\fQuestion 1 During a Christmas party, Meghan offered to sell to her sister Teresa her precious music box which she inherited from her grandma. She wanted RM5000 for it. She even wrote down her offer on a paper napkin. Teresa, who was busy dancing, grabbed the paper napkin and said: \"I need to think about this, I'll get back to you\". A few days later, Teresa wrote to Meghan and replied as follows: "Will you accept RM3000 for your music box?". She did not receive any reply from Meghan. Three (3) weeks later, Teresa wrote again to Meghan, \"Okay, okay, I will pay RM5000 for your music box". Teresa then received a telephone call from Meghan who laughed and said she was just joking about the music box. Meghan said that she wasn't serious about the offer and that the music box is actually worth RM10000, not RM 5000. Teresa is furious and comes to you for advice. She wants to know whether there is a valid contract between Meghan and her. Advise Teresa, referring in particular to the elements of intention to create legal relations, consideration, offer and acceptance. (30 marks) Group 4 SAMPLE ANSWER (a) He made the offer to his friend Burhan. Burhan visited Amran and told Amran he was interested but wanted to think about it further. The next day, he wrote to Amran enclosing a cheque for RM8 000, saying that if he did not hear from Amran within three (3) days, he shall assume that Amran had accepted his offer. Amran did not reply. Issue : The issue to be discussed here is whether there is a valid contract between Amran and Burhan. Law: Offer under Section 2(a) of Contract Acts 1950 is defined as "when one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to the act or abstinence." As for acceptance, section 2(b) stated that acceptance is when "the person to whom the proposal is made signifies his assent thereto, the proposal is said to have been accepted. There are multiple essential features of acceptance". It was held in the case of Felthouse V Bindley [1862] EWHC CP J35 that silence is not a mode of acceptance and that acceptance is only effective when it has been communicated. Referring to section 7(a), "acceptance of the proposal must be absolute and unqualified." There must not be any changes to the terms of the offer. If the terms of the agreement had changed, this would be known as a counter offer. In the case of Hyde V Wrench [1840] 49 ER 132, it was held that a counter offer is a rejection of the original offer. Hyde can no longer accept the earlier offer due to the fact that he destroyed the original offer by counter offering. I Application : Amran had offered to sell his collection of Avengers comics for RM10,000 to Burhan as per section 2(a). However, Burhan did not accept the offer at that moment as he did not signify his assent as required under section 2(b). Instead, Burhan had sent a cheque for RM8000 and would consider that the comics would be his possession if Amran did not say anything to him regarding the comics. He had made changes to the terms of the offer and therefore there was no acceptance as it was not absolute and unqualified as required under section 7(a). In fact this would be considered a counter offer. Burhan counter offered with RM8000 instead of accepting the offer of RM10,000 that Amran made. It was held in the case of Hyde V Wrench [1840) that counter offer means that the initial offer was rejected. This led to the original offer of RM10,000 being destroyed. Burhan had made a new offer. Secondly, silence is not a mode of acceptance and acceptance is only effective when it has been communicated. This was held in the case of Felthouse V Bindley [1862). Felthouse had told his nephew that if he did not hear anything from him concerning the horse, he would consider that his offer was accepted and that he would own the horse. The court held that there Secondly, silence is not a mode of acceptance and acceptance is only effective when it has been communicated. This was held in the case of Felthouse V Bindley [1862]. Felthouse had told his nephew that if he did not hear anything from him concerning the horse, he would consider that his offer was accepted and that he would own the horse. The court held that there was no contract between them both. There was no acceptance of the offer. An acceptance of an offer must be communicated clearly. Similarly to Amran and Burhan, Amran had not accepted Burhan's offer of RM8000 for his comics because he did not indicate or communicate his acceptance to Burhan. Burhan had no right to assume that Amran's silence is his acceptance of the offer made. conclusion: To conclude, the Avengers comics still belong to Amran as he had not accepted Burhan's offer. There is no contract between Amran and Burhan