An offer / proposal are
necessarily for the formation of an agreement. Section 2(a) of Contracts
Act 1950 said when person signifies to another his willingness to do /
to abstain from doing anything, with a view to obtaining the assent of
that other to act / abstinence, he is said to make a proposal and
invitation to treat means an invitation to make an offer.
A)
There are many distinguishing between offer and invitation to treat. The
first distinguishing is from meanings. Offer is an expression of
willingness to contract on certain terms made with the intention that it
shall become binding as soon as it is accepted by the person to whom it
is addressed, the offeree. Invitation to treat different with offer it
means an invitation to make an offer. An invitation to treat is not an
offer, but an indication of a person's willingness to negotiate a
contract. Based on the case:
COELHO v. THE PUBLIC SERVICES COMMISSION[1964] M.L.J.12
In
this case, the applicant, a Health Inspector under the Town Board,
Tanjong Malim, applied for the post of Assistant Passport Officer in the
Federation of Malaya Government Oversea Missions advertised in the
Malay Mail dated 19 February 1957. Consequently, the applicant was
informed that he was accepted and, after undergoing training, he was
posted to the Immigration Office, Kuala Lumpur, where he remained until
December 1958 when he was transferred to the Immigration Office at Johor
Bahru.
On 5 November 1959, the Secretary to the Public Services
Commission in a letter addressed to the applicant as 'Assistant Passport
Officer on Probation' informed him that, following a report from the
Controller of Immigration concerning his conduct in the irregular issue
of certain passports, disciplinary action was being taken against him
with a view to his dismissal. The applicant made representation as
invited by the said letter and, on 24 December 1959, the applicant was
informed that the respondent had decided that he should not be dismissed
but that his appointment on probation be terminated forthwith by
payment of one month's salary in lieu of notice.
The applicant
now moved the court for an order of certiorari to quash the decision of
the respondents on the grounds of error in law, want of jurisdiction,
and failure to observe the principles of natural justice. (An order of
certiorari is an order of the court directing that something be done; in
this case, the court order applied for was one directing that the
decision of the respondents be overturned).
It was held that:
1. That the Malay Mail advertisement was an invitation to qualified persons to apply and the resulting applications were offers.
2.
The information conveyed to the applicant was an unqualified acceptance
to join the overseas mission and he so understood it.
B) Second
distinction between offer and invitation to treat is an offer maybe
made orally in writing or by conduct such as example of an offer made by
conduct is where a customer in a supermarket chooses goods and hands
them to the cashier, who then accepts the customer's offer to buy.
Invitation to treat may made by displaying goods in shop windows, on
shelves, advertisement, tender / auction or a statement of price. Based
on the case of:
PHARMACEUTICAL SOCIETY OF GREAT BRITAIN v. BOOTS CASH CHEMIST LTD[1953] 1 A11 ER 482.
In
this case the Defendant was being charged for failing to comply with
one of the Great Britain Laws, i.e. The Pharmacy and Poisons Act, 1933
which stated that it was illegal to sell specified poisons without under
supervision by registered pharmacist. The Defendant operated
self-service shop where a customer may select any goods, which were
being display in the shop. When the customer has picked the goods, after
that, the payment was to be made at the cashier's desk. At the
cashier's desk, the operator of the shop can't stop the transaction
since the display of goods as regarded as proposal and when the customer
picked the goods as regarded as acceptance, therefore, the self-service
shop failed to comply the above-said law.
The self-service shop
operated according to the above-said law display of goods only be
regarded as invitation to treat and the customer was the one who made
the proposal. Later on, at the cashier's desk a registered pharmacist
supervised the transaction and was given authority to refuse the
contract of sale, if violated any provisions in the above-said law.
It
was held that the Defendant was not made an illegal sale since display
of goods only be regarded as invitation to treat and the customer was
the one who made the proposal. Later on, at the cashier's desk a
registered pharmacist supervised the transaction and was given authority
to refuse the contract of sale, if violated any provisions in the
above-said law.
C) Another is an offer have a termination. There
is based on counter-proposal, by using notice of revocation, lapse of
time, by failure of acceptor to fulfill a condition precedent to
acceptance and by the death of mental disorder of the proposer. For an
invitation to treat there is no circumstances or conditions to
termination a proposal. The termination of proposal is based on cased:
MACON WORKS AND TRADING SDN BHD v. PHANG HON CHIN & ANOR[1976] 2 M.L.J. 177.
In
this case, the defendants gave an option to A her nominees to purchase a
piece of land. The option was exercisable only after one LK showed no
more interest in the land. The plaintiff's, A's nominee, exercised the
option and claimed specific performance. The defendant resisted,
contending inter alia, that the offer had already lapsed.
It was
held that where no time was fixed, an offer would lapse after the
expiration of a reasonable time (section 47 of the Contracts Act 1950).
What is reasonable is a question of fact depending on the actual
circumstances of each case and the nature of the business. Failure to
accept within a reasonable time implies rejection by the offeree.
D)
Otherwise, an invitation to treat is an action inviting other parties
to make an offer to form a contract and it just a first step to
negotiate, or indication of a person's willingness to negotiate a
contract but an offer is a creates a binding contract, subject to
compliance with the terms of the offer. It refers to the case:
M & J FROZEN FOOD SDN. BHD & ANOR v. SILAND SDN BHD & ANOR[1994] 1 M.L.J. 303.
In
this case that Siland Sdn. Bhd (the first respondent) was the
registered owner of a piece of land which it charged to the second
appellant, Eu Finance Bhd. Due to a default on the part of the first
respondent, the second appellant applied to the senior assistant
registrar
(the SAR) and obtained an order for sale of the property by public
auction. M & J Frozen Food (the first appellant) was the highest
bidder and was pronounced the purchaser of the property. The first
appellant paid a 25% deposit of the total purchase price as provided
under the conditions of sale, while the balance of purchase money was to
be paid into court within 30 days from the date of sale. However, this
was not done.
It was held that the provisions of the National
Land Code 1965 showed that the sale at this juncture (at the fall of
hammer) had only be concluded in the sense that the goods would no
longer be offered for a sale to prospective buyers and the successful
bidder could not be permitted to retract his acceptance. Thereafter,
each party to the contract of sale must perform his part of the
obligation and until then no executed or actual sale had been concluded.
Therefore a reference to a sale being concluded at the fall of the
auctioneer's hammer could only refer to that stage of the transaction of
sale when there was concluded an agreement between the vendor and the
highest bidder, the former to sell and the latter to purchase the goods.
E)
In addition, statement of price is not necessarily an offer because
offer only has a termination on proposal between invitations to treat;
statement of price is necessarily in an invitation to treat. It referred
to the case of:
HARVEY v. FACEY[1893] AC 552.
In the case
that the plaintiff telegraphed to the defendant, 'Will you sell us
Bumper Hall Pen?' 'Telegraph lowest cash price'. Defendant telegraphed
in reply 'Lowest price for Bumper Hall Pen $900. The plaintiff then
replied 'We agree to buy Bumper Hall Pen for $900 asked by you. Please
send your title deeds. No reply from the defendant. Plaintiff claimed
that there was a contract between himself and the defendant.
It
was held that there was no contract. The second telegram was not an
offer but in the nature of an invitation to treat. The final message
could not be looked upon as an acceptance.
F) Offer involved one
party (unilateral) or more parties (bilateral). Bilateral contract is an
agreement in which each of the parties to the contract make a promise
or promise to the specific person and public at large. On the invitation
to treat it only involve to the one party (unilateral). It means that
only one party, make an offer but it depends to a person to form a
contract. It based on case of:
CARLILL v. CARBOLIC SMOKE BALL CO. LTD[1893] 1 QB 256.
Facts
of the case that the defendant made an advertisement in the newspaper
where the defendant willing to pay 100.00 Pounds to anyone who still
suffering influenza after taking the medicine according to the
prescription sold by the defendant. On top that the defendant has
deposited 1000.00 Pounds in the special account in the Alliance Bank for
the above-mentioned purposes. The plaintiff used the above-said
medicine, unfortunately, she still suffering the influenza. Then, the
plaintiff asked for the compensation that had been promised by the
defendant in the newspaper.
It was held that the plaintiff was
entitled for the promise that amount 100.00 Pounds made by the defendant
since the defendant's advertisement being considered as proposal
addressed to public at large and the plaintiff has accepted the proposal
by purchased the medicine and used the medicine according to
prescription. The defendant advertisement being considered as proposal
because in the advertisement there was an element of willingness where
the defendant has deposited money that amount 1000.00 Pounds in special
account in the Alliance Bank for the above said purposes.
G) The
offer must be communicated to the offeree if the offeror want to revoke
his or her proposal before it can be accepted and the offeror will bind
to a legal after the acceptance but invitation to treat there is does
not communicated before the acceptance and the invitation to treat can
revoke anytime without mention to another party. It based on cased:
BANQUE PARIBAS v. CITIBANK NA[1989] 1 M.L.J. 329, CA.
In
this case, a company, Selco Salvage Ltd, wrote a letter dated 14
October 1985, offering to sell to the respondents the salvage claims in
respect of nine vessels. By a letter dated 31 October 1985, Selco
offered to sell to the appellants salvage claims in respects of five
vessels which were also part of the nine salvage claims offered for a
sale in their 14 October 1985 letter to the respondents. The appellants
accepted the offer and purchased those five salvage claims.
Subsequently, on 7 November 1985, Selco again wrote to the respondents
offering to sell their salvage claims in respect of four vessels which
were listed in the 14 October 1985 letter. They further stated in their
letter that ' this letter will supersede our previous letter dated 14
October 1985'. The respondents accepted the offer and purchased the
salvage claims regarding these four vessels. A dispute arose between the
appellants and the respondents as to the ownership in respect of the
five salvage claims and the respondents claimed that on 20 November
1985, they had purchased the five salvage claims without any notice of
the appellant's prior purchase of them from Selco. The respondents
agreed that although they purchased the salvage claims of four vessels
on 7 November 1985, Selco's offer to sell the balance five salvage
claims contained in the 14 October 1985 letter still remained open and
available for acceptance by them, and that they finally accepted the
offer on 20 November 1985.
It was held that the 7 November 1985
letter written by Selco to the respondents contained the vital paragraph
namely, 'this letter will supersede our previous letter dated 14
October 1985'. The only meaning one can give to this paragraph is that
the 14 October letter had been replaced or substituted by the 7 November
letter. The effect of that is any offer contained in the 14 October
letter which had not been accepted had been withdrawn. Selco had, on 7
November 1985, in clear and unequivocal terms, withdrawn or cancelled
the offer contained in the 14 October letter and henceforth there was no
offer which remained upon and available for acceptance by the
respondents on 20 November 1985 or any other date. Where the
communication of acceptance is made by the acceptor through a course of
transmission such as post, telegraph, telegram, then the communication
of the acceptance is deemed complete as against the proposer, when it is
put into a course of transmission to him, so as to be out the power of
the acceptor.
