

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Communication of Offer

The offeror (person making the offer) must clearly make the offer known to the offeree (person receiving the offer).

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Offer Requirements (Legal)

All valid offers need clarity, legal validity, and detail to be enforceable in court.

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Advertisement as ITT

General advertisements are typically invitations to treat, not offers.

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Display of Goods

Usually, displaying goods in a shop is an invitation to treat (ITT), not an offer to sell.

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Revocation of Offer

Withdrawing an offer before acceptance.

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Revocation Before Acceptance

An offer can be revoked any time before the other party accepts it.

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Contract

A legally binding agreement between parties.

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Offer

A proposal to enter into a contract.

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Acceptance

Agreement to the terms of an offer.

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Consideration

Something of value exchanged by each party.

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Intention to create legal relations

The parties' understanding that the agreement is legally binding.

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Capacity

The legal right of the parties to enter into a contract.

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Offer (S.2(a))

Signifying willingness to do or abstain from an act to receive the other person's agreement.

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Preston Corp case

Illustrates the difference between offers and invitations to treat (ITT) in business transactions.

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Invitation to Treat (ITT)

An invitation to make an offer, not a firm promise.

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Offer vs. Invitation to Treat

An offer is a clear promise; an ITT is an invitation to respond with an offer.

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Advertisement as Offer/ITT

Advertisements are usually invitations to treat unless the language makes it clear it's an offer to the whole world.

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Display of Goods

Generally, displaying goods in a shop is an invitation to treat (ITT), not an offer to sell.

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Quotation

Usually an invitation to treat; it's not a firm offer to sell.

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Revocation

Withdrawal of an offer before it is accepted.

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Revocation of Offer Condition

An offer can be revoked anytime before acceptance; time limits or other conditions may apply.

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Communication of Revocation

Revocation must be communicated to the offeree (the person who received the offer).

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Express Promise

A promise made directly through words.

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Implied Promise

A promise shown through actions, not words.

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Communication of Proposal

A proposal is complete when the receiver understands it.

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Offer (Legal)

A willingness to create a contract, with clear terms.

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Invitation to Treat (ITT)

Signaling openness to offers, not a binding promise.

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Clear Offer Meaning

An offer must be unambiguous; no confusion.

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Display of Goods (ITT)

Putting goods on display is normally an invitation, not an offer.

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Advertisement as ITT

General ads are usually invitations to treat, not offers.

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Offer vs. Invitation to Treat

An offer is a firm promise; an ITT invites one to make an offer.

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Offer vs. Invitation to Treat (ITT)

An offer is a firm promise to enter a contract; an invitation to treat (ITT) is not a promise, but an invitation for someone else to make an offer.

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Advertisement as an Offer?

Advertisements are typically invitations to treat (ITT), not offers, unless the wording clearly intends to be legally bound; e.g., a specific reward.

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Carlill v Carbolic Smoke Ball

A legal case where an advertisement was considered an offer because it demonstrated a clear intent to be legally bound (e.g., money deposited in a bank account).

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Pharmaceutical Society of Great Britain v Boots

This legal case determined that displaying goods on shelves is an invitation to treat (ITT), not an offer to sell.

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Partridge v Crittenden

A case showing that general advertisements in classified ads, especially for protected goods, are typically invitations to treat (ITT), not offers.

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Preston Corp Sdn Bhd v Edward Leong

A legal case illustrating the distinction between offers and invitations to treat (ITT) in business dealings (e.g., letters and quotations).

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Revocation of Offer

Withdrawing an offer before it's accepted.

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Communication of Revocation

The offeror must tell the offeree they're taking back the offer.

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Revocation Before Acceptance

An offer can be revoked before the other person accepts it.

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Time Lapse

An offer ends if not accepted within a particular amount of time or a reasonable time if no specific time is given.

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Condition precedent to acceptance

A condition that must be met before an offer can be accepted.

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Acceptance is Complete

A proposal can only be revoked before the acceptance process is finalized.

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Offer vs. Invitation to Treat

An offer is a definite promise to do something if the other party accepts; an invitation to treat (ITT) is not a promise but an invitation for another party to make an offer.

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Aberfoyle Plantations Ltd v Khaw Bian Cheng case

Legal case demonstrating a condition precedent in a sale agreement.

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Quotation as ITT

A quotation is typically an invitation to treat, not a firm offer to sell.

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Offer vs. Invitation to Treat

An offer is a firm promise; an invitation to treat (ITT) is an invitation to make an offer.

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Revocation of Offer

The withdrawal of a proposal (offer) before it is accepted, rendering it ineffective.

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Revocation Method (s.6)

Revocation must be communicated by the offeror or specified methods, or acceptance time lapses.

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Revocation Time (s.5)

An offer can be revoked at any time before acceptance; time limits or other conditions may apply.

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Dickinson v Dodds (1876)

A case that showed that an offer can be revoked even if a deadline is stated, if the offeree learns of the revocation from a reliable source.

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Tender as ITT

A tender is often an invitation to treat, not a binding offer.

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Communication of Revocation

Revocation must be communicated to the offeree, not just known.

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Advertisement as ITT

General advertisements are typically invitations to treat, not offers,especially when involving protected or controlled goods.

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Display of Goods

Generally, displaying goods in a shop is an invitation to treat (ITT), not an offer to sell.

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Study Notes

Formation of a Contract

  • A contract is a legally binding agreement, not just an agreement.
  • Key requirements for a contract:
    • Offer
    • Acceptance
    • Consideration
    • Intention to create legal relations
    • Capacity

Dealing with a Normal Business Contract

  • Normal business contracts don't require witnesses, to be in writing, use a guarantor, or stamp duty.
  • These are basic requirements.

Elements of a Written Contract

  • Offer
  • Acceptance
  • Intention
  • Consideration
  • Capacity

Valid Offer

  • Must meet legal requirements.
  • Must be clear in meaning.
  • Express or implied.
  • Must be communicated to the offeree.
  • A statement that is binding at law.

Preston Corp Sdn Bhd v Edward Leong

  • The case involved a printing company (respondent) and a publishing company (appellant).
  • Quotations were exchanged, and the publishing company issued printing orders.
  • The court held that the quotations acted as an invitation to treat and the printing orders constituted the offer.

Invitation to Treat

  • An indication of willingness for an offer to be made.
  • Not a binding statement.
  • Examples include:
    • Display of goods
    • Pamphlets
    • Advertisements
    • Tenders

Display of Goods

  • Goods displayed in a shop are invitations to treat, not offers.
  • Buyer makes the offer when they present the item to the cashier.

Advertisements

  • Advertisements are usually invitations to treat, not offers.
  • The wording matters and should show an intention to be bound.
    • Ads may be offers if the wording communicates an intention to be bound.
    • Carlill v Carbolic Smoke Ball Co. – An advert was held to be an offer as it explicitly stated a reward.

Tender

  • A formal invitation to submit bids from suppliers for a particular project.

Revocation

  • A proposal may be revoked before acceptance.
    • May revoke an offer based on notice to other party.
    • Method of revocation, Lapse of time, Failure to fulfill a condition, Death or mental disorder.
  • Dickinson v Dodds - An offer is revocable any time before acceptance. It does not need to be communicated by a third party.
  • Bradbury v Morgan - Death only revokes an offer if the service required for the offer is personal.

Important Cases and Terminology

  • Ahmad Meah & Anor v Nacodah Merican: vague offer (house) is invalid due to lack of clear meaning.
  • Affin Credit (Malaysia) Sdn Bhd v Yap Yuen Fui: offer does not comply with legal requirements. Offer did not include summary of obligation.

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