Preston Corporation Sdn Bhd V Edward Leong Case Study

Question 2

Identification of issues:

Whether there exists a valid contact between Puan Sri Auggur and Datin Ciku?

Explanation of the Law: According to Contracts Act 1950, s. 2 (h) an agreement which is legally binding between the parties is a contract. Based on the Contracts Act 1950, s. 2 (g) a contract can be void when an agreement not enforceable by law. In the Contracts Act 1950, s. 2 (a) when a person express of willingness to do or not to do for doing anything in order to get the second party’s consent of that abstinence or act. As following is a case which is Preston Corporation Sdn Bhd v. Edward Leong [1982] 2 MLJ 22 to support s. 2(a) of Contracts Act 1950 in this case, the appellant publishers asked for quotations from the respondent

“In order to convert a proposal into a promise the acceptance must be absolute and unqualified.” - Under the Contracts Act 1950, s. 7(a) it must be accepted in exactly the same terms of the proposal. The rules are that any offeree which is qualified by any modification to the terms or the introduction of new term can be considered as a counter-offer. It indicated the offeree wishes to contract upon terms or conditions different from those contained in the offer. It is not an unambiguous acceptance of the original offer and the effect of the counter proposal operates as a rejection of the original proposal which cannot be rebound and subsequently accepted.

Hyde v. Wrench [1840] 3 Beav. 334 cases where the defendant (D) offered to sell his farm to the plaintiff (P) for £1,000. The P replied he offered £950 by made a counter-proposal which the D rejected. The P then seeks to accept the original offered of £1,000. The D refused to sell and the P brought an action for specific performance. Court held that there was no acceptance had occurred because the P letter is a counter offer had rejected the original offer which could not be rebound and subsequently accepted, it is no longer open to the offeree to