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BTW1042 - MID TERM TEST - Sem 1, 2024 - Suggested Answer

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131 views2 pages

BTW1042 - MID TERM TEST - Sem 1, 2024 - Suggested Answer

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vyap0001
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BTW1042 – MID TERM TEST QUESTION

Boram Keshave (“BK”) is a great painter and makes a living by selling his paintings. During a
recent one day exhibition (10.00am to 6.00pm) at the Seri Setia Convention Centre in Shah
Alam, BK had offered for sale a painting on the “A Famosa” in Melaka.

He had displayed his advertisement as follows: “Offer for sale for cash RM20,000.00 - A
Famosa”.

One of BK’s friend, Bosco, came to know about the exhibition in facebook and saw the painting
of the “A Famosa” which BK had offered for sale. Bosco immediately called BK at 11.00am and
expressed his interest to purchase the painting for RM15,000.00 cash.

BK told Bosco that he had no intention at all of selling the painting for any amount less than
RM20,000.00. However, Bosco being his longtime close friend, BK was willing to accept a sum
of RM18,000.00. BK informed Bosco that he will hold the painting until 5.00pm for Bosco.
Bosco told BK that he has an urgent business meeting in Kuala Lumpur with some overseas
investors but will try his best to make it by 5.00pm to the Seri Setia Convention Centre.

Bosco managed to arrive at the Seri Setia Convention Centre at 4.50pm and wanted to pay BK
and collect the painting, however, BK told him that he had just sold the “A Famosa” to a
customer, Ms Serena at 4.30pm for RM20,000.00. BK told Bosco that he had called him at
4.20pm to inform him that he has decided to sell the painting to Ms Serena, as he thought that
Bosco would not make it by 5.00pm and the exhibition will end at 6.00pm. Bosco told BK that he
had switched off his phone as he was driving.

Bosco was upset with BK, as he felt that BK could have easily waited for another 30 minutes
before selling the painting.

Based on the principles of offer and acceptance, state whether there is a valid contract between
BK and Bosco.

(Total: 15 marks)

Suggested points:

1st Issue:

Whether the display of the painting by Boram Keshave (“BK”) is an Offer?

The display of the painting is not an offer but an invitation to people to make an offer to BK
(Partridge v Crittenden/Gibson v Manchester City Council/Fisher v Bell). It is Bosco who
had made an offer to BK for RM15.000 cash; S2(a) Contracts Act 1950 (“CA”).

BK did not accept the offer by BK but as a gesture of friendship agreed to sell the painting to
Bosco for RM18,000.00. S7(a) CA provides that acceptance must be absolute and unqualified.
Therefore, by agreeing to sell the painting for RM18,000.00, BK had made a counter offer to
Bosco (Hyde v Wrench/Malaysian Flour Mills Bhd v Saw Eng Chee). The counter offer is
basically a new offer by BK and terminates the original offer made by Bosco.
2nd Issue: Whether there was a valid revocation of offer by BK to Bosco?

Before selling the painting to Serena at 4.30pm, BK had called Bosco at 4.20pm informing him
that he had decided to sell the painting to Serena, that is revoking the offer to Bosco before
Bosco’s acceptance of the said offer.

Section 5(1) CA provides that revocation of offer must be made communicated to other party
before acceptance. Section 4(3) CA provides that communication of revocation of either offer or
acceptance must come to the knowledge of the other party concerned.

It is therefore argued that eventhough BK called Bosco at 4.20pm, Bosco was not aware of the
revocation of the offer by BK. Even after reaching the Convention Centre, there was no
obligation for Bosco to return BK’s missed call, if at all he had seen the missed call. Even if BK
had sent a message, Bosco may not have checked or seen the messages before 5.00pm. Under the
circumstances, clearly the revocation of offer was not communicated to Bosco before 5.00pm.

BK should not have assumed that Bosco may not make it in time before 5.00pm to the
Convention Centre and knowing that Bosco did not pick up his call, should have at least waited
for about 30 minutes, that is until 5.00pm before selling the painting to Serena since the
exhibition only ends at 6.00pm. Bosco notwithstanding his business meeting, did say that he will
try to make it by 5.00pm.

Therefore, there is clearly a contract between BK and Serena and also a contract between BK
and Bosco. Bosco will be entitle to sue BK for breach of contract.

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