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Sample Question: Contract

Rihanna offered to sell her diamond ring for RM45,000 by April 1. Taylor countered with RM40,000 via text on March 26. Rihanna did not reply. On March 28, Camilla agreed to pay the original RM45,000 price. Taylor now threatens to sue Rihanna for breach of contract. However, Taylor's counteroffer rejected Rihanna's original offer. Also, silence does not constitute acceptance under contract law. Therefore, no contract was formed between Rihanna and Taylor.

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333 views4 pages

Sample Question: Contract

Rihanna offered to sell her diamond ring for RM45,000 by April 1. Taylor countered with RM40,000 via text on March 26. Rihanna did not reply. On March 28, Camilla agreed to pay the original RM45,000 price. Taylor now threatens to sue Rihanna for breach of contract. However, Taylor's counteroffer rejected Rihanna's original offer. Also, silence does not constitute acceptance under contract law. Therefore, no contract was formed between Rihanna and Taylor.

Uploaded by

nurul izzati
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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SAMPLE QUESTION : CONTRACT

On 1 March 2020, Rihanna offered to sell her diamond ring to Taylor and Camilla for
RM45,000.00. The offer was valid until 1 April 2020 and whoever accepted the offer
first would get the ring. Taylor sent a text message to Rihanna on 26 March 2020
accepting to buy the ring at the price of RM 40,000.00. Rihanna read the text message
but did not reply. Camilla phoned Rihanna on 28 March 2020 and agreed to buy the
ring for RM45,000.00. Rihanna then sold the ring to Camilla. When Taylor heard
about this, she threatened to sue Rihanna for breach of Contract.
Advise Rihanna.

SAMPLE ANSWER:

ISSUE:

1) Whether there is a valid contract between Rihanna and Taylor when Taylor make a
counter offer?
2) Does silence of Rihanna is a valid acceptance when she does not reply the message?

RULES:

SECTION 2(b) of CA 1950

Defines acceptance as “the person to whom the proposal is made signifies his assent, the
proposal is said to be accepted”

It means, once there is an acceptance, agreement between the parties is created. A contract
exists and it is binding upon the parties.

SECTION 7(a) of CA 1950

“the acceptance must be made on exactly the same terms as proposed without
modifications or variation. It should be absolute and unqualified.”

For a proposal to be converted to a promise, the acceptance of that proposal must be


absolute and unqualified. In order to convert a proposal into a promise the acceptance must
be absolute and unqualified.
 Acceptance must fit or match the offer
 It must be accepted according to the terms of the contract. It must not change
the terms of the offer
 Any modification of the terms will destroy the validity of such acceptance
 Ex: price, types of goods

SECTION 7 (b) of CA 1950


Silence does not constitute a valid acceptance. It requires a positive act of acceptance

FELTHOUSE V BINDLEY (1862

Plaintiff said that “If I hear no more about him, I consider the horse mine at $40” The
nephew did not reply the letter, thus the nephew’s acceptance had not been communicated to
the uncle and therefore the horse did not belong to him. The contract did not exist because
silence is not an acceptance. It requires a positive act of acceptance according to the section
7(b) of CA 1950.

PROPOSAL TO BE DISTINGUISHED FROM COUNTER OFFER

• Situation whereby after a proposal has been made, suddenly either one of the party
make a new proposal.
• If any new changes have been made to the proposal, this is also a counter proposal.
• It is treated as REJECTION of the original proposal.
• The offeror can either accept or reject the new offer
• The original offer becomes automatically revoked .
• Example:
When Janna makes a proposal to Ayda, Ayda has the choice to accept or to reject it.
But if Ayda makes a new proposal by changing the vital terms of the contract
(example, price of the goods or type of the goods) Ayda is said to have a counter-
offer.
• Effects of counter-offer are:
- Janna’s original proposal or offer is destroyed and it can no longer be accepted.
- Janna has become the acceptor while Ayda has become the proposer.
- Janna has the choice either to accept or to reject Ayda’s proposal.

HYDE V WRENCH [1840]

The defendant offered to sell a piece of land to plaintiff for $1000 on 6th of June. The plaintiff
made a counter offer to purchase at $950 on 8th of June. However, the defendant refused to
accept the new price. The plaintiff then immediately wrote to the defendant accepting the
original offer of $1000 on 27th of June.

The court held that there was no acceptance because the plaintiff’s letter on 8th June had
rejected the original offer and no to be revived. Therefore, there was no valid contract.

APPLICATION:

 The original offer to Rihanna is not valid because:


Counter offer was exist on 26 February 2020, when Taylor sent a message to Rihanna that
she wants to buy the ring at RM40,000 instead of RM45,000 (the actual price made by
Rihanna). So, the original proposal made by Rihanna was destroyed, and it cannot be longer
accepted. Rihanna become the acceptor while Taylor has become the proposer. So, Rihanna
has an option to choose either to accept or reject Taylor’s counter offer.

It shows that Rihanna do not accept the new proposal made by Taylor and Rihanna did not
breach the contract as the first contract made on 1 March is already destroyed and invalid for
Taylor’s to claim for breach of contract.

 Acceptance of proposal is not complete because:


When Rihanna do not reply or keep silence after received text message from Taylor, it does
not consider as valid acceptance as it need an act for acceptance. Taylor cannot sue Rihanna
as she considered Rihanna agree with her new proposal because Rihanna only silent and not
showing any act. Thus, silence on the part of Rihanna does not constitute as a valid
acceptance.

CONCLUSION
In conclusion, Taylor cannot sue Rihanna because the original offer between Taylor
and Rihanna was destroyed when Taylor made the counter offer to Rihanna which the price
ring offer at RM40,000.00. So, such original offer cannot be longer accepted as it is treated as
REJECTION of the original proposal once counter offer has been made. Therefore, Taylor
has no right to sue Rihanna for breach of contract as the contract between Rihanna and Taylor
was never exist.

When Rihanna did not reply after received text message from Taylor, it does not consider as
valid acceptance as it require an act for acceptance. Taylor cannot consider Rihanna agree
with her new proposal because Rihanna only silent and such silence does not constitute as a
valid acceptance. So, Taylor has no right to sue Rihanna for breach of contract as contract
never exist between them.

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