Page 1

Malayan Law Journal Articles/2012/Volume 5/An Offer Vis- -vis an Invitation to Treat: A Comparative
Analysis with Reference to Malaysia
[2012] 5 MLJ i
Malayan Law Journal Articles
2012

AN OFFER VIS--VIS AN INVITATION TO TREAT: A COMPARATIVE

ANALYSIS WITH REFERENCE TO MALAYSIA
Adnan Trakic
LLB (Hons), MCL (IIUM), PhD Candidate in (AIKOL)(IIUM)
Lecturer, Sunway University Business School, Malaysia
INTRODUCTION
An offer is an essential element for the formation of a contract. An offer, legally speaking, binds the maker
once it is accepted by the other party. However, sometimes, the parties in the everyday course of business
would not like their statements to be binding on them if their offer is accepted by the other party. In other
words, the parties may want to initiate negotiations by making certain statements or declarations which are
not to be regarded as offers. Those types of statements are identified by the courts as an invitation to treat.
Drawing a clear distinction between an offer and an invitation to treat is not an easy task. In order to draw a
line between the two, the courts have resorted to two different approaches, ie the 'conventional approach'
and the 'unconventional approach'. Both of these approaches will be dealt with in the following discussion in
this paper. Furthermore, the courts have identified certain situations which can be categorised as an
invitation to treat. These situations will also be explained in the paper with reference to decided cases in
England and Malaysia.
THE DISTINCTION BETWEEN AN OFFER AND AN INVITATION TO TREAT
It is important to distinguish an offer from an invitation to treat. In reality, it would be almost impossible to
have all types of statements being identified as offers. The statement which amounts to an offer would be
capable of acceptance, and once an offeree accepts an offer, a contract is concluded. However, strictly
speaking, certain types of statements made by the contracting parties are not meant to be deemed as offers,
but rather as statements leading
5 MLJ i at ii
into, or indicating the negotiations. Those statements are called an invitation to treat, or an 'offer' to the other
party to make a legally binding offer. However, the question posed is on how to distinguish an offer from an
invitation to treat. Although it is essential to draw the distinction between an offer and an invitation to treat, in
reality, it is a very difficult thing to do. The courts have identified certain types of statement as an invitation to
treat. However, these situations identified by the courts are not exhaustive.1 In fact, the courts have
traditionally applied different ways of determining situations which would amount to an invitation to treat and
an offer.
In general, the so called 'conventional approach' emphasises on the manner of an offer made by one party
and acceptance by the other. In other words, the conventional approach strictly stresses on formalities and
calls for basic requirements for the formation of contact to be fulfilled. The conventional approach in
determining the position of an offer and an invitation to treat was endorsed by the House of Lords in Gibson v

Page 2

Manchester City Council2 and later followed by the Malaysian Court of Appeal in Eckhardt Marine GMBH v
Sheriff, High Court of Malaya, Seremban & Ors3 Subsequently, the High Court in Hui Jia Hao v Perdana
Park City Sdn Bhd & Anor4 referred to the principles set out by the Court of Appeal in the former case.
On the other hand, the 'unconventional approach' in marking out an invitation to treat from an offer was
endorsed by the English Court of Appeal in two cases, ie Gibson v Manchester City Council5 and Storer v
Manchester City Council.6 The 'unconventional approach' places the emphasis on correspondence as a
whole and the conduct of the parties to determine whether a statement was intended to be an offer or an
invitation to treat. Unlike the 'conventional approach', the 'unconventional approach' does not require a strict
analysis of an offer and an acceptance.
In principle, both an offer and an invitation to treat represent the expression of the will of the party to enter
into a contract. It can be said that the fundamental difference between an offer and an invitation to treat is
in the legal effect that they propound. The legal effect of an offer is such that it is binding on the maker of the
declaration if an acceptance is made by the other party.
5 MLJ i at iii
This is because the contract is concluded upon the completion of an acceptance. However, the legal effect
of an invitation to treat does not legally bind the maker of the declaration. It is simply an invitation to the other
party to make an offer. It is only when an offer is accepted by the maker of an invitation to treat that the
contract is concluded. The addressee of an offer or an invitation to treat is of course at liberty not to accept
an offer or not to make an offer in case of an invitation to treat. The addressee can make a counter offer or a
counter invitation to treat if the terms and conditions of an offer or an invitation to treat do not meet his
expectations.7
DIFFICULTIES IN DISTINGUISHING AN OFFER FROM AN INVITATION TO TREAT
There is no doubt that the distinction between an offer and an invitation to treat is essential. However, to
determine whether the statement would amount to an offer or an invitation to treat is much harder than it
seems on the first instance. This difficulty in drawing the distinction between the two is highlighted by Richard
Stone in one of his works whereby he compared the decisions of two English cases, ie Gibson v Manchester
City Council8 and Storer v Manchester City Council9 in illustrating this difficulty.10
In Gibson v Manchester City Council the issue that was discussed by House of Lords was in relation to the
nature of the letter sent by the Council to the respondent, Mr Gibson. In other words, the court had to
determine whether the letter constituted an offer or was simply a mere invitation to treat. In this case, Mr
Gibson was a tenant of the house which was owned by the Council. The Council made the announcement
that tenants renting their premises are allowed to buy the same from the Council. Mr Gibson was interested
to buy the house which he rented and initiated negotiations. The Treasurer of the Council sent him a letter
stating that the Council 'may be prepared to sell the house to you at the purchase price of 2,725 less 20%
= 2,180 (freehold)'. Furthermore, the letter stated: 'If you would like to make formal application to buy your
Council house please complete the enclosed application form and return it to me as soon as possible.' Mr
Gibson did as he was asked, but before the official exchange of letters, the local elections were held on
which the control of the
5 MLJ i at iv
Council changed from the Conservative Party to the Labour Party. The Labour Party was against the policy
of selling the houses to the tenants and they refused to sell the house to Mr Gibson.
The court of the first instance and the Court of Appeal11 held that there was a binding contract. In fact, Lord
Denning MR of the Court of Appeal argued that contracts should not be analysed only by referring strictly to
an offer and an acceptance, but rather the court should look into the correspondence as a whole and the
conduct of the parties. Lord Denning said that:
If by their correspondence and their conduct you can see an agreement on all material terms, which was intended
thenceforward to be binding, then there is a binding contract in law even though all the formalities have not been gone
through.

Page 3

However, the Court of Appeal decision was reversed by the House of Lords12 which stated that the letter
sent by the treasurer of the Council stating that the Council 'may be prepared to sell' and asking the
defendant to 'make formal application to buy' did not amount to an offer but was a mere invitation to treat.
Therefore, there was no binding contract between the parties. The House of Lords approach in determining
the position of an invitation to treat and an offer is based on the conventional approach which according to
the House of Lords judge, Lord Diplock, suggests that in order to find out whether there is a contract
between the parties, it must be determined whether there is an offer made by one party which has been
accepted by the other. This can be seen from the contractual documents that were relied upon by the
parties.
On the other hand, the Court of Appeal in Gibson v Manchester City Council referred to earlier case of Storer
v Manchester City Council. The facts of the two cases are similar. In Storer, the Treasurer of the Council sent
a letter to Mr Storer stating: 'I understand you wish to purchase your Council house and enclose the
Agreement for Sale. If you will sign the Agreement and return it to me I will send you the Agreement signed
on behalf of the [council] in exchange.' The 'Agreement for Sale' was also attached with the letter. Mr Storer
needed to fill in the details in the Agreement for Sale and return it back to the Council, as he rightly did.
However, before the letter was signed by the Council and sent back to Mr Storer, local elections were held
whereby the control of the Council changed from the Conservative Party to the Labour party. The new
Labour Council refused to proceed with the sale.
5 MLJ i at v
The Court of Appeal held that the offer sent by the Treasurer of the Council amounted to an offer which was
subsequently accepted by Mr Storer, and as such, the contract was concluded. Lord Denning MR of the
Court of Appeal observed that the formalities of exchange of contracts were quite unnecessary. What was
important was that the tenant signed the letter and returned it to the Council, and that by itself amounted to
an acceptance which concluded the contract. However, from this point, it is observable that the House of
Lords decision in Gibson differs from the earlier Court of Appeal decision in Storer. In Gibson, the letter sent
by the Council to Mr Gibson was held to be a mere invitation to treat while the letter sent by the Council to Mr
Storer was held to be an offer capable of acceptance. These two interpretations gave rise to some difficulties
and uncertainties in formulating the difference between an offer and an invitation to treat.
Richard Stone argues that decisions in Gibson and Storer could have been influenced by political
dimensions.13 The Conservative Party had a policy of allowing the tenants to buy the houses which they
rent while the Labour Party had a contrary policy, ie not allowing the sale of the houses to the tenants.
Richard Stone explains that there was no direct indication in the words of the House of Lords in Gibson's
case that their decision was influenced by the political matters, however, at the same time, he stated that the
judges could have been consciously or unconsciously under the influence of the political matters and as such
'... it is possible that this may have been a factor tipping the balance against Mr Gibson'.14
Furthermore, John N Adams and Roger Brownsword opine that the House of Lords and dissenting judge of
the Court of Appeal, Geoffrey Lane LJ in Gibson's case endorsed the 'conventional approach' which is based
on formalist and market individualist considerations.15 In Gibson's case, the House of Lords was not willing
to treat the case as an exception to general principles of the law of contract which emphasise on the
formalities in relation to an offer and acceptance, and in this way, their approach was based on formalist and
market-individualist considerations. On the other hand, John N Adams and Roger Brownsword, argue that
the majority in the Court of Appeal including Lord Denning MR in the cases of Gibson and Storer adopted the
'unconventional approach' which is based on consumer-welfarism.
5 MLJ i at vi
16 The Court of Appeal disregarded a strict adherence to an offer and acceptance and the formalities of a
contract. An emphasis was put on the correspondence as a whole and the conduct of the parties as well as
the liberal interpretation of an offer and acceptance based on consumer-welfarism.
The House of Lords' decision in Gibson and the Court of Appeal decision in Storer indeed show disparity in
approaches towards an offer and an invitation to treat. However, this disparity does not exist in such a way if
the Court of Appeal decisions in both Gibson and Storer are compared. After all, Lord Denning MR was one
of the judges sitting in the Court of Appeal in both cases who delivered consistent judgments. In both

Page 4

instances, Lord Denning stated that there was a valid contract, although in Gibson's case, he emphasised
on the importance of correspondence as a whole and the conduct of the parties and not so much on the strict
analysis of an offer and acceptance, while in Storer, he clearly observed that the letter by the Council
amounted to an offer capable of acceptance which was accepted by Mr Storer by his signature and returning
of the letter. Nevertheless, in Malaysia, it seems that the House of Lords in Gibson has been endorsed by
the Court of Appeal judge, Gopal Sri Ram JCA in Eckhardt Marine GMBH v Sheriff, High Court of Malaya,
Seremban & Ors.17
In the Malaysian case of Hui Jia Hao v Perdana Park City Sdn Bhd & Anor,18 learned judge, Hamid Sultan
Abu Backer stated that for a statement to be regarded as an offer, it must be the subject matter of immediate
acceptance, otherwise it will be regarded by most as an invitation to treat. This was what the learned judge
said:
In my view, the test ought to be 'whether the offer is immediately capable of acceptance'. Anything less may amount to
invitation to treat or mere puff or general notice of intention etc ...19

Furthermore, the learned judge referred to the earlier test for determining the position of an invitation to treat
and an offer mentioned by the Court of Appeal judge, Gopal Sri Ram JCA in Eckhardt Marine GMBH v
Sheriff, High Court of Malaya, Seremban & Ors20 who stated:
First, the general approach that is to be adopted by a court in determining whether there is an agreement concluded
between the parties is to see whether there is a definite offer made by one party which has been accepted by the other;
in other words, whether the agreement in question may be resolved into an offer
5 MLJ i at vii
and a corresponding acceptance. That such an approach should be generally adopted was affirmed by the House of
Lords in Gibson v Manchester City Council [1979] 1 All ER 972.21

SITUATIONS CATEGORISED AS INVITATION TO TREAT

There are a number of trading situations which have been categorised by the courts as an invitation to treat
and not as offers. Many contract law books, in line with the judicial decisions, have discussed various
situations where offers are not traditionally regarded as offers but rather as an invitation to treat.22 Some of
the situations which could be identified as an invitation to treat are as follows:
(a)
(b)
(c)
(d)
(e)
(f)

auctions;
display of goods in self-service shops and shop windows;
advertisements;
call for tenders;
supply of information/ preliminary negotiations; and
an invitation to purchase shares.

AUCTIONS
An auction is basically the process through which auctioned goods are being sold and purchased. An
auctioneer 'invites' bids from potential buyers whom in return, would be competing with each other in making
the bids or 'offering' to buy auctioned goods until those offers are accepted by the falling of hammer by the
auctioneer. The falling of the hammer would also signify that a contract of sale has been concluded.
Therefore, the auctioneer's call for bids is not an offer but an invitation to treat (offer to potential buyers to
make an offer). There are a few cases to illustrate this point. The case of Payne v Cave23 established a
principle that the auctioneers' call for bids constitutes a call for offers and that the falling of the hammer
would constitute an acceptance. Therefore, the court held that the bidder is allowed to retract his bid at any
time before the hammer is down. In other words, an offer can be revoked at any time before its
5 MLJ i at viii

Page 5

acceptance. Furthermore, the court emphasised that 'every bidding is nothing more than an offer on one
side, which is not binding on either side till it is assented to.'24
In the case of British Car Auctions Ltd v Wright,25 Lord Widgery CJ reiterated the above principle by saying
the following:
... But, of course, as a matter of strict law of contract, forgetting for the moment the colloquial meaning of the phrase
'offer for sale', the auctioneer when he stands in his rostrum does not make an offer to sell the goods on behalf of the
vendor; he stands there making an invitation to those present at the auction themselves to make offers to buy. In the
strict law of contract there is no doubt whatever that has always been the law, that when an auction sale takes place,
the offer comes from the bidder in the body of the hall and the acceptance is communicated by the fall of the
auctioneer's hammer. It is technically incorrect to describe an auctioneer as offering the goods for sale for that reason
...

Furthermore, the auctioneer is under no obligation to sell the subject matter of sale to the highest bidder.26
However, the situation might be slightly different in the case where an auction is being advertised to be held
'without reservations'.27 The position in England is that where an auction 'without reservation' has been
advertised,,the auctioneer makes an offer to the highest bidder. So, if the auctioneer does not accept the
highest bid, then he can be sued for breach of the separate collateral contract and the bidder could claim
damages. Thus, the promise by the auctioneer to conduct 'without reservation' auction is basically an offer in
the separate collateral contract and benefit factor of having 'without reservation' auction, ie benefit to the
auctioneer of driving up the price bid, is a sufficient consideration.28 However in Australia, the situation
would not change if the auction is being advertised to be held 'without reservation'. It would not amount to an
offer by the auctioneer and the auctioneer is still free not to accept the highest bid. In other words, in the
case
5 MLJ i at ix
of auctions without reservation being advertised, there is no collateral contract.29
In Malaysia, the common law cases have been endorsed. Thus, an auctioneer invites the bids from potential
buyers and his offers are regarded as an invitation to treat or an offer to the bidders to make an offer.
Furthermore, the sale of land in public auctions is a slightly more complex transaction than the sale of goods.
In M & J Frozen Food Sdn Bhd & Anor v Siland Sdn Bhd & Anor,30 the court elaborated on the issue of the
sale of land in public auctions. The court agreed that a contract of sale is concluded with the fall of the
hammer but 'conclusion' of the contract in case of auctions involving sale of land would not be absolutely
complete only with the official acceptance by way of the falling of the hammer. What is concluded is only
one aspect of sale, where the auctioneer undertakes the obligation not to sell the land to other bidders, and
the buyer undertakes the obligation to pay for the land. However, the land has not been transferred yet.
Proprietary rights have yet to be transferred to the buyer. The court observed that beneficial interest on the
land would be transferred to the buyer only when the memorandum of transfer is executed and full payment
is paid by the buyer.
THE DISPLAY OF GOODS IN SELF-SERVICE SHOPS AND SHOP WINDOWS
The display of goods in a self-service shop and shop window does not constitute to an offer but rather an
invitation to treat. Therefore, goods which have been displayed in a self-service shop and shop window are
not being offered for sale but are only being displayed for potential customers to pick them up and to make
an offer. Hence, when the customer picks up goods from self-serviced shops and markets, and brings them
to the cashier for payment, he is the one making an offer to the cashier and once the cashier accepts the
money, a contract of sale is concluded. If the cashier declines to sell the goods, the customer does not have
a valid cause of action to sue the shop for breach of contract as the contract had not been concluded. This
can be illustrated with a few decided cases.
In Pharmaceutical Society of Great Britain v Boots Cash Chemists Ltd,31 the court had to determine when
the sale transaction was concluded, ie whether at
5 MLJ i at x
the time the goods are picked from the shelves or at the time of acceptance at the cash counter. Section

Page 6

18(1)(a)(iii) of the Pharmacy Poisons Act 1933 provided that the sale of drugs listed in the Part I of the
Poisons List of the Act should only be done under the supervision of the registered pharmacist. The
defendant was charged under the Pharmacy Poisons Act 1933 for sale of the drugs listed under Part I of the
Poisons List of the Act without supervision of the registered pharmacist.
An argument put forward by the prosecution was that the display of goods at shelves was an offer and that
customers by picking the goods from the shelves have accepted an offer. As a result, the contract of sale
was concluded at the time of customers' picking of items from the shelves without supervision of the
registered pharmacist. On the other hand, the defendant contended that a mere display of goods at the
shelves was an invitation to treat and that the contract was only concluded when the goods were accepted
at the cash counter under the supervision of the registered pharmacist. The trial court decided in favour of
the defendant. When the case went on appeal, the Court of Appeal upheld the decision of the trial court,
explaining that the display of goods in shelves was only an invitation to treat and thus, the contract was
concluded when the goods were accepted at the cash counter under the supervision of the registered
pharmacist.
The decision by the trial court and the Court of Appeal was a very useful decision which goes in line with the
common practice undertaken today in all self-service shops. If the display of goods in shelves is an offer and
not invitation to treat, then the customers by picking the goods would conclude the contract and will not
have any chance to inspect the goods or eventually substitute them with the other goods. The freedom of
customers to see and inspect the goods before they make an offer would be completely taken away. This
was one of the arguments which the learned judge of Queen's Bench Division, Lord Goddard CJ,32 raised
as well as Court of Appeal judge, Somervell LJ, endorsed in Pharmaceutical Society of Great Britain v Boots
Cash Chemists Ltd.
However, Richard Stone argues that the Court of Appeal's decision that the display of goods in a self-service
shop does not amount to an offer but is a mere invitation to treat, based on the argument that the customers
should not 'become committed too soon' and should be given the chance to inspect the
5 MLJ i at xi
goods and change their mind was unnecessary.33 Further, he argues that it would be possible to say that
the display of goods in a self-service shop would amount to an offer, but that the customer accepts an offer
only when goods are presented to the cashier for payment.34 In this way, the concern expressed by the
Court of Appeal for the customers 'not becoming committed too soon' would still be properly addressed and
there would be no need to declare the display of goods in a self-service shop to be regarded as an invitation
to treat.
In another English case of Fisher v Bell,35 the shopkeeper displayed in his shop a 'flick-knife'. The police
alleged that he had committed a statutory offence by 'offering to sell' a flick-knife. Offering to sell a flick-knife
was an offence under s 1 of the Restrictions of Weapons Act 1959 which provided the following:
Any person who manufactures, sells or hires or offers for sale or hire, or lends or gives to any other person -- (a) any
knife which has a blade which opens automatically by hand pressure applied to a button, spring or other device in or
attached to the handle of the knife, sometimes known as a flick knife or flick gun; ... shall be guilty of an offence and
shall be liable on summary conviction in the case of a first offence to imprisonment for a term not exceeding three
months or to a fine not exceeding fifty pounds or to both such imprisonment and fine, ...36

The court held that the shopkeeper did not commit to the offence under s 1 of the Restrictions of Weapons
Act 1959 because a mere display of a flick-knife in his shop does not amount to an offer to sell the same. It
was a mere invitation to treat. However, to claim that goods displayed in a shop with the price attached to it
are not being offered for sale seems to be a very vague and absurd argument for many people. The
presiding judge, Lord Parker CJ, admitted this fact. He observed that the laws which had been legislated by
Parliament must be interpreted with reference to other general laws of the country. The court said that there
is a presumption that Parliament was aware of the general principles of law (ie that the display of goods in a
shop with a price tag is a mere invitation to treat) at the time of passing of the Act. Therefore, Parker CJ
'reluctantly' (as stated in his decision) decided that no offence was committed.

Page 7

In Fisher v Bell, there was a reference made by one of the parties to the case of Pharmaceutical Society of
Great Britain v Boots Cash Chemists Ltd,37
5 MLJ i at xii
distinguishing it from Fisher v Bell. Basically, both cases discussed the same issue but the Pharmaceutical
Society of Great Britain v Boots Cash Chemists Ltd case talks about a completed sale transaction while
Fisher v Bell talks about an incomplete transaction (ie at the stage of an offer).
Nevertheless, the facts in both cases indicate that one of the main issues that the court had to determine
was whether the accused parties committed the statutory offences, ie 'selling of the certain drugs without the
supervision of the registered pharmacist' in Pharmaceutical Society of Great Britain v Boots Cash Chemists
Ltd, and 'offering to sell a flick-knife' in Fisher v Bell. At first sight, these statutory offences do not indicate
any contractual issues, but in order to determine whether these offences have been committed, the court had
to discuss firstly, what amounts to an 'offer' to sell and secondly, when a sale agreement is concluded
(whether at the time of picking of goods from shelves or at the time of accepting them at the counter). In
other words, the English court took a 'technical approach' in deciding these cases.
The English approach can be distinguished from the Australian approach whereby the Australian courts were
quite reluctant to follow the 'technical approach' in deciding the case of similar nature.38 Thus, for instance,
in Goodwin's of Newtown Pty Ltd v Gurrey,39 the Australian court observed that the display of television sets
with the price tag in a shop amounted to 'offering goods for sale', contradicting the Early Closing Act 1926
(SA), and was not regarded as an invitation to treat. Therefore, the defendant was held liable. Another
example where the technical approach was disregarded is in relation to judicial interpretation of s 56(2) of the
Trade Practices Act 1974. Section 56(2) of the Trade Practices Act 1974 provides that:
A corporation that has, in trade or commerce, advertised goods or services for supply at a special price shall offer such
goods or services for supply at that price for a period that is, and in quantities that are, reasonable having regard to the
nature of the market in which the corporation carries on business and the nature of the advertisement.

In other words, this section makes it compulsory for a corporation advertising to supply goods or services to
'offer' them for sale.40 An advertisement (which is also an invitation to treat and which will be discussed
subsequently) is practically regarded as an offer. In most of the Australian cases, except for one
5 MLJ i at xiii
case,41 the courts did not require corporations to make a formal offer in 'technical contractual sense' in
situations which are covered under s 56(2). Moreover, the Federal Court judge, Spender J, in Wallace v
Brodribb,42 observed the following:
Having said that, it seems to me that reference to technical distinctions between invitations to treat and offers capable
of immediate acceptance introduces unnecessary difficulties. Section 56 is intended to have a broad reach and no
benefit is secured by giving the phrase 'offer to supply' anything other than its ordinary and non-technical meaning ...

Malaysia follows the English approach, and the principles decided in Pharmaceutical Society of Great Britain
v Boots Cash Chemists Ltd and Fisher v Bell are applicable in Malaysia.
ADVERTISMENTS
Advertisements are yet another example of an invitation to treat. Generally, makers of statements in
advertisements do not intend those statements to be regarded legally as offers but rather as invitations to
treat. In Partridge v Crittenden,43 the English court reaffirmed that an advertisement does not constitute to
an offer for sale but rather an invitation to treat. In this case, the appellant advertised in a periodical 'cage
and Aviary Birds' the following statement 'Quality British ABCR ... Bramblefinch cocks, Bramblefinch hen, 25s
each.' Upon seeing the advertisement Mr Thompson ordered a hen by enclosing a cheque of 30s. The
appellant was charged for offering for sale a certain wild live which was prohibited under s 6(1) of, and
Schedule 4 to the Protection of Birds Act 1954 which provided the following:

Page 8

If ... any person sells, offers for sale ... (a) any live wild bird ... included in Sch 4 to this Act of a species which is
resident in or visits the British Isles in a wild state, other than a close-ringed specimen bred in captivity; ... he shall be
guilty of an offence ... ' Schedule 4 has the heading: 'Wild birds which may not be sold alive unless close-ringed and
bred in captivity' and amongst the names in the schedule is 'brambling'.

Delivering the judgement of the Queen's Bench Division, Ashworth J, quashed the conviction and allowed
the appeal. The court observed that in order to convict the appellant under s 6 of the Protection of Birds Act
1954,
5 MLJ i at xiv
the key words of the section which state that 'any person sells, offers for sale or has in his possession for
sale', must be proven. Furthermore, the court held that an advertisement does not constitute an offer for sale
but a mere invitation to treat. The learned Ashworth J referred to the rational in the earlier case of Fisher v
Bell44 in deciding the case. Thus, it can be seen that the court adopted the technical approach that was
discussed earlier.
In the Malaysian case of Eckhardt Marine GMBH v Sheriff, High Court of Malaya, Seremban & Ors,45 the
sheriff of the High Court at Seremban arrested a motor vessel at Port Dickson which had been subsequently
advertised for sale. The appellant upon seeing the advertisement, made an offer to buy the vessel subject to
two conditions, ie that no repairs were needed to be done by the port authority on the vessel, and that the
vessel could leave on its own power with a proper certificate being issued about its seaworthiness.
Subsequently, the appellant deposited a bank draft for 10% of the purchase price. The sheriff accepted the
offer and applied for the leave of the judge to conclude the sale. The judge granted the leave. However, later
on, the appellant failed to pay the balance of the purchase price and as a result, the deposit was forfeited.
The appellant contended before the judge that the contract was never concluded and that his deposit had to
be returned back to him. The learned judge rejected the appellant's claim.
Therefore, the appellant appealed before the Court of Appeal. The learned Gopal Sri Ram JCA, in delivering
the judgement of the Court of Appeal held that the sheriff's advertisement was an invitation to treat and that
the appellant made a formal offer through letter which was accepted by the sheriff. Thus, there was a valid
contract between the parties and the appeal was dismissed. This Court of Appeal decision was later
followed by the Federal Court in Lim Sze On & Ors v Syarikat Gunung Sejahtera Sdn Bhd.46
The case of Eckhardt Marine GMBH v Sheriff, High Court of Malaya, Seremban & Ors was subsequently
referred to by the learned High Court judge, Heliliah Mohd Yusof J in Nai Yau Juu v Pasdec Corp Sdn Bhd &
Anor,47 where the issue that was raised was on whether a circular advertisement constituted an offer or an
invitation to treat. In this case, the plaintiff alleged that the defendant breached the contract which was
concluded between the plaintiff and the first defendant on 21 August 1995, whereby the plaintiff purchased a
5 MLJ i at xv
piece of land from the defendant for RM1,880,000. As a result, the plaintiff applied for specific performance
or, alternatively, for the damages for breach of contract.
The High Court in deciding the case considered three relevant exhibits. Firstly, P1 included a letter of
invitation sent by the first defendant to the plaintiff, which showed that the plaintiff was registered as the
interested buyer, invitation for booking, and a payment of booking fee forn RM3000, which should eventually
be the part of the sale and purchase agreement. Secondly, exhibit P3 was an official receipt which was
issued by the first defendant to the plaintiff for the payment of RM3000 for booking fee. Thirdly, P4 was yet
another letter by the first defendant to the plaintiff in which the defendant invited the plaintiff to enter into an
official contract for the purchase of the properly for RM230,000 at a certain place and time.
However, the plaintiff contended that there was already an agreement between the plaintiff and the first
defendant for the sale of the property for RM 188,000, and that the first defendant could not increase the
price subsequently. On the other hand, the first defendant contended that there was no contract between
the parties and that the first letter, P1, sent by the first defendant to the plaintiff was not an offer but rather an
invitation to treat. The learned High Court judge, Heliliah Mohd Yusuf J, dismissed the plaintiff's appeal by
stating that the P1 exhibit did not constitute an offer and that the payment of the booking fee of RM 3000 by
the plaintiff did not constitute to an acceptance. Therefore, the contract was not concluded between the

Page 9

parties.
Another case which reinstated that an advertisement is not an offer but a mere invitation to treat is Leong
Mun Chiew Anor Leong Moon Nien v Glenmarie Cove Development Sdn Bhd.48 The learned High Court
judge, Noraini Abdul Rahman JC, held that an advertisement that the plaintiff heard over the radio 'was
merely an invitation to treat'.
In addition, advertisements advertising job vacancies are not offers. In the Malaysian case of Coelho v The
Public Services Commission,49 the learned Ong J, held that an advertisement in the Malay Mail
advertising job vacancy was not an offer but a mere invitation to treat.
However, an exception to the general rule that advertisements are not offers is a situation where
advertisements have been made by the manufacturer of
5 MLJ i at xvi
goods. This can be seen in Carlill v Carbolic Smoke Ball Co,50 whereby an advertisement of the carbolic
smoke ball was made by the manufacturer. The advertisement was regarded as an offer and any
subsequent acceptance of the offer would conclude the legally binding contract between the parties, as in
this particular case, it did. Furthermore, in Partridge v Crittenden,51 the Lord Parker CJ observed the
following:
I agree and with less reluctance than in Fisher v Bell, to which Ashworth J has referred, and the case of Mella v
Monahan. I say 'with less reluctance' because I think that when one is dealing with advertisements and circulars, unless
they indeed come from manufacturers, there is business sense in their being construed as invitations to treat and not
offers for sale.

CALL FOR TENDERS

A tender is a process in which each interested party may submit their own bids which would normally
constitute to an offer. Now, what is the difference then between auction bids submitted by the bidder and the
bids in a tender process? The main factor which distinguishes the bids in a tender process from the auction
bids is the fact that in a tender process, each bidder is not aware about the details of the other bids. Usually,
tender is being widely used by governments to contract out some of their projects like for instance,
construction. As such, an advertisement or call for tenders is considered as an invitation to treat. As a result,
tenders are legally regarded as offers.
In the English case of Spencer and others v Harding and others,52 the defendant sent out a circular
containing the following statement: 'We are instructed to offer to the wholesale trade for sale by tender the
stock in trade of A., amounting, &c., and which will be sold at a discount in one lot: payment to be made in
cash: the tenders will be received and opened at our offices,' &c.' Upon seeing the statement, the plaintiff
who made a bid and whose bid was subsequently rejected by the defendant, contended that there was a
contract between the parties. The plaintiff argued that the defendant's statement in the circular amounted to
a promise to sell goods to the highest bidder. In other words, the statement in the circular amounted to an
offer. However, the court held that the defendant's statement did not amount to an offer and that there was
no contract between the parties.
However, the court made a very important observation in relation to tenders. The learned judge of the Court
of Common Pleas, Willes J, observed
5 MLJ i at xvii
that 'If the circular had gone on, 'and we undertake to sell to the highest bidder,' the reward cases would
have applied, and there would have been a good contract in respect of the persons ...' In other words, the
parties calling for tenders are free to stipulate any conditions in relation to tenders, such as; on which basis a
tender will be conducted, and they will be obliged to follow those conditions. Therefore, if the vendor
promises to accept the highest bids, then a call for tenders would be regarded as an offer if the highest bid is
made.

Page 10

In Harvela Investments v Royal Trust Co of Canada (CI) Ltd and others,53 the first defendant (vendor) sent a
letter inviting two parties, the plaintiff and second defendant, to submit their written tenders to buy certain
shares. The first defendant explicitly stated in the letter of invitation that 'we bind ourselves to accept [the
highest] offer' received by them which complied with the terms of the invitation.' Relying on the statements
provided in the letter of invitation for bid, the plaintiff and the second defendant tendered their bids
respectively. The plaintiff tendered a sum of $2,175,000 while the second defendant tendered a sum of
$2,100,000 'or ... $101,000 in excess of any other offer ... expressed as a fixed monetary amount, whichever
is the higher'. The second defendant, by mentioning $101,000 in excess of any other offer, tried to ensure
that his tender by 'being the highest in any circumstances' would amount to a valid acceptance, and as such,
the contract would be concluded with him. In this way, the traditional rules applicable to tenders would be
avoided as the tenders in their nature imply a strong confidentiality, and the party that makes the highest bid
would normally be the successful one in concluding the contract. The first defendant in this case accepted
the second defendant's bid and the plaintiff protested against that by initiating proceedings against the firsts
and second defendants.
The plaintiff contended that there was a valid contract concluded between the first defendant who made an
offer and the plaintiff who accepted it. The plaintiff's contention was upheld by House of Lords. The court
stated that the first defendant's invitation for bid amounted to a valid offer and that the plaintiff's bid which
was the highest (fixed bid) was a valid acceptance, and so the contract was concluded. Strategy taken by
the second defendant in ensuring that their bid is always higher was not accepted by the court as bids are
expected to be fixed amounts of money. Therefore, this case demonstrated an exception to the general rule.
The general rule is that an invitation for tenders would be regarded as an invitation to treat and not an offer.
However, in this
5 MLJ i at xviii
case, because of the first defendant's promise to accept the highest bid (unilateral contract), what would
normally be regarded as an invitation to treat here was regarded as an offer.
Another example where an invitation to tender was regarded as an offer and not as a mere invitation to treat
is the case of Blackpool & Fylde Aero Club v Blackpool Borough Council,54 whereby Stocker LJ of the Court
of Appeal held that the format of an invitation to tender is very significant in order to know the real intention of
the parties. In other words, in order to find out whether an invitation to tender would be regarded as an
invitation to treat or an offer, it would depend on the format of an invitation to tender. The learned Stocker LJ
observed that this particular case is an exception to the general rule stated in Spencer v Harding that an
invitation to tenders amount to a mere invitation to treat. As a result, the Court of Appeal in this case held
that an invitation to tender was regarded as an offer and an acceptance was made by the complying tender,
ie the Aero Clubs in this particular case.
Furthermore, as mentioned earlier, the tender process is often used by gtovernments in procuring goods and
services. Normally, one of the main question from a legal point of view, which could be raised is, what is the
legal position of government invitations for tenders, ie whether they are regarded as an invitation to treat or
as an offer. In fact, the government's call for tenders was discussed in many cases recently. There is no
clear-cut answer to this question as the answer would depend on the individual facts of each case. Although
the final answer would depend on the facts of each case, generally, the courts in England have held that
there is a preliminary contract that governs the tender process between the government and the
tenderers.55 This preliminary contract imposes certain contractual duties on both the government and the
tenderers.
In the Malaysian case of Cheng Keng Hong v Government of the Federation of Malaya,56 a tender was not
really an issue per se, but rather the parties have entered into a contract through the tender process. The
High Court's observation that the contract comes into existence by way of 'unconditional acceptance of a
tender' implies the fact that a tender by itself is an offer and that an invitation to tender is a mere invitation to
treat.
The decision of the above case was referred to in another interesting Malaysian case of Chin Ah Keo @ Chin
Lai Sitt v Anggun Pintas Sdn Bhd &
5 MLJ i at xix

Page 11

Ors.57 In this case, the first defendant was the shareholder of the entire issued and paid-up capital of
Rahman Hydraulic Tin Sdn Bhd. The second and third defendants were appointed as his liquidators. The
liquidators advertised an open tender inviting the potential buyer to buy the first defendant's shares in the
company. Subsequently, eight tenderers submitted their bids, among them plaintiff who submitted
RM8.826m and the fourth defendant who submitted RM15m with condition that the licence which had been
granted to the company by the State Government is renewed. However, neither the plaintiff nor fourth
defendant initially managed to get the tender, but rather the tender was given to one company, MP Asset
Management Sdn Bhd ('MPAM'), which was the highest bidder. Later on, the award of tender to MPAM was
terminated due to the MPAM's breach of some conditions of the agreement. As a result, the fourth
defendant's tender was accepted by the liquidators, after the forth defendant's prior condition was withdrawn,
and the contract was signed between the first defendant and forth defendant.
The plaintiff was not happy with the arrangement and applied to the court for the contract concluded
between the first and fourth defendant to be declared as null and void. The plaintiff's contention regarding the
tender process was that withdrawal of the condition by the fourth defendant amounted to a new and fresh
tender. In other words, the new tender would mean a completely new offer. However, the learned High Court
Judge, Ramly Ali J, rejected the plaintiff's contention that the withdrawal of the condition by the fourth
defendant amounted to a fresh tender. At the time of withdrawal of the condition by the fourth defendant, the
tender process was already closed. The court stated that:
the second and third defendant were at liberty to exercise their discretion and discuss with any other tender. These
powers are conferred upon the liquidators as provided in s 2 and 6 of the information memorandum. Therefore, there is
no issue of initial bid and/or subsequent bid by the fourth defendant.58

Furthermore, the learned High Court judge, Ramly Ali J in deliberating on the law on tender in Malaysia
stated that: 'The law on tender in Malaysia is similar to that of English law vis-a-vis the invitation for tender is
basically inviting offerrors and unless and until the offer is accepted, there is no concluded contract between
the offerer and the offeree.'59
5 MLJ i at xx
SUPPLY OF INFORMATION/PRELIMINARY NEGOTIATIONS
A mere supply of information by the contracting parties about the subject matter of a contract (ie price,
specifications, etc) would not amount to an offer, but rather would be regarded as an invitation to treat. The
freedom of the parties to bargain with each other must be untouched by the complex contract regulatory
framework. The law is not concerned with the price of the bargain or whether the bargain is good for one
party or not. In other words, the price (consideration) must be sufficient and need not be adequate. The law
only looks at underlining the legal structure of transactions by ensuring that all necessary elements are
present. Thus, a freedom to negotiate and supply the relevant information which will lead to an offer must be
given to the parties. The supply of information is not an offer but it is meant to lead the other party to make
an offer.
The Privy Council decision in Harvey v Facey60 is a wonderful illustration of a statement regarded as a mere
supply of information and not an offer. The brief facts of the case are as follows:
the appellants telegraphed, 'Will you sell us Bumper Hall Pen ? Telegraph lowest cash price,' and the respondent
telegraphed in reply, 'Lowest price for Bumper Hall Pen 900,' and then the appellants telegraphed, 'We agree to buy
Bumper Hall Pen for 900 asked by you. Please send us your title-deed in order that we may get early possession,'
but received no reply.

The Privy Council held that there was no binding contract between the parties. The appellant's final
telegraph stating: 'We agree to buy Bumper Hall Pen for 900 asked by you. Please send us your title-deed
in order that we may get early possession', is not an acceptance because an offer was never made. In fact,
the appellant's final telegraph could be regarded as an offer to buy the Bumper Hall Pen for 900. Lord
Morris in delivering the judgement of the Privy Council explained that the appellant posed two questions to

Page 12

the respondent in his first telegraph, ie 'Will you sell us Bumper Hall Pen, and Telegraph lowest cash price?,'
The respondent replied only the second question by supplying the information about the price of the Bumper
Hall Pen. Therefore, an offer was never made by the respondent.
In the Malaysian case of Preston Corporation Sdn Bhd v Edward Leong & Ors,61 the appellant, a publisher,
made a business arrangement with the respondent, a firm of printers, in relation to the printing of school
textbooks. The respondent sent to the appellant two bills, one being the printing charges
5 MLJ i at xxi
and the other being the extra bill for reproducing film positives. The issue arose in relation to the ownership
of the film positives. The appellant paid the printing bills but refused to pay additional charges amounting to
$500 alleging for the claim to be overcharged. The respondent brought the case before the trial court and
Harun J made a decision in favour of the respondents.
The appellants were unhappy with the decision, and later on, the case was appealed before the Federal
Court. The Federal Court tried to ascertain the issue in relation to ownership of the films. The appellants
contended that they supplied the respondents with existing textbooks for them to make the positives, and for
this work, the appellants were charged $28,052. In fact, they paid this sum willingly with the presumption that
the ownership of the film positives belongs to them. However, the respondent rebutted the appellant's
contention by claiming that the ownership of the films belonged to them based on 'the express terms of the
contract and also trade usage'. Therefore, the Federal Court had to ascertain when the contract came into
existence.
The learned Salleh Abas FJ in delivering the judgment of the Federal Court, observed that the contract
between the parties was concluded 'by an exchange of letters commencing with the respondents' quotations
and ending with the payment for the printed books.'62 The respondents submitted five quotations to the
appellant based on which the printing orders were issued by the appellant. The respondent argued that at
least first three quotations out of five contained film ownership clause and these quotations were
unconditionally accepted by the appellant. Thus, an unconditional acceptance by the appellant amounts to
an acceptance and the binding contract is concluded. The learned Federal Court Judge, Salleh Abas FJ
held that the respondent's contention would be correct only if the quotations could be regarded as an offer.
The learned judge observed that the quotation did not constitute an offer and thus, the contract could not
come into existence when the printing orders were issued by the appellant. The contract came into
existence when the printing orders were accepted by the respondent. In fact, the learned judge added that
the quotations 'were nothing more than a mere supply of information by the respondents in response to the
appellants' inquiry as to the price of books to be printed and their delivery dates.'63
5 MLJ i at xxii
AN INVITATION TO PURCHASE SHARES
One of the ways in which companies can raise capital is by issuing new securities (shares or debentures).64
Only public listed companies, listed on Bursa Malaysia may invite public to subscribe to their shares based
on the companies' prospectus. All companies listed on Bursa Malaysia are public companies, but public
companies may chose to be unlisted as well.65 Unlike public listed companies, private companies are not
allowed fund-raising activities based on the issuing of prospectus (ie issuing of shares and debentures).66
When a company decides to issue more shares, it would invite the public to purchase its shares based on
the company's prospectus.67 A prospectus has been defined in s 226 of the Capital Markets and Services
Act 2007 ('CMSA') as follows:
prospectus means a notice, circular, advertisement or document inviting applications or offers to subscribe for or
purchase securities, or offering any securities for subscription or purchase and, unless expressly specified, includes a
supplementary prospectus, replacement prospectus, shelf prospectus, short form prospectus, profile statement,
supplementary shelf prospectus and abridged prospectus

In other words, a prospectus is a document which contains necessary information about a company and an
invitation to the public subscribing to the securities that investors need to know in order for them to make a

Page 13

sound investment decision. Legally speaking, a prospectus is not an offer but a mere invitation to treat.
Therefore, a company's invitation to the public to purchase shares or other securities based on its prospectus
is a mere invitation to treat. An offer is made by the potential applicants and the company is an offeree.
There is a logical reason for this because if a company's invitation to the public to purchase its shares is
regarded as an offer, then every application made by the applicants would be an acceptance. What would
happen then if there are more applications then the shares allotted? A company would be oversubscribed
and it would be placed in an impossible situation.68
5 MLJ i at xxiii
CONCLUSION
It can be concluded that the rationale behind the need for distinguishing an invitation to treat from an offer
capable of acceptance is practical and necessary. Indeed, it would be absolutely impractical if all types of
statements made by the parties are regarded as offers capable of acceptance. The notion which disregards
a clear distinction between an invitation to treat and an offer would undermine the parties' freedom to
negotiate the terms of the contract before its conclusion. The courts in England and Malaysia, in particular,
have recognised the importance of making a clear distinction between an offer and an invitation to treat.
However, to determine what would amount to an offer and an invitation to treat is not an easy task. This is
why the courts have adopted different approaches, ie the 'conventional approach' and 'unconventional
approach' in determining the position of an offer and an invitation to treat. The 'conventional approach'
focuses on formalities and looks into whether a formal offer and acceptance have been made. On the other
hand, the unconventional approach emphasises on a correspondence as a whole and conduct of the parties
in determining the position of an offer and an invitation to treat. It could be said, that the Malaysian courts
tend to follow the prevailing 'conventional approach' in determining whether a statement amounts to an offer
or an invitation to treat. Furthermore, the courts in general, have identified a few situations which would
amount to an invitation to treat and not an offer. However, as it could be seen from the discussion,
sometimes difficulties in distinguishing an offer from an invitation to treat arise even in those situations.

1 The situations which have been identified by the court as invitation to treat have been discussed in detail in the later part of
the paper.
2 [1979] 1 All ER 972.
3 [2001] 4 MLJ 49[2001] 3 CLJ 864.
4 [2012] 8 MLJ 385[2011] 1 LNS 595.
5 [1978] 2 All ER 583.
6 [1974] 3 All ER 824.
7 See Michael Gisler, Katarina Stanoevska-Slabeva and Markus Greunz, Legal Aspects of Electronic Contracts, paper
presented at the workshop on the Infrastructure for Dynamic Business-to-Business Service Outsourcing (IDSO'00), Stockholm,
5-6 June 2000.
8 [1979] 1 All ER 972.
9 [1974] 3 All ER 824.
10 See Richard Stone, The Modern Law of Contract, (7th Ed), Routledge-Cavendish, London, 2008, at p 37.
11 [1978] 2 All ER 583.
12 [1979] 1 All ER 972.
13 See Richard Stone, The Modern Law of Contract, (7th Ed), Routledge-Cavendish, London, 2008, at p 39.
14 Ibid.

Page 14

15 See John N Adams and Roger Brownsword, Understanding Contract Law, (5th Ed), Thomson, Sweet and Maxwell, London,
2007, at pp 52-53.
16 Ibid.
17 [2001] 4 MLJ 49[2001] 3 CLJ 864.
18 [2012] 8 MLJ 385 [2011] 1 LNS 595.
19 Ibid, para [15].
20 [2001] 4 MLJ 49[2001] 3 CLJ 864.
21 Ibid, at p 867.
22 See for instance, the classifications in Syed Ahmad Alsagoff, Principles of the Law of Contract in Malaysia, (3rd Ed),
LexisNexis, Malaysia, 2010, at pp 45-55. See also Krishnan Arjunan and Abdul Majid bin Nabi Baksh, Contract Law in
Malaysia, LexisNexis, Malaysia, 2008, at pp 50-63.
23 (1789) 100 ER 502.
24 Ibid, at p 503.
25 [1972] 3 All ER 462.
26 See AGC (Advances) Ltd v McWhirter [1977] 1 BPR 9454. See also Jeannie Paterson, Andrew Robertson, and Arlen Duke,
Principles of Contract Law, (3rd Ed), Thomson Reuters, 2009, Sydney, Australia, at p 50.
27 The auction 'without reservation' or 'no-reserve auction' or 'absolute auction' is the type of auction where the subject matter
of the auction would be sold regardless of the price. It could be a beneficial factor for the auctioneer because more bidders
might be interested to bid and as a result of their competition a better deals could be achieved.
28 See Warlow v Harrison 920; Barry v Heathcote Ball & Co (Commercial Auctions) Ltd(1859) 120 ER[2001] 1 All ER 94. See
also Jeannie Paterson, Andrew Robertson, and Arlen Duke, Principles of Contract Law, (3rd Ed), Thomson Reuters, 2009,
Sydney, Australia, at p 51.
29 See AGC (Advances) Ltd v McWhirter [1977] 1 BPR 9454. See also Jeannie Paterson, Andrew Robertson, and Arlen Duke,
Principles of Contract Law, (3rd Ed), Thomson Reuters, 2009, Sydney, Australia, at p 51.
30 [1994] 1 MLJ 294.
31 [1952] 2 QB 795.
32 See the decision by the Queen's Bench Division judge, Lord Goddard CJ in Pharmaceutical Society of Great Britain v Boots
Cash Chemists (Southern) LD [[1951] P No 1413[1952] 2 QB 795.
33 See Richard Stone, The Modern Law of Contract, (7th Ed), Routledge-Cavendish, London, 2008, at p 40.
34 Ibid.
35 [1961] 1 QB 394.
36 See s 1 of the Restrictions of Weapons Act 1959.
37 [1953] 1 QB 401.
38 See Jeannie Paterson, Andrew Robertson, and Arlen Duke, Principles of Contract Law, (3rd Ed), Thomson Reuters, 2009,
Sydney, Australia, at p 50.
39 [1959] SASR 295.
40 For further discussion, see Jeannie Paterson, Andrew Robertson, and Arlen Duke, Principles of Contract Law, (3rd Ed),
Thomson Reuters, 2009, Sydney, Australia, at p 50.
41 See the decision of Smithers J in the case of Reardon v Morley Ford Pty Ltd (1980) 33 ALR 417.

Page 15

42 (1985) 58 ALR 737.

43 [1968] 2 All ER 421.
44 [1961] 1 QB 394.
45 [2001] 4 MLJ 49 [2001] 3 CLJ 864.
46 [2009] 4 MLJ 741[2009] 4 CLJ 468
47 [2005] 3 MLJ 431[2005] 5 CLJ 304.
48 [2009] MLJU 1195[2009] 1 LNS 1456.
49 [1964] MLJ 12.
50 [1893] 1 QB 256.
51 [1968] 2 All ER 421.
52 (1870) LR 5 CP 561.
53 [1985] 2 All ER 966.
54 [1990] EWCA 13 [1990] 1 WLR 1195
55 For further detail, see Jeannie Paterson, Andrew Robertson, and Arlen Duke, Principles of Contract Law, (3rd Ed),
Thomson Reuters, 2009, Sydney, Australia, at p 52.
56 [1966] 2 MLJ 33.
57 [2005] 4 MLJ 747.
58 Ibid, para [26].
59 Ibid, para [29].
60 [1893] AC 552.
61 [1982] 2 MLJ 22.
62 Ibid, para [12].
63 Ibid, para [14].
64 Fund-raising activities in Malaysia are governed by the Capital Markets and Services Act 2007 ('CMSA') except for activities
which have been expressly excluded by the CMSA. The regulatory body that regulates the fund-raising activities is the Security
Commission ('SC').
65 See Aiman Nariman Mohd Sulaiman, Aishah Bidin, Pamela Hanrahan, Ian Ramsay, and Geof Stapledon, Commercial
Application of Company Law in Malaysia, (3rd Ed), CCH Asia Pte Limited, Malaysia, 2008, at p 99.
66 See s 15 of the Companies Act 1965 (Act 125).
67 See Krishnan Arjunan and Abdul Majid bin Nabi Baksh, Contract Law in Malaysia, LexisNexis, Malaysia, 2008, at p 58.
68 Ibid.