In order for any contract to be enforceable, courts generally require three things: mutual

assent (agreement to the contract terms), a valid offer and acceptance, and
consideration. Based on the scenario given, several issues were identified and will be
discussed in detail below according to the elements of contract mentioned.
Issue 1: Wheter Jojo made an Offer or Invitation to treat by displaying the
painting in his art gallery?
A proposal must be distinguished from an invitation to treat. Invitation to treat is only an
effort to invite others to make an offer and enter into negotiation but not capable of
being accepted so as to create a binding agreement. It allows multiple offers and it is up
to the person making the invitation to accept or reject the offers. A common example of
an invitation to treat is a display of goods for sale in a shop similar to the Jojos
situation.
The Contracts Act does not contain any provision with respect to invitation to treat thus
English Law is applicable. A case in point is Pharmaceutical Society of Great Britain
v. Boots Cash Chemist Ltd1 In this case, the issue was whether a display of drugs on
the shelves of a pharmacy amounted to an offer, which was accepted when the
customer took it and placed it in a wire basket. The court held that the display of the
drugs did not amount to an offer. It was a mere invitation to treat. Another case to
support this principle is Fisher v Bell2, where in this case it was held that the flick knife
with price tag displayed in the shop windows were held as merely an invitation to treat.
Hence, based on the two above mentioned precedence, the painting displayed in the
Jojos art gallery priced RM 60,000.00 is an invitation to treat (preliminary proposal) and
not an offer.
Issue 2: Alexs and Kevins intention to buy the painting are offers or counter
offer?
It had been established in the first issue that, the displayed painting is an invitation to
treat. So, Alexs and Kevins proposal to buy the painting is an offers made by them to
Jojo.
An offer is one of the essential ingredients of a valid contract. It is a manifestation of an
intent to be contractually bound upon acceptance by another party. S2(a) Contracts Act
1950 states that an offer is a promise or proposal by a person (offeror) to another
person (offeree) with intention to create legally binding relationship and the offer can be
made by words, conduct, an act or abstinence Relating to the current scenario Alexs
and Kevins intention to purchase the painting for RM50,000 and RM55,000 respectively
from Jojo are proposals (offers).

1
2

[1953] 1 QB 401
[1961] 1 QB 394

An offer creates in the Offeree the power to form a contract by an appropriate

acceptance. When, Alex and Kevin make a proposal to buy the painting from Jojo, it
makes them the Offerors offering to buy from Jojo, the Offeree.
Counter Offer arises when the offeree purportedly accepts an offer with some
modification made to the said offer. A counter-proposal has the effect of rejecting the
original proposal. For example, if Jojo offers Alex to buy the painting for RM55,000
instead of RM50,000 as offered earlier by Alex, the offer made by Jojo is a counter
offer. An offer by Kevin is not a counter offer to Alexs offer because both of them are
Offerors. Hence, in the current situation, there was no counter offer occurred in any
situation.
Issue 3: Was the Offer made by Alex and Kevin valid?
First of all, one would like to establish that, Kevin is allowed to make an offer to Jojo
even though Alex made an offer earlier because an invitation to treat allows multiple
offers and not forgetting that by accepting an invitation to treat is only making an offer
which is not necessarily intended to be bound. So in general both Alex and Kevin is just
making an offer to buy the painting from Jojo, these offers and not legally binding until
theres a acceptance by Jojo to either of them.
There are conditions to be fulfilled for an offer to be valid. First of all it must be definite
and clear to avoid any doubt or discrepancies. If the terms of the offer are vague and
unclear, it will not be a valid offer. The case of Gunthing v Lynn (1831) provides an
illustration. In this case, an offer to pay an additional amount if the horse proved lucky
was held to be too vague. In the current situation, both Alex and Kevin had made a
clear offer to Jojo to buy the painting for RM50,000.00 and RM60,000.00 respectively
without any vagueness.
Then, the offer must be seriously intended. S9 of the Contracts Act mentions that a
proposal should be made either expressively of impliedly. S 9 should be read in
conjunction with S3 and R v Clarke3 where it explains that an offer made by the Offeror
should be communicated to the Offeree. In the current situation, Alex and Kevin had
communicated the offer to Jojo in words, i.e. expressively.
Finally S4 (1) implies that the communication of the said proposal in complete when it
comes to the knowledge of the offeree. The offer made by Alex is deemed to be
complete when Jojo became aware of it. According to the current circumstances, Jojo is
well aware and understood that Alex offered to buy the painting for RM50,000.00 and
Kevin offered RM60,000.00.
Based on the related sections and precedence discussed, it can be concluded that the
offer made by both Alex and Kevin are valid.

(1927) 40 CLR 227

Issue 4: Was there an acceptance by Jojo to Alexs and Kevins offer?

Alex
Based on the current situation, it appears that Jojo did not respond Alexs offer, though
it was communicated to him clearly as discussed above. This shows that there was no
acceptance to Alexs offer at that time.
Being silent does not constitute acceptance because an offeree who does nothing in
respect to an offer is not bound by the terms of that offer. The offeror cannot impose
silence as an acceptance by the offeree. Here it means, Alex cannot infer Jojos silence
as acceptance to his offer. This principle was established in A case in point is Fraser v
Everett4 and Felthouse v. Bindley (1862) where it was held that there is no rule of law
like saying Silence gives consent.
An Acceptance, like an offer must be communicated as mentioned under Section 3 and
a communication of acceptance is deemed to be complete only when it comes to the
knowledge of the Offeror. Here, it is clear as there was no communication took place
between Jojo and Alex in regards of the offer made. S7, also clearly emphasize on the
fact that an acceptance by an offeree must be absolute and unqualified as well as to be
expressed in a usual or reasonable manner. Jojo, did not express his acceptance in any
usual or reasonable manner because, as discussed earlier, silence do not constitutes
consent.
Kevin
Kevin made an offer to Jojo, and his offer is as valid as Alexs as already discussed
above. The difference here is that, Jojo had verbally expressed that he needs time to
consider Kevins offer unlike to Alex, he was silent which did not constitute acceptance.
In ones opinion, the request for time by Jojo to decide on Kevins offer constitutes as a
negotiation, as held in Lau Brothers & Co v China Pacific Navigation Co. Ltd 5. The
correspondence between the parties in the said case were said to be in negotiation
stage and not bound to be an acceptance, thus there was no contractual relationship
between the two parties. Hence in the current situation, Jojo could be said to be in
negotiation stage when he expressed to Kevin that he needs time to decide on the offer.
This cannot be deemed as an acceptance, thus no contract materialized at this point of
time.
So for both Alex and Kevin, they are not bound by any contract yet because there was
no valid acceptance by Jojo to their offer at that point of time.
Kevins claim that there was a contract between him and Jojo is irrelevant and invalid
because his offer to Jojo, ended at the negotiation stage and did not proceed to
4
5

[1889] 4 Ky 512
[1965] 31 MLJ 1

conclusion of contract since, Jojo did not expressly accept Kevins offer. Jojo accepted
Alexs offer.
Issue 5: Was Alexs offer still valid when Jojo accepted it after Kevin left?
The offer made by Alex was still valid and remains open because it was not revoked by
any means as stated in S6 (a) and (b). S6 (a) explains that there should be a notice of
revocation communicated between the parties for the offer to be revoked. Here, there
was no such notice communicated by Alex to Jojo that would indicate a revocation.
The offer remains open until the expiration of its specified time period or, if there is no
time limit, until a reasonable time has elapsed. A reasonable time is determined
according to what a reasonable person would consider sufficient time to accept the
offer. The rule that acceptance must be made within reasonable time is embodied in S6
(b) which reads a proposal is revoked by the lapse of the time prescribed in the
proposal for its acceptance or if no time is so prescribed by the lapse of a reasonable
time without communication of the acceptance. Jojos acceptance to Alexs offer was
made in reasonable time and is sufficient to accept the offer. He decided to accept the
offer in matter of hours not months as in Ramsgate Victoria Hotel Co Ltd v
Montefiore6 case. In this case it was held that the offer to purchase shares had not
been accepted within reasonable time, the period between June and November was
clearly not reasonable and the offer had therefore lapsed. Hence there was no contract.
So, it can be concluded that Alexs offer was still valid (open) at the time Jojo accepted
and the acceptance is deemed to be valid because it was made within reasonable time.
Apart from that one can establish that the acceptance was expressively communicated
as deemed by S3, S4 and S9 of the Contracts Act.
S7 (a) requires the acceptance to be absolute and unqualified. This means acceptance
must be made on exactly the same terms as proposed without modifications or
variations. A common law principle that relates to this is the mirror image rule. This
rule encapsulates in this current situation because the offer had been accepted by Jojo
as offered by Alex, that is to agree to sell the painting for RM50,000 without any
modification.
Hence since theres a valid offer and a valid acceptance, it is a clear situation where a
contract had been concluded between Jojo and Alex.
Issue 6: Was the payment of RM40,000 valid?
According to this situation, Alex owes RM10,000 and promised to pay in two week time.
However, that did not materialize because later Alex informed that he will not be able to
pay the balance of RM10,000. Jojo agreed the part payment of RM40,000 as full
6

LR 1 Ex 109

payment for the painting sold to Alex. In other words Jojo had waived his right to obtain
the balance money from Alex.
Firstly, when both parties mutually agrees to the change of terms of a contract, it is
rendered to be still valid. The parties to a completed and binding contract are free to
change the terms of the contract. In ones opinion, the fact that Jojo accepted the
payment of RM40,000 from Alex, shows that both of them had mutually agreed on the
new amount
Secondly, consideration is an important element of a contract. It can be anything of
value which each party must agree to exchange in order to make a contract valid. Under
the Common Law, contract which are not supported by consideration are generally not
enforceable. In fact, the requirement of consideration is what distinguishes a contract
from a mere gift. If one party merely promises goods to another party without requiring
them to do something in exchange, the transaction would be a gift and not a contract.
So, the fact that in exchange of the painting, Alex paid RM40,000 to Jojo despite the
value, it is important to establish that a consideration present to negate other ideas such
as theft or gift. Here, Alex had paid the sum as agreed by Jojo in order to obtain
painting.
Under the Malaysian Law, S26 of the Contract Acts explains that without consideration
an agreement is void. Again, the RM40,000 is a proof that the contract concluded
between Jojo and Alex is valid and not void.
Explanation 2 to the same section further elaborates that consideration need not to be
adequate and illustrated in llustration (f). In this illustration it explains that A agrees to
sell a horse worth RM1000 for RM 10. This is an another example to support the
current situation where, Jojo accepted the payment of RM40,000 as sufficient for the
painting. Jojo deemed the RM40,00 to be adequate consideration for the painting.
Cases to support this point are Chappell & Co Ltd v Nestle7 where wrappers of
chocolate bars were held as part of the consideration.

Hence, based on the sections and cases supported, it appears that the RM 40,000
accepted by Jojo is valid.
Issue 7: Was Alex legally bound to pay Jojo the balance RM10,000 when Jojo
requested later?
Since the contract had been concluded when the amount of RM 40,000 paid and Jojo
had expressively mentioned that amount paid is sufficient, the contract is concluded.
For Jojo to ask Alex to pay the amount of RM10,000 after the said is contract had been
performed is irrelevant. Legally Alex is not bound to pay the money however, based on
ethics Alex should consider to repay the balance since he have the money now. Jojo
7

[1960] AC 87

had accepted the part payment and waived his right of full amount based on good faith
because at that moment of time, Alex could not afford to pay the full payment.
It is ethical to pay back a debt one incur despite the fact whether he or she is bound to
do it legally or not.