QUESTION 1

Adam wrote a letter to Nor offering to sell his handphone for RM250. The letter
reached Nor on 2nd April, 2009. Nor sent his letter of acceptance at 2pm on the
same day. Adam later had a second thought and decided to revoke his offer.
He tried to contact Nor but to no avail. On 3rd April, 2009 he went to Nor house
and informed her that he would like to revoke his offer. Nor letter of
acceptance reached Adam on 4th April, 2009. Adam said that the letter of
acceptance was void because he had already revoked his offer. Nor insist on
buying the handphone and seeks your advice.

Issue
Whether the revocation of contract between Adam and Nor is valid or not.

Law
Section 2(a) - Proposal is made when one person signifies to another his willingness to do or
abstain from doing anything, with a view of obtaining the assent of that other to such act or
abstinence.

Section 2(b) - When the person to whom the proposal is made signifies his assent thereto,
the proposal is said to be accepted.

Section 2(c) - Calls the person accepting the proposal the promise.

Section 4 (a) - Communication of proposal

Proposal must be communicated to the other party to the extent that the party accepting the
proposal if aware of the existence of such proposal in the first place.
Relevant case: R v Clarke
The western Australian government offered a reward for information leading to the arrest
and conviction of person responsible for the murder of two police officers. X and Clarke wore
arrested and charged with murders but shortly after, Clarke give information with lead to the
arrest of another person Y. X and Y were later convicted for the offence and Clarke who did
not commit the murders claimed the reward. Court refused to grand his claim. It failed on the
grounds that information was given to clear himself from the murder charge and not reliance
on the offer of reward.
Rules of acceptance - Acceptance must be communicated
Acceptance must be communicated to the proposal for there to be a binding contract and
cannot be silence and acceptance can be made in writing, orally or by conduct.

When is the communication of acceptance complete?

~ General rule: an acceptance is completely communicated when it is actually brought to
the notice or comes to the actual knowledge of the offeror.
~Exceptions: Section 4(2) Postal Rule
The parties have intended the use of the post as a means of communications. According to
the subsection, the communication of an acceptance is complete as against the proposer,
when the letter is posted and an acceptance is complete as against the acceptor, when the
letter is received by the proposal.
~Relevant case: Adams v Lindsell
The defendant wrote the plaintiff offering to sell wool on certain terms. The defendant
however, misdirected the letter and it reached the plaintiff later than usual. The plaintiff
immediately posted his acceptance when received the letter of offer. Meanwhile, the
defendant (thinking the plaintiff was not interested in the offer) had already sold the wool to a
third party. Court held that the acceptance was complete upon posting.

Section 5(1) - Proposal may be revoked at any time before communication of its acceptance
is complete as against the proposer, but not afterwards.

Section 6(a) - The revocation of the proposal must be communicated by the proposer to the
other party before it accepts.
Cases of Byrne v. Tienhoven (1880), in this case the defendant offered to sell 1000 boxes of
tinplates to the plaintiff. At the date of 1 October, defendant posted a letter of offer in Cardiff
to the plaintiff in New York. On 8 October, defendant once again posted a letter to revoke the
offer of 1 October. At the date of 11 October, the plaintiff received the letter of offer posted
on October 1 and sent acceptance by telegram at the same day. It also followed up with
letter of acceptance on 15 October. On the 20 October, defendant letter of revocation
received by the plaintiff. The court held that there was a contract between the parties
because the revocation of the offer posted on 8 October was not effective till 20 October
when it was received by the plaintiff but in the meantime, the latter had already accepted the
offer on 11 October when the telegram was sent.
Application

By applying the fact to the case, according to section 2(a) of the Contract Act, the proposal is
made when one person offer to another person to do or abstain from doing anything with a
view of obtaining the assent of that person. In this case, Adam have wrote an offer letter to
Nor offering to sell his handphone for RM250. Furthermore, based on section 2(b), the
agreement comes into being when Nor accepts the offer from the Adam. Nor sent his letter
of acceptance at 2pm on 2nd April 2009 same day the letter Adam reached her. Hence,
there is a valid contract between Nor and Adam when the letter of acceptance towards the
offer has been sent by Nor. In this case, revocation of offer that have been made by Adam is
void since Nor had already sent his letter of acceptance on 2nd April 2009. Besides that, by
applying to section 5(1), the proposal may be revoked at any time before the communication
of its acceptance is complete as against the proposer, but not afterwards. According to
section 6(a) that explained about the ways to revoke the proposal which is the
communication of notice of revocation. Based on the general rule, the revocation of the
proposal must be communicated by the proposer to the other party before it accepts. From
the case, Adam had decided to revoke his offer, he tried to contact Nor but to no avail. On
3rd April 2009, he went to Nor house and informed her that he would like to revoke his offer.
The revocation of offer is void because Nor have already sent her letter of acceptance at
2pm on the same day when she has received the letter of offer from Adam. The contract
between Nor and Adam is still valid even thought the acceptance letter reached Adam on 4th
April. It shows that once Nor accept the offer from Adam, it comes into being and cannot be
revoked anymore.

Conclusion

As a conclusion, the revocation offer from Adam is void since Nor had already sent the letter
of acceptance on 2nd April 2009. Adam vannot revoked his offer because the
communication of the revocation does not been made before Nor send the letter of
acceptance towards Adam. Nor can buy the handphone from Adam because there was a
valid contract between them once Nor sent her letter of acceptance.