Invitation to Treat Essay Sample

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Mary wet shopping at Maidon Bhd and was attracted to a VCD ‘Chalte Chalte’ displayed on the shelves. Mary looked at the price tag of the VCD and saw that it cost RM15. Mary went to the cashier’s counter to pay for the VCD. The cashier informs her that the actual price of the item was RM45, not RM15. Mary instead that Maidon Bhd had to sell the VCD to her at RM15 as there was a contract between them. Advise both parties. Answer:

1)Whether there is contract between Mary and Maidon Bhd. Principle
To identify whether there is a contract in this cases, first of all, we need to looked at is whether there is an agreement between Mary and Maidon Bhd. Agreement should be occur if there is a proposal or acceptance. According to section 2(a) of the Contract Act 1950, proposal can be defined when one person signifies to another his willingness to do or to abstain from doing anything, with a view t obtaining the assent of that other to the act or abstinence. For example, A says to B that he wants to sell his car to B for certain price with the hope that B will buy his car. Here, A is said to make an offer or proposal as the indicates his willingness to sell. A is called an offerror or proposer and B is called the offerree or acceptor. Meanwhile, acceptance can defined according to section 2(b) as a person who accept the Application

In this problem, an invitation to treat was made by Maidon Bhd when they the VCD ‘Chalte Chalte’ on the shelves. The Maidon Bhd is inviting customers to make a proposal to them. When customers take the VCD to the cashiers counter, they are actually making the proposal and now it up to theMaidon Bhd to accept it or not. Hence, proposal is made by Mary when he took the VCD ‘chalte chalte’ which is the price tag show amount of RM15 to the cashier. It show the Mary willingness or desire to buy that VCD at the price stated with the hope that Maidon Bhd will sell it to him at the price. So, Mary is a proposer. The contract will only come into existence if the one who makes the invitation to treat. For example, the supermarket accepts the proposal by the customer, Maidon Bhd. It can be prove if based on the cases
of Great Britain v Boots Cash Chemist Ltd. [1953] 1 Q.B. 401.

In this case, the court held that display of goods is only an invitation to treat. Proposal is made by the customer when he takes the goods off the shelf and put the good in a basket. Contract is only concluded at the cashier if the proposal of the customer is accepted by the cashier. Therefore, the shop owner was not offering for sale poison which was prohibited by statute. FISHER v BELL [1960] 3 ALL E.R. 731

Lord Parke said that”it is perfectly clear that according to the ordinary law of contract the display of an article with a price on it in a shop window is merely an invitation to treat. It is in no sense an offer for sale, the acceptance of which constitutes a contract”.

In Mary case, it is totally clear that Mary is the proposer. The next issue is whether Maidon Bhd had accepted Mary proposal. According to section 2(b) acceptance is valid when one person to whom the proposal is made represents his assent himself. Where in order to form a valid contract, once an offer or proposal is made by the offeror, there must be acceptance from the offeree. Where acceptance is the offeree approves of the offer or agrees to adopt the conditions of the offer. When acceptance is made and agreement is created between the parties the contract is valid. But in the question state that it was clear that Maidon Bhd did not accept the Mary proposal to buy the VCD at price of RM 15. It was support when Maidon Bhd had informed the actual price of the VCD was RM 45 which actually a counter offer and not acceptance as in the case of In this case, the Defendant offered to sell a farm to the plaintiff for £1,000. The plaintiff said he would give £950 for the farm. The defendant refused and later, the plaintiff said that he agreed to pay £1,000.

In Stevenson, Jacques case state that, the Defendant offered to sell iron at 40s per ton. The Plaintiff sent a telegram to the Defendant saying “Please answer whether you would accept the payment for the delivery over 2 months or if not, the longest limit that you would give”. There was no response from the Defendant and the Defendant then sold the iron to another purchaser thinking that the Plaintiff had rejected the offer. The court held that the plaintiff did not make a counter-offer. The telegram was only an inquiry which should have been answered by the Defendant and could not be treated as a rejection to the offer.

When the offer is made by the customer, it is entirely up to the cashier at the counter to make an acceptance or to refuse the customer offer. A contract only concludes when the cashier accepts the offer by customers. Therefore, as there is no acceptance by Maidon Bhd, no agreement exists and consequently no contract between Mary and Maidon Bhd.

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