Objektif: Mengenal dan mengaplikasi aspek undang- undang berkaitan dengan perniagaan

1. Objektif: Mengenal dan mengaplikasi aspek undang- undang berkaitan dengan perniagaan Bertindak dan menangani isu perniagaan secara kritis Membeza hak-hak dan tangungan dalam undang-undang perniagaan khususnya dalam undang-undang kontrak

2. Commercial Law The body of law which governs business and Commerce. Many area of contract including sales of goods, agency, guarantee etc. Sources of law originally, common law: the law is created and/or refined by judges.

3. Commercial Law/ Undang-undang KomersilMGM 3351

4. Sources includes statutes, case law and common law Subjects covered in this course: Law of Contract Agency Sales of Goods Hire purchase Partnership Insurance Negotiable Instruments

5. Contract Def: an agreem wh. legally binds the parties Essential elements in forming a contract: Offer Acceptance Consideration Intention to create legal relation Capacity to contract

6. Offer/proposal s. 2(a)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, he is said to make a proposal = an indication by the offeror to another of his willingness to contract. It terms must indicate that it is to become binding on the offeror as soon as it has been accepted by the offeree. s. 9 offer- express or implied

7. Melaka Farm Resorts (M) Sdn Bhd V Hong Wei Seng [2004] H was appointed orally as GM for the company. He resigned and claimed arrears for his salary. Q-was there an employment contract? Held: based on the fact that the defendant has allowed the plaintiff to work in the defendant's place of employment and a sum of RM4,000 has been paid by the defendant to the plaintiff as salary for two months, there was a contract of employment- implied from the conduct of the parties executive director testified that the plaintiff's monthly salary was RM2,000 - proof of an express contract of service [oral]

8. A valid offer: 1- must be definite- cannot be vague e.g. Guthing v Lynn, L agreed to pay extra £5 to G if the horse was “lucky” for me. How to determine lucky? Too vague 2- can be made to a specific person or to general public e.g. Carlill v Carbolic Smoke Ball Co. S offered to pay £100 to anyone suffered influeza after sniffing the smokeball 3 times a day for 2 weeks. “1,000 pounds is deposited with the Alliance Bank, Regent Street, showing our sincerity in the matter” C used the smokeballs as mentioned but suffered influenza.

9. C claimed the promised reward. Q- was there an offer because it was not specifically made to C? Held: the offer can be made to a public at large just like making an offer for reward. Q-was there a clear offer? Held- On the construction of the case= the offer was certain. An ordinary person would understand an ordinary advertisement about medicine and especially about a specific medicine against influenza that it must protects the user during the period of use

10. Pharmaceutical Society of Great Britain v. Boots Cash Chemists (Southern) Ltd The chemist outlet was charged with an offence of selling drugs without the supervision of a qualified pharmacist. The outlet displayed drugs on shelves while the pharmacist waited at the check-out counter. Q= whether the display was an offer or an invitation for shoppers to make an offer? Held: the display was an invitation to treat. An offer took place when the shopper brought the drugs to the counter and an acceptance when the pharmacist agreed to take the money.

11. Advertisement Coelho v The Public Service Commission Def. advertised in Malay Mail for the post of assistant passport officer. C applied and accepted. Later when dispute arose between them, his appointment was terminated. He was told that his appointment was based on probation. Letter of appointment given to C did not state that it was a probationary post. Q= when did the contract take place, i.e., whether the advertisement was an offer? Held: the advertisement was an invitation to treat

12. The Malay Mail advertisement was an invitation to qualified persons to apply. The resulting applications were offers. Such offers could either be accepted simply or with the imposition of conditions as terms of the contract, additional to those set out in the advertisement. In the latter case the offers by the applicants would have been met by counter-offers which the offerers could accept or refuse. Auction Harris v Nickerson N advertised an auction of certain goods including office furniture. H attended the auction to buy several office furniture. N cancelled the auction of the furniture. H claimed compensation for breach of contract.

13. Q- Was there a contract? Did the advertisement constitute an offer and by going to the auction did H make an acceptance to the offer? Held: Advertisement was merely a declaration of intention to accept an offer and not an offer

14. Tender Cheng Keng Hong v G’ment of the Federation of Malaysia C submitted a tender to build school. The electrical specification in the drawing differ from the specification in the clause 18 & 19 of the agreement. H/ever, they were assured by an architect appointed by the government to supervise the project that they would be paid for the extra fittings. Later G’ment refused to pay.

15. One of the issue was should the drawing be read separately from the contract specification? The law with regard to acceptance of a tender is perfectly clear. The unconditional acceptance of a tender by the employer binds both parties, and a contract is thereby formed, the terms of which are ascertainable from the invitation to tender, the  tender, the acceptance, and any other relevant documents. [per Raja Azlan Shah J]

16. Standing offer - tender Continuing offers to the government. The terms usually allows both parties to go separate way anytime. V KANAGASABAI v THE STATE OF SELANGOR Tender for haulage and general transport. After certain periods the state did the work themselves, meaning less work for the Plf. Plf. sued the state for loss of works. Held: the offer for further works was not accepted by the government. Hence, the government can do the works themselves as provided in the contract terms.

17. Other cases: Bus Wilkie v London Passenger Transport Board ordinary passenger - taking a bus intending to pay his fare. Contract of carriage is not made the moment the passenger puts his foot on the bus but when he, by conduct, accepts the offer. Taking hold of the rail and putting one’s foot on the bus is a thing which the fare-paying passenger does by virtue of the implied licence given by the bus company to the intending fare-paying passenger to get to the position where he will make the contract – no contract yet. [Just in the same way as a railway company impliedly licenses an intending passenger to walk through the company's premises to the booking office to make a contract of carriage]

18. Parking – vending machine Offer by the parking operator, acceptance by vehicles owners- by entering into the parking space. Thornton v Shoe Lane Parking Held: a contract was formed by a customer entering a car park via an automatic barrier – the operation of the barrier effectively performed the act of contract creation as well as satisfying intent on the part of the car park.

19. Current issue - Online offer Kodak case Website of the company – advertised camera for £100 each. Received many orders and confirmed by e-mails. Realised about the mistake decided to close the site temporarily. Q= was there an offer? can the company cancel the order? Did the Company made an invitation to treat? Did the Consumer made an offer?

20. E-mail offer or an invitation to treat? what constitutes the equivalent of posting in a letter box - is it the moment of transmission of the email, the moment it arrives in the addressee's inbox or the moment that the addressee opens that email? Electronic Commerce Act 2006

21. 3) Must be communicated s.4(1) The communication of a proposal [an offer] is complete when it comes to the knowledge of the person to whom it is made. Madam Loh Sai Nyah v American International Assurance Co Ltd Policy insurance contested on ground of no acceptance by the insurance company. 24/6/77 - Proposal [form] filled in by the deceased & paid 1st premium to an alleged agent. 30/6/77- the proposal reached the company 26/6/77- the deceased died

22. Q- was there a contract? Held- communication of offer was not complete because it reached the offeree after the offeror has died. s.4(1) communication of a proposal is completed when it comes to the k/ledge of the offeree 1/1/08 8 a.m – A sent an offer letter to B. 2/1/08 10 a.m – it reached B’s place but was not given to B who was away Issue: can B receive the offer?

23. A told C of his plan to offer his car to B. C told B about the offer Can B accept the offer? Can C accept the offer? Can the offer be communicated by third party? s. 4 – did not state that the offer must come from the offeror • The communication of a proposal is complete when it comes to the knowledge of the person to whom it is made

24. B read an offer letter which A intends to send to B but left it open on his (A) desk. Can B accept the offer? A made an offer of RM1000 reward to anyone who found and return his lost cat in a newspaper. By chance the cat came to B’s house. B, A’s neighbour, who recognised the cat, returned the cat to A’s house. Later B came to know about the offer and claims the reward. Can B claim the reward?

25. Revocation of offer Section 3 – by doing or by abstaining from doing … 1- by a notice - s. 6 (a) HENTHORN v FRASER. 7/7/1891 -H received an offer from a building society to purchase a house - to be accepted w/in 14 days. 8/7- another person offered a higher price for the property. The parties signed the S&P agreement on that day.

26. Bet.12-1.00 o’clock on 8/7 the society wrote a cancellation letter to H – delivered to his address between 5-6.00pm. H was not around did not get it till 8.00pm. 8/7 at 3.50pm- H’s solicitor posted a letter to accept the offer - delivered at the society’s office at 8.30 pm. 9/7 – letter received by the secretary in the morning. He replied stating that the offer has been w/drawn.

27. Q-when did the withdrawal become effective? “…a person who has made an offer must be considered as continuously making it until he has brought to the knowledge of the person to whom it was made that it is withdrawn.” “… and this was not done in this case till after the letter of acceptance was posted.” Held: a revocation sent by post does not operate from the time of posting it but when it reached the addressee.

28. BS H Another

29. s.4 (3) communication of a withdrawal complete against the offeror when it is put in the course of transmission to be out of his power & against the addressee when he had knowledge of it e.g. 5/1/08 8 a.m - A sent notice to B – w/draw his offer. 5/1/08 9 a.m - B made an acceptance via telephone 6/1/08 11 a.m - B received A’s notice of revocation Issue: i- can B accept the offer at 9 a.m. on 5/1?

30. Can the revocation notice be given by a 3rd person? Dickinson v Dodds 10/6/1874 - D offered in writing to sell certain real estate to P. “This offer to be open until 9am of June 12.” 11/6/1874 -  D  signed a contract for the sale of the property to Allan and received deposit 11/6/1874 afternoon - Berry informed P that D had offered or agreed to sell the property to Allan. 11/6/ 1874 evening - P went D’s residence and left his formal acceptance with Mrs. Burgess who forgot to give it to D. 12/6/1784 morning - Berry found D at the railway station and handed to him a duplicate of the acceptance by P. D replied it was too late 12/6/1874 a few minutes later - P saw D and handed him another duplicate of theacceptance. D said “you are too late” P sued for specific performance (won). D and Allan appealed. Held:D manifested the revocation of his offer. Promise was not binding. Before a complete acceptance by P of the offer, D was not bound.

31. s. 6(a) A proposal is revoked--(a) by the communication of notice of revocation by the proposer to the other party; Notice – express or implied - written, oral or by conducts Example of conducts – when the offeror sold the subject matter to s/one else.

32. Revocation – unilateral contract A – offers to B a reward of RM2000 if B swims across the channel to Singapore B- B starts swimming and managed to complete half of the journey when A comes by boat and withdraw his offer Can the offer be revoked?

33. Revocation – option contract e.g. A offers to sell to B a car for RM20,000 and will keep the offer open for 14 days if B pays RM5,000. B paid RM5,000 to A. Can A revokes his offer before the 14 days expired? Low Kar Yit & Ors v Mohamed Isa & Anor L’s agent was given an option by M to buy a piece of land subject:

34. a formal contract to be drawn up and agreed upon by the parties, and • the approval of the sale and of the said contract by the High Court at Kuala Lumpur L’s agent exercised the option. M failed to sign the sale agreement. L’s sue M for specific performance Q- was there a valid contract? Held: the option was conditional upon and subject to a formal contract to be drawn up and agreed upon between the partiesThere was an agreement to enter into an agreement.

35. 2- expiration of time S. 6A proposal is revoked-- (b) –by the lapse of the time prescribed in the proposal for its acceptance, or, if no time is so prescribed, by the lapse of a reasonable time, without communication of the acceptance Offord v Davies where a guarantee expressed to last 'for the space of twelve calendar months' was held to have been validly revoked within that period, because the creditor had not acted on the faith of it by the time he received notice of revocation

36. What is a reasonable time? Macon workd & tradings sdn bhd v Phang Hon Chin Reasonable time is a question of fact and depends in each case on the circumstances which actually exist and on the nature of the Business.

37. Ramsgate Victoria Hotel Co. Ltd. v Montefiore M made an application to buy shares in R. 5 months later R informed M that shares have been allocated for him. M refused to accept the share. Q – was M bound to accept the allotment and pay for the shares? Held: The offer had lapsed. Failure to accept w/in reasonable time implies rejection

38. 3- failure of a condition subject to wh. the offer was made A motor vessel was advertised for sale by the sheriff of the Hg Ct seremban in an advertisement. App- sent an offer to the sheriff- on the sheriff's terms & two conditions: that the port authority did not require any repairs to be done to the vessel and that the vessel could leave on its own power on the basis of a seaworthiness certificate Two conditions were satisfied & judge approved the sale. App. refused to pay the balance of the price. Claimed no binding contract.

39. Q- was there a valid and binding contract between the appellant and the sheriff of the High Court at Seremban. Held- advertisement amounted to an invitation to treat. App made a conditional offer. sheriff had clearly accepted the appellant‘s offer by words and by conduct. Offer valid If the conditions were not fulfilled the offer is considered as expired Financings Ltd v Stimson [1962] 3 All ER 386. 16/3 -S signed a h& p form – not binding until finance co. signed the form. 24/3 – the car was stolen. Found but badly damaged 25/3- finance co. signed the form. Q- Was S bound by the offer? Held- not bound because there was an implied condition that the car would be in substantially the same condition when the offer was accepted as when it was made.

40. 4 – by death / insanity If the offeree died/becomes insane – offer lapses If the offeror died/insane – offer lapses if the offeree knows about the death/insanity at the time of his purported acceptance. In case the contract requires personal skills – offer lapses unsound mind - to avoid a contract - permissible if it could be shown that the other party to the contract knew of the insanity at the time of contracting

41. Acceptance s. 2(b) - When a person to whom a proposal is made signifies his assent to the proposal – he made an acceptance. s. 7 (a) - The acceptance must be made w/out variations or modifications It must corresponds with the offer. If varies or modifies the offer it becomes – counter Offer.

42. Hyde v wrench 6/6 - W offered to sell his estate to H -£1000. 8/6 – H replied –offer to pay £950. W refused. 27/6- H sent an acceptance to original offer` Q-did the original offer exist on 27/6? Can H accept the offer on that date? Held-no acceptance because the letter on 8/6 is considered as a rejection of the original offer.

43. Counter – offer v further information Stevenson Jaques v& co. v McLean M sent letter to S offering iron at 40s nett cash. Offer open till Monday. 9.42 a.m. Monday- S sent telegram to M asking whether M will accept 40s for delivery w/in 2 months or the longest period which M will do. After that – M sold the iron to another person. 1.25 p.m. Monday –M sent telegram to S telling about the sale 1.34 p.m Monday – before receiving M’s telegram S sent a telegram to accept M’s offer.

44. Q- did the letter on Monday at 9.42 amounted to a counter offer? Was there an acceptance? Held- no counter-offer. S’ letter was a mere inquiry which should not be treated as a rejection of the original offer. So acceptance by S took place at 1.34 p.m Monday. There was a binding contract

45. Von Hatz Feldt-Wildenburg v Alexander   “whether the execution of the further contract is a condition or term of the bargainor whether it is a mere expression of the desire of the parties as to the manner in which the transaction already agreed to will in fact go through. In the former case, there is no enforceable contract because the condition is unfulfilled or because the law does not recognize a contract to enter into a contract. In the latter case, there is a binding contract and reference to the more formal document may be ignored." (refer to Low Kar Yit)

46. Communication of Acceptance (a) s. 7(b)- expressed in usual and reasonable Mode. If the offeror did not prescribe mode of acceptance – usual and reasonable mode (b) s. 7(b) if the offeror prescribed the mode– use the mode prescribed; if offeree accepted in different mode – offeror may insist the offeree to make an acceptance in the prescribed mode.

47. If the offeror failed to inform the offeree that he wants new acceptance in the prescribed mode, the offeror is considered to have agreed to a different mode of acceptance. The objection must be made w/in reasonable time. (c) There must be positive act of acceptance -express or implied s. 2(b) …signifies his assent thereto…” Can be oral or written s. 3 –through conducts

48. Empirnall Holdings Pty Ltd v Machon Paul Partners Pty Ltd MPP undertake to do certain work for E. They forwarded a printed contract to E. E developer did not sign the contract. Progress payments were made to the architects consistent with the printed contract. Q- was there an acceptance?

49. Held: the developer’s conduct in making payments amounted to an acceptance of the architect’s offer, the terms of which were set out in the printed contract that he had forwarded to the developer. Silence is not an acceptance Felthouse v. Bindley F wanted to buy a horse from his nephew. F wrote a letter to him saying, “If I hear no more about him, I consider the horse mine..."

50. The nephew did not respond. Later the nephew’s live stocks were put for auction. He told B not to auction the horse. But B sold it by accident. F sued B for conversion Q-was F the owner of the horse? Held-no acceptance by his nephew, no contract, F not the owner, cannot sue B on ground of conversion