Question 1 :
a)
An agreement consists of offer and acceptance. If a contract does not have offer or
acceptance, the contract will be treated as a void contract. This can be seen in the case of
Affin Credit (Malaysia) Sdn Bhd v Yap Yuen Fui in the year 1984. In this case, due to the
lack of offer and acceptance, the court held that the acceptance is void from the beginning.
Offer can be defined as “an expression of willingness to contract with another” as in
Section 2(a) of Contract Act 1950. In the case of Goh and Hassan, Goh has made an offer to
sell his IBM computer to Hassan. Acceptance is a final and unqualified acceptance of the
terms of an offer. As per section 2(b) of Contract Act 1950, offer is said to be accepted when
the offeree signifies his assent.
The general rule of acceptance is that acceptance must be manifested which means
that acceptance must in words or conduct; silence will not amount to acceptance. This can be
seen from the case of Felthouse v Bindley in 1862. Here, Felthouse discussed buying a horse
from his nephew and mentioned that nephew’s silence will constitute to acceptance. Nephew
did not reply Felthouse but sold the horse to Bindley by mistake. The court held that
nephew’s silence did not bring to acceptance and there is not contract between them. Next,
acceptance must be expressed in usual and reasonable manner, given that there is no method
of acceptance is prescribed. In the situation above, Goh has stated the method of acceptance
in the offer, ergo Hassan has to use this method of acceptance that is express his acceptance
in writing and make sure the acceptance reach Goh’s office by 15 January 1993.
The first situation of the case of Goh and Hassan is when Hassan posted his letter of
acceptance on 10 January 1993, but the letter only arrives at Goh’s office on 16 January 1993.
The issue now is whether there is binding contract between them. Generally, acceptance by
post will be enforced by Postal Rule which says that acceptance takes place at the moment
when the letter of acceptance is dropped into the post box as per Section 4(2)(b) of Contract
Act 1950. This can be seen in the case of Adams v Lindsell in year 1818. In this case,
Lindsell wrote to Adams offering to sell goods at 2 September. Adams received the offer and
sent his letter of acceptance at 5 September. Lindsell received the acceptance at 9 September
but he sold the goods to third party by 8 September. The court held that a binding contract
was made when Adams posted his letter of acceptance at 5 September, so Lindsell was
breaching the contract.
However, Postal Rule is not sufficient in all cases, if there is prescribed manner in the
offer. This can be seen through the case of Holwell Securities Ltd v Hughes in year 1974.
Here, defendant made an offer to sell plaintiff a property. In the offer, there is stated that
notice in writing within six months in order to exercise the option. However, the letter of
acceptance was lost during posting and never received by the offeror. Judge Lawton LJ said
that offeree must exercise the conditions stipulated by offeror. For this reason, Postal Rule
cannot be applied when there are express terms in the offer specifying that acceptance must
reach the offeror within the time limit.
Applying the law and past cases to the situation above, Postal Rule is not sufficient in
this situation as there is an express term in Goh’s offer specified that acceptance in writing
must reach Goh’s office by 15 January 1993, but not afterwards. This is the term that Hassan
must fulfill. Although Hassan’s acceptance is in writing, but the acceptance did not reach
Goh’s office on time. Ergo, the act of acceptance done by Hassan is not a valid acceptance. In
conclusion, there is no binding contract between Goh and Hassan due to Hassan’s failure to
