TUNKU ABDUL RAHMAN UNIVERSIYTY COLLEGEBBBL2113 INVESTMENT INDUSTRY LAWTUTORIAL 1: LAW OF CONTRACT (OFFER & ACCEPTANCE) 1) Issue (I): What2) Law (L): Section & Case Law3) Application (A): How to apply law onto the question4) Conclusion (C): No need to mention again the law1. (a) Ben makes an offer to sell his entire collection of his Cahflow Board Gameto Jess for RM100 and his offer shall expire after 7 days. On the 5th day, Benrevokes his offer and informs Jess about his decision. Discuss.Issue of question: Can Ben revokes his offer?First scenario – If Jess already accept Ben’s offer (L+A): According to S5 (1) CA 1950states that the proposer is allows to revoke his proposal at any time beforeacceptance is complete against him. Based on the situation given above, offer isexisted when Ben makes an offer to sell his entire collection of his Cahflow BoardGame to Jess and acceptance is assumed to be made by Jess. Therefore, Bencannot revoke his offer as his revocation took place after the acceptance made byJess. Second scenario – If Jess have not accepted Ben’s offer (L+A): According to S6(a)CA 1950 states that for notice of revocation to be effective it must come to theknowledge of the offeree before his acceptance of the offer. Based on thecircumstances given, Ben revokes his offer and informs Jess about his decision onthe 5thday and his revocation come to the knowledge of the offeree which is Jessbefore Jess accept the offer. Therefore, Ben can revoke his offer because hisrevocation come to the knowledge of the offeree which is Jess and before theacceptance take place.Conclusion: The revocation of Ben’s offer cannot be made by applying S5(1) CA1950. The revocation of Ben’s offer is complete by applying S6(a) CA 1950.(b) Would you answer be different if Ben has accepted from Jess a RM5 deposit tokeep his offer open? Issue of question: There is no offer and acceptance exist where Jess did not acceptthe offer as Jess only keep Ben’s offer open. Law + Application: When Ben accept the RM5, the revocation cannot be accepted asBen received RM5 from Jess to keep his offer open if Ben revokes his offer beforeexpiry of 7 days lead to breaching of law/consideration to keep his offer open.
Conclusion: Therefore, if Ben has accepted from Jess a RM5 deposit to keep hisoffer open, the revocation cannot be accepted.2. Consider the following facts: - 1st May – Ali in Alor Setar writes to Muthu in Johor and offers to sell his superbikeRX100 for RM15,000 to him. 3rd May – Muthu receives Ali’s letter of offer. In the afternoon of the same day, Muthuposts his acceptance letter together with his cheque for RM15,000 at the Johor postoffice. 6th May – Thinking that Muthu is not interested, he posts his revocation of his earlieroffer to Muthu and on the same day Ali sold his superbike to Ah Chong.