Corporate and Business Law

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UNIVERSITI TUNKU ABDUL RAHMAN

MAY 2013 SEMESTER

UBML1013 CORPORATE AND BUSINESS LAW  

TUTORIAL QUESTIONS

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TUTORIAL 1  Proposal & Acceptance    

1.        Define a ‘contract’. Explain the essential elements necessary in the formation of a valid contract.

2.        Distinguish between a ‘proposal’ and an ‘invitation to treat’. What are the circumstances that would amount to an ‘invitation to treat’? Explain the importance of distinguishing the two.                                                                      

3.        Bakar is the President of a mountain climbing association situated in Kampar. To encourage and promote the sport of mountain climbing in Kampar, he inserted an advertisement in the local newspapers dated 15th April 2012. In it, he promised that he would pay a sum of RM 5,000 to the first person who reaches the summit of Mount Kampar. The race was scheduled to commence on 1st May 2012 at 8.00 a.m. On the day of the race, the participants gathered in the morning at the foot of Mount Kampar. The race began at 8.00 a.m. Simon Lee was the first person to reach the summit. Thereafter, he approached Bakar to claim the winning price money of RM 5,000 but Bakar refused to pay him stating that it was merely an advertisement and that there was also no acceptance of participation from Simon Lee.

Advise Simon Lee.

Would your advice differ if Bakar had used a loudspeaker to inform the climbers that the mountain climbing event is cancelled after the climbers had already started climbing the mountain?

4.        Babu resides in Kuala Lumpur. His father has left him a house which is located in Penang. Babu has decided to sell the house and utilise the proceeds from the sale to purchase a house in Kuala Lumpur.

        On 19 November 2012, Babu wrote to his good friend Joe offering to sell his house for RM 250,000. Joe received this letter by post on 21 November 2012. On 26 November 2012, Joe posted his reply accepting Babu’s offer.

        In the meantime, Babu’s neighbour, Beng who was aware of Babu’s intention to sell his house, offered to buy the house for RM 300,000. Babu decided not to accept Beng’s offer for the time being since he wanted to first revoke the offer he had made to Joe. Babu then immediately wrote and posted a letter to Joe on 25 November 2012, revoking his offer.

        On 27 November, Joe’s wife, Sandra, noticed a beautiful house next to Babu’s house which was being offered for sale at only RM 200,000. Sandra asked Joe to revoke his acceptance of Babu’s offer. Joe tried telephoning Babu on 27 November but he was unable to contact Babu. Later, on the same day, Joe wrote and posted a letter to Babu revoking his acceptance.