Explanation of Law

Explanation of Law

Proposal is a firm promise. A proposal is made ‘when one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to the act or abstinence’. S. 2(a) of Contract Act 1950. The proposal is accepted when fulfill the terms of offer and it is define in S. 2(b) of Contract Act 1950 as ‘when the person to whom the proposal is made signifies his assent thereto’. Upon such acceptance, an agreement is created as between the parties. (Preston Corporation Sdn Bhd v. Edward Leong [1982]; Ho Ah Kim v. Paya Trubong Estate Sdn Bhd [1987]).

Then the acceptance must be absolute and unqualified by S. 7(a) of Contract Act 1950.

By S. 4(1) of Contract Act 1950 is provide that communication of a proposal is complete when it is comes to the knowledge of the offer. (R v. Clarke [1927]).

From S. 6(a) of Contract Act 1950 defines a proposal is revoked as the communication of notice of revocation by the proposer to the other party, and can any time before acceptance. (Byrne v. Van Tienhoven [1880])

Proposal and option is where the proposer is promise to keep a proposal open for a duration of time, he is liberty to withdraw the proposal at any time before acceptance before acceptance of the proposal. Where the offeree has paid a sum of money or provided consideration to the proposer in return for the proposer’s promise to keep the proposal open for an agreed period of time, then the proposer’s promise has becomes legally binding and the proposer is not allowed to withdraw the option contract before the expiry of its stated duration. (Routledge v. Grant [1828]; Von Syun Mooi v. Yap Mooi Mooi [1984])

An invitation to treat is a sort of preliminary communication which occurs between the parties at the stage of negotiation. An advertisement is considered to be an offer when the proposal is made to the world large then anyone who