Business And Company Law Essay

2875 words - 12 pages

Question 1

The issue in this case is whether there is a legally binding contract between Roland and Bernie. The things that needs to be considered is whether there is an agreement between Roland and Bernie. If there is an offer and acceptance, then there is an existence of agreement. According to Section 2(a) of the Contract Act 1950, offer can be defines as when one person implies his/her willingness to another in order to acquire their consent. (Abdullah et al, 2011) The person who make the offer is known as ‘offeror’ or ‘promisor’. (Lee and Detta, 2009) An offer can be made in the method of orally, by conduct, writing or by the mixture of these forms. An offer must require ...view middle of the document...

The shop owner was charged with ‘offering for sale’ the dangerous weapons without a license. The court was held that the display of the flick knife was only an invitation to treat and not a contractual offer. The shop owner was not guilty as he had not offered to sell the knife. (Mohammad Naqib and Abdul Jalil, 2011)

The principal is based on the case of Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] 1 QB 401; [1952] 2 All ER 456. In this case, the defendant who operate a self-service chemist shop, was charged under the Pharmacy Poisons Act 1993 (UK). The act forbidden the sale of certain poisons unless the sale controlled by a registered pharmacist. The issue of this case is whether there was a sale when the customers choose items they wished to buy on display, placed them in the basket and took them to the cash counter. The court held that the display of goods with price tag was an invitation to treat. When the customers took the item to the cashier’s desk, then the proposal took place. The cashier can either accept or reject the proposal. (Yusof, 2007)

Obviously, Bernie is the proposer in this case. The other issue is whether Roland had consented to the offer made by Bernie. According to section 2(b), acceptance can be defined as when the person to whom an offer is made implies his consent to that, the offer come into acceptance stage. (Dass, 2005) From the facts, Roland obviously did not accept Bernie’s offer to purchase at the price marked RM10 000. On the other hand, Roland notified her that the actual price of the vehicle was RM30 000 which are actually a counter proposal and there is no acceptance as in the case of Hyde v Wrench (1840) Beav. 334. Hence, Roland did not making acceptance and no agreement beings and accordingly no legally binding contract between Roland and Bernie. As a conclusion, Bernie cannot bring any legal actions to Roland.

In this question, Roland was making an invitation to treat when he displayed the price marked on the car vehicle. Actually, he is making the invitation for customers to form an offer to him. In this case, Kathy was making an offer as she implies her willingness to purchase the car at the price marked with the desire that Roland will deal the transaction at this price. However, Kathy was requested to give a specified period to arrange for finance. This problem is concerned with the situations in which offers can be revoked. In particular, it raises questions about the extent to which a promise to keep an offer for a particular period is binding.
Based on Section 26 of the Contract Act 1950, an agreement without consideration is invalid. (Vohrah and Wu, 1999) According to section 2(d), consideration can be defined as an offeree promises to do or to refrain from doing something, such act or abstinence or promise, at the desire of offeror. et al, 2011) The basic rule mentions that an offeror who promised to hold an proposal open for a...

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