NANYANG TECHNOLOGICAL UNIVERSITY

NANYANG BUSINESS SCHOOL

AB1301 – Business Law

AUG 2018

Worksheet 2: Formation of Contract I: Offer & Acceptance

Discussion Questions

Question 1

(a) View the supermarket online shopping portal at the following url:
https://www.fairprice.com.sg/

Required

Discuss whether the items displayed for sale at the supermarket’s online
shopping portal (shown in the url above) are offers or invitations to treat.

(b) Analyse the formation of a contract using offer and acceptance in the everyday
transaction of boarding the 179 bus to school. Some pertinent facts to take note
of include the following: the no. 179 bus service is run according to a prescribed
timetable or schedule and the bus commuter pays either by cash or with a pre-
paid card.

(c) Analyse the formation of a contract using offer and acceptance in the transaction
of buying a drink from the vending machine. Some pertinent facts to take note of
include the following: the common vending machine usually displays which drink
options are available or sold out, the vending machine accepts coins, gives
change and has a coin return option.

Question 2

Adam, a well-known local speciality coffee roaster is making plans to start a new café
featuring his speciality roasted artisan coffee. Adam wanted to equip his café with
commercial barista machines from Feamie, the famous Italian coffee machine
manufacturers.

Adam, met up with Daisy, the local distributor of Feamie machines, to inquire about
price, availability of the desired barista machine models, and delivery dates. Daisy
provided Adam with a quotation with prices for all the models for cash on delivery basis.
The quotation document also contained Daisy’s standard terms including a clause
allowing Feamie to increase the price of the goods if the costs had risen by the date of
delivery (known as a price-variation clause).

After careful consideration, Adam decided to place an order for a deluxe machine, on 3
months’ instalment credit terms, using his own order form which contained terms and
conditions, but no price-variation clause. Adam’s order form had a tear-off
acknowledgement slip, which contained the words: ‘we accept your order on the terms
and conditions thereon’ (referring to Adam’s order form). Adam delivered his order form
to Daisy in person and Daisy immediately signed the acknowledgement slip and
returned it to Adam.

Required

(a) Depending on your analyses of the facts and the relevant law, discuss the
possible outcomes of a contract (or not) between Adam and Daisy, and whether
the price variation clause is included in such contract, if any.

(b)(i) Would your answer to (a) be different if Adam had sent his order form by post,
with a request for Daisy to reply urgently. Daisy signed the acknowledgement slip
and sent it back by post on 10 January to Adam’s address. On the same day,
and after she had posted the acknowledgement slip, Daisy received a letter from
Adam withdrawing his offer and on 11 January, Adam received Daisy’s
acknowledgement slip.

(b)(ii) Would your answer to (a) be different if Daisy had scanned the signed
acknowledgement slip and emailed the scanned copy on 10 January to Adam’s
email address as stated in Adam’s order form. On the same day, but after
sending off the email, Daisy received a letter from Adam withdrawing his offer
and on 12 January, Adam read Daisy’s email.

MCQs

1. Which of the following statements is true?

(a) An offer cannot be withdrawn after it has been communicated to the offeree
(b) An offer must be communicated to the offeree either in writing, orally or by conduct
(c) An offer that has not been withdrawn can last forever
(d) An offer must be made to a specific person and cannot be made to members of the
public

2. Which of the following statements is true?

(a) A conditional acceptance is sufficient to form a contract
(b) An acceptance “subject to contract” means that the offeree is bound
(c) An acceptance that has been communicated to the offeror cannot be revoked
(d) An acceptance can be terminated by lapse of reasonable time

3. The postal acceptance rule applies to

(a) All postal acceptances
(b) Revocation of an acceptance
(c) Postal acceptances where both parties agree or reasonably contemplate at the time
of contract that the post shall be the mode of communication
(d) Rescission following repudiatory breach of contract
4. Which of the following statements is true?
(a) A counter-offer is a rejection of an offer
(b) An offer can be withdrawn after it has been accepted by the offeree
(c) Communication of the withdrawal of an offer can only be made by the offeror himself
and cannot be made through an agent or by a reliable third party
(d) An offer is an acceptance of an invitation to treat

5. Section 14 of the Electronics Transactions Act (‘invitation to make an offer’) applies

to
(a) Advertisements that are published in hard copies of newspapers
(b) All advertisements that are communicated by one party to another, regardless of the
form in which the advertisements are made
(c) Advertisements through electronic communications to a specific party
(d) Advertisements through electronic communications that is generally accessible to
parties making use of information systems

© Associate Professor Erin Goh (Jan, 2018)