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Business Law. Proposal & Acceptance Tutorial 2 & 3. Question 1. Ken is doing his weekly shopping for groceries in Star supermarket. When would the contract for the sale of ‘his’ groceries come into existence? (10 marks). Answer. Identification of Issues

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business law

Business Law

Proposal & Acceptance

Tutorial 2 & 3

question 1
Question 1
  • Ken is doing his weekly shopping for groceries in Star supermarket. When would the contract for the sale of ‘his’ groceries come into existence?

(10 marks)

  • Identification of Issues
    • When does the contract between Ken and Star Supermarket come into existence?
  • Explanation of the law
    • State the legal principles
      • Define ITT: An invitation to enter into negotiation
      • State the difference between ITT and a proposal with relevant cases: The difference lies in the intention of the parties
    • Explain that display of goods in supermarket shelves amounts to ITT with relevant cases:
      • Pharmaceutical Society of Great Britain v Boots Cash Chemist Ltd. (1953)
      • Fisher v Bell (1961)
  •  Application of the Law
    • State when the contract takes place on the facts of the question i.e. who makes the ITT, who makes the offer and when the contract is concluded
  •  Concluding Advice
    • Contract is formed at the cashier
question 2
Question 2
  • Sony writes to Ron and offers to sell his trumpet for RM800. One week later, Ron writes to Sony accepting the offer despite knowing that Sony had died in a tragic car accident. Explain whether a contract exists between Sony and Ron.

(10 marks)

  • Identification of Issues
    • Whether there is a valid contract between Sony and Ron?
  • Explanation of the law
    • Legal Principles – s6(d) CA 1950 states that a proposal is revoked by the death or mental disorder of the proposer, if the fact of his death or mental disorder comes to the knowledge of the acceptor before acceptance
  • Application of the Law
    • Application of the legal principles – Applying s6(d) CA 1950, Ron had knowledge of Sony’s death before acceptance thus there is no contract between Sony and Ron because the proposal is deemed to be terminated
  • Concluding Advice
    • No contract
question 3
Question 3
  • Pat lost her cat, Mimi. She advertised in the newspaper offering to any person who returns Mimi to her. Range found Mimi and returned the cat to Pat but without knowledge of the reward. Will range be entitled to the reward upon reading about it in the newspaper?

(10 marks)

  • Identification of Issues
    • Whether Range can claim the reward?
  • Explanation of the law
    • S2(a) CA 1950, the word “signify” means proposal must be communicated. S4(1) CA 1950 states that proposal is communicated when it is brought to the knowledge of the acceptor as illustrated in the case of R v Clarke (1927)
  • Application of the Law
    • Applying s4(1) CA 1950, Range had no knowledge of the reward when she returned the cat to Pat thus Range is not entitled to the reward offered by Pat
  • Concluding Advice
    • No contract
question 4
Question 4
  • Merry promises his friend Pippin RM1000, if Pippin stops smoking for a year. When Pippin has not smoked for 3 months, Merry tells him that the offer is withdrawn.

(10 marks)

question 5
Question 5
  • Ali sees a suitcase in a shop window with a price tag of RM20. He goes into the shop to buy the suitcase and is told that the wrong label has been attached & that the price is RM30. Advise Ali.

(10 marks)

question 6
Question 6
  • Describe the ways in which a contractual offer can be brought to an end.

(15 marks)

question 7
Question 7
  • E offered to sell his car to F for RM3000 & said, 'I will give you 3 days to make up your mind.' Before the 3 days were up F heard from a friend in casual conversation that E had sold the car to X. F immediately posted a letter accepting the offer. Advise F

(15 marks)

question 8
Question 8
  • Ah Long is a final year accounting student. He wants to sell his laptop computer before the end of February: On 14 Feb, Betty telephones Ah Long and says, “There is no doubt that I could afford to buy this laptop if I pay for it in 2 installments, but it would be very difficult for me to pay RM3,000 now.” Ah Long does not reply to Betty. What is the effect of the telephone call made by Betty to Ah Long?

(15 marks)

question 9
Question 9
  • Albert has an assortment of shoes in his shop window, each pair has a price tag on it showing the price of RM10. Brenda sees a pair in the shop window and wants to buy them. In the window is a large notice which reads, ‘Special offer, superb shoe sale, all untagged shoes RM7’. Brenda asks Albert for a pair of tagged shoes for RM10 and a pair of the RM7 shoes. Albert informs Brenda there has been a mistake and the price on the tagged shoes should read RM90 and the special offer shoes are RM50. Advise Brenda whether or not she can have the shoes at the lower price.

(25 marks)

question 10
Question 10
  • Bo writes to Sam offering to sell his trumpet for RM1,500. Sam accepts the offer but only if the price is reduced to RM800. Bo is not willing to sell the trumpet for RM800. Sam then writes to Bo agreeing to buy the trumpet for RM1,500. Advise Bo as to whether he is bound to sell the trumpet to Sam.

(10 marks)

  • Identification of Issues
    • Is there a contract between Bo and Sam?
  • Explanation of the law
    • Acceptance must be absolute and unqualified as stated in s7(a) CA 1950
    • Case – Hyde v Wrench
  • Application of the Law
    • Discuss whether Sam’s offer is absolute and unqualified or is it a counter-offer and what is the consequence
  • Concluding Advice
    • No contract
question 11
Question 11
  • H advertised in a variety of journals that an auction of paintings would take place on 30 March. J attended the auction and bid RM1000 for a painting. He changed his mind and called out, ”Bid withdrawn”. The auctioneer did not hear him and banged his hammer for the third time. Advise H

(10 marks)