QUESTION 1

A contract or an agreement is usually reached by the process of offer and acceptance and the law requires an offer on ascertainable terms which receives an unqualified acceptance from the person to whom it is made (Halsbury Laws of England, 4th edition, Reissue 1998, para 632).

In Malaysia, an offer in the context of the Contract Act 1950 is known as a 'proposal', which is defined in Section 2(a) of the Act and a contract is made when there is an acceptance, this had been stated in Section 2(b) the Act. When both offer and acceptance obtained, a promise had formed. According to Section 2(e) of the Act, every promise and every set of promises, forming the consideration for each other, is an agreement, and by referring to Section 2(h) of the Act, agreement enforcement by law is a contract. By referring to Section 10 of the Act, agreement are contracts if they are made by the free consent of the parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void.

In current case, Ah Chong had decided to sell his car that was bought in the year 2000, and he is the first owner. Ah Chong had placed an advertisement in the local newspaper with reads: 'FOR SALE: 1 UNIT CAR FOR SALE RM 30, 000.00'.

Muthu had seen the advertisement and had visit Ah Chong, Ah Chong had told Muthu that the car was bought by Ah Chong in year 2000 and he is the first owner. Muthu told Ah Chong that he had to consult his wife, who will only be back from India in a week's wife, if she is agreeable to the terms of the purchase of the car. On the following week, Muthu accepted the purchase price of the car for RM 30,000.00 by calling Ah Chong directly.

At the same time, Ah Chong offered to sell the vehicle to his ex-colleague, Ali via an email for a reduced price of RM 28,000.00. Ali agrees to purchase the vehicle but on condition that it be given a new coat of paintwork.

John, an expatriate who has also seen the advertisement posted his acceptance to buy the vehicle for the price as advertised to Ah Chong.

REQUIRED: (The answer must be supported with the relevant cases and act)

i. Identify whether the advertisement made by Ah Chong is an offer.

(15 Marks)

ii. Discuss a contract forms between Ah Chong and Muthu.

(15 Marks)

iii. Analysis the validity contract between Ah Chong and Ali.

(15 Marks)

iv. Identify whether a contract exist between John and Ah Chong.

(15 Marks)