Question

Explain any THREE (3) ways how a proposal can be revoked as provided in Contracts Act 1950. (10 mark)

Answer 1

There may be situations where an offeror who has communicated his offer changes his mind and wishes to withdraw his offer.The Contracts Act 1950 provides for the rules as to (i)when an offer may be revoked and when the communication of revocation is complete,and (ii)the different modes to revoke an offer.[1]

An offer may be revoked when at any time before the communication of its acceptance is complete as against the proposer,but not afterwards as stipulated in S.5(1) of the Contracts Act 1950.[2]This section can't stand alone and it should be read with S.4(2)(a) of the Contracts Act 1950 on communication of acceptance as against the proposer which clearly states that the communication of an acceptance is complete as against the proposer which states that the communication of acceptance is complete as against the proposer,when it is put in a course of transmission to him,so as to be out of the power of the acceptor.[3]

Reading both sections together,thus,an offer may be revoked at any time before the acceptance has been sent to the proposer.Therefore,even though the proposer has put his proposal in a course of transmission to acceptor,the proposer is still free to revoke it as long as the acceptor's acceptance has not been put in a course of transmission to the proposer,so as to be out of the power of the acceptor.This rule is explained in an illustration to Section 5 of the Contracts Act 1950 that 'A may revoke his proposal at any time before or at the moment when B post his letter of acceptance,but not afterwards'.

It is however still necessary to determine when the communication of the revocation of the proposal is complete.Section 4(3) of the Contracts Act 1950 provides that the communication of a revocation is complete (a) as against the person who makes it,when it is put into a course of transmission to the person to whom it is made,so as to be out of the power of the person who makes it and (b) as against the person to whom it is made,when it comes to his knowledge.

Thus,the communication of revocation of a proposal is complete as against the proposer who revokes,when he has sent out the notice of his revocation.However,it will only be completed as against the person to whom it is made when the said person receives the notice of revocation of the proposal.In the common law case of Byrne & Co v Leon Van Tienhoven& Co,its stipulated that the defendants posted a letter in Cardiff on October 1,addressed to the Plaintiff in New York offering to sell 1,000 boxes of tinplates.It should be noted that it takes 10 or 11 days for a letter posted at their place to reach the other.On October 11 and confirmed it in a letter posted on Ontober 15.[4]The letter of revocation reached the Plaintiff on October 20.It was held that the revocation of offer was inoperative until October 20,that the offer,therefore continued to be open up to that date and that it had been accepted by the Plaintiff in the interim.Lindley J stated;

It may be taken as now settled that where an offer is made and accept by letters sent through the post, the contract is completed the moment the letter accepting the offer is posted (Harris's Case (1872) 26 LT 78L Ch App 587; Dunlop v. Higgins (1848) 1 HL Cas 381), even although it never reaches its destination ... they are based upon the principle that the writer of the offer has expressly or impliedly assented to treat an assented to him by a letter duly posted as a sufficient acceptance and notification to himself, or, in other words, he has made the post office his agent receive the acceptance and notification of it; but this principle appears to me to be inapplicable to the case of the withdrawal of an offer. In this particular case I can find no evidence of any authority in fact given by the plaintiffs to the defendants to notify a withdrawal of their offer by merely posting a letter; and there is no legal principle or decision which compels me to hold, contrary to the fact, that the letter of the 8 October is to be treated as communicated to the plaintiffs on that day or on day before the 20th, when the letter reached them. [5]

But before that letter had reached the plaintiffs they had accepted the offer, both by telegram and by post; and they had themselves resold the tin plates at a profit. In my opinion the withdrawal by the defendants on the 8 October of their offer of the 1st was inoperative; and a complete contract bind on both parties was entered into on the 11 October, when the plaintiff accepted the offer of the 1st, which they had no reason to suppose had been withdrawn.

Lindley LJ also took the occasion to explain the reasoning behind rules and continued as follows:

Before leaving this part of the case it may be as well to point out extreme injustice and inconvenience which any other conclusion we produce. If the defendants' contention were to prevail, no person had received an offer by post and had accepted it would know position until he had waited such a time as to be quite sure that a letter withdrawing the offer had not been posted before his acceptance of it.It appears to me that both legal principles, and practical convenience require that a person who has accepted an offer not known to him to have been revoked shall be in a position safely to act upon the footing that the offer and acceptance constitute a contract binding on both parties.[6]

The problem on whether an offer is or might not be irrevocable traditionally is one of the most controversial issues in the context of contract formation. Since there is no prospect of reconciling the two basis approaches followed in this case by the legal system is different, the approach of the common law according to which the bid as cancellation regulations, and the opposite approach followed by most of the system of civil law, the only possibility that remains is to choose one approach as the main rule, and the other as an exception.[7]

An indication that the offer is irrevocable may be made in different ways, the most direct and obvious that is a tangible reality to that effect by the offeror (eg "This is a firm offer"; "We will continue to offer us so that we receive your answer "). It can, however, only be inferred from other statements by, or conduct of, the offeror. Hint time for acceptance may, but not necessarily, amount by itself to an implicit indication of an irrevocable offer. The answer should be no yeast in each case through a proper interpretation of the terms of the deal according to various criteria established in the general rules on interpretation in Chapter 4. In general, if the offeror operates in a legal system where the fixing of a time for acceptance is considered indicate irrevocability, it can be assumed that by specifying a fixed time the offeror intends to make an offer irrevocable. If, on the other hand, the offeror operates in a legal system where the timing of the receipt is not sufficient to indicate irrevocability, the offeror will not normally have any intention.[8]

Illustrations

1.Ali, a travel agency, informs a client of a cruise in its brochure for the coming Festival holidays. It urges the client to book within the next three days, adding that after that date there will probably be no more places left. The statement by itself will not be considered to indicate that the offer is irrevocable during the first three days.      

2. D invites E to submit a written offer of the terms on which E is prepared to construct a building. D presents a detailed offer containing the statement “Price and other conditions are not good after 1 September”. If D and E operate within a legal system where such a statement is considered to be an indication that the offer is irrevocable until the specified date, D can expect the offer to be understood as being irrevocable. The same may not necessarily be the case if the offeree operates in a legal system where such a statement is not considered as being sufficient to indicate that the offer is irrevocable.

Exceptions to the general rule regarding the revocability deal, where "it was reasonable for the offeree to rely on the offer as irrevocable", and "the offeree has acted in reliance on the offer", is an application of the ban general principles inconsistent behavior laid down in Article 1.8. Dependence reasonable offeree may have been caused either by the conduct of the offeror, or by the nature of the offer itself (eg bid acceptance requires extensive investigation and expensive of the offeree or an offer made in order to allow the offeree in turn to make offer to third parties). The acts which the offeree must have performed in reliance on the offer may consist in making preparations for production, buying or hiring of materials or equipment, incurring expenses etc., provided that the act may be regarded as normal in the trade concerned, or should otherwise have been foreseen by, or known to, the offeror.

3. Ameera, an antique dealer, asks Bahri to restore ten paintings on condition that the work is completed within three months and that the price does not exceed a specific amount. Bahri informs Ameera that, so as to know whether or not to accept the offer, Bahri finds it necessary to begin work on one painting and will then give a definite answer within five days. Ameera agrees, and Bahri, relying on Ameera’s offer, begins work immediately. A may not revoke the offer during those five days.

4. Ameera seeks an offer from Bahri for incorporation in a bid on a project to be assigned within a stated time. Bahri submits an offer on which Ameera relies when calculating the price of the bid. Before the expiry of the date, but after Ameera has made the bid, Bahri informs Ameera that it is no longer willing to stand by its offer. Bahri’s offer is irrevocable until the stated date since in making its bid Ameera relied on Bahri’s offer.

Bids are an expression of willingness to contract on certain terms, made with the intention that it will become binding as soon as it is received by the person to whom it is addressed. Cancellation refers to cancel or revoke a previously made.Cancellation of deals is the withdrawal of the offer by the offeror so that it is no longer acceptable. The cancellation will take effect as soon as it is known to the offeree. The offeror may revoke the offer before it has been received, but the revocation should be communicated to the offeree .[9]

Offers may be terminated in any one of the following ways:Revocation of the offer by the offeror, counteroffer by offeree,rejection of offer by offeree,lapse of time,death or disability of either party; or performance of the contract becomes illegal after the offer is made.

The general rule is that the revocation is effective only when it is made known to the offeree.Until it is communicated to the offeree, directly or indirectly, the offeree has reason to believe that there still is an offer that may be accepted.The offeree may rely on this belief. If the offeror seeks to revoke the offer, but the offeree accepts the offer before notice of the revocation, a valid contract is created.[10]

A conditional acceptance is a counteroffer. For example;

Jones accepts the $10,000.00 price, but adds a term by stating that new tires must be put on the car, this is a conditional acceptance and therefore a counteroffer.A rejection terminates an offer.A rejection is an offeree’s communication that an offer is unacceptable.When an offer states that it will be open until a particular date, the offer terminates on that date if it has not yet been accepted.This is particularly clear when the offeror declares that the offer shall be void after the expiration of a specific time. If the time passes, and the offeree attempts to accept the offer, this is in effect a counteroffer from the offeree and can be accepted or rejected by the offeror.

If the offer does not specify a time, it will terminate after a reasonable period of time has passed.What constitutes a reasonable time depends on the circumstances of each case.For example, if the commodity to be sold or purchased is a perishable commodity, such as food, the reasonable time would be shorter than if the matter to be sold is machinery.If either the offeror or the offeree dies or becomes mentally incompetent before the offer is accepted, the offer is automatically deemed to be terminated.

If the performance of the contract becomes illegal after the offer is made, the offer is deemed to be terminated.For example, if there is an offer made to sell alcoholic beverages to a store, but a city ordinance is passed prohibiting the sale of alcoholic beverages before the offer is accepted, the offer is terminated.If the offeror does not otherwise specify, a mailed acceptance takes effect when the acceptance is properly mailed.This is known as the “Mailbox Rule.”If the offeror specifies that an acceptance shall not be effective until received, there is no acceptance until acceptance is received.The Mailbox Rule also would not apply in a situation where the offeror requires receipt of a payment to accompany an acceptance. Improper mailing of an acceptance can cause the acceptance to take effect only when received.

Smith owned land. Jones mailed an offer to Smith to buy his land.Smith agreed to this offer and mailed back a contract signed by him.While this letter was in transit, Smith orally notified Jones that his acceptance was revoked.Was Smith bound by a contract?Yes, since the acceptance was effective when mailed.Subsequent revocation had no effect.

MODES OF REVOCATION

Once an offer is made, the power of acceptance created receiver of the offer; if he accepts the offer, the offeror must perform. Termination of deal put this power. Bids can only be terminated before the offeree accepts it. Termination can occur through the actions of any parties or by operation of law.[11]

The offeror may revoke the offer as long as it is not accepted by the offeree. An offer may be terminated in various ways:

• Communication to the offeree

Communication termination of the offer can be given directly or indirectly. Indirect communication might involve a third party that tells the offeree offerer's cancellation. Indirect communication shall be correct, provided by reliable sources and understandable to the example of "a reasonable person." A tender to B then sells the goods to C before B received. The act of selling another is a reasonable indication of cancellation if B realized sales. However, if B is not notified of cancellation A - either directly or indirectly -Before he accepted, then acceptance is valid and must be sold to B.

• Publication

The offer made by the publication may be revoked by the publication. Unlike direct and indirect communication, the revocation is effective when published, not when it is received by the offeree.Offeror generally may terminate the offer, although he promised not to do so. However, an offer can not be withdrawn in certain circumstances.

• Harmful Reliance

Bids can not be withdrawn for a reasonable time period if the offeree relied detriment to the deal is being held open, and it was reasonably foreseeable to offerer that the offeree will thus depend. Example: A general contractor bid depends on the sub-contractors in determining the overall cost of the work.

• Options

If the recipient of the offer consideration for a promise that the offer will remain open, it must be. It is, basically, a contract to shrink.

Example: A gives B $ 20 for not revoke his promise for two weeks. Section 87 of the Restatement (Second) holds an option contract is valid even if no reply is real, as long as the judgment was read out in a written and signed document.

• Performance Partial Unilateral Contract

Traditionally, unilateral contract is revocable at any time prior to completion of the required performance. For example, a promise to pay B $ 100 if B crossed the bridge. B "accept" just to cross the bridge. A can cancel at any time before B reaches the other side. Today, the majority view and the Restatement (Second) is a contract formed when performance begins (ie, when B began crossing), provided it is completed within a

reasonable time. the offeror can not cancel, but the offer can continue their progress at any time. However, preparations for the start of the performance is not considered a partial achievement (ie when wearing shoes B-crossing bridge and said he had a spell of pre-junction).

• Firm Offers

A writing signed by a dealer to buy or sell items that have strict terms and guarantees that the offer will be open enforceable, even without consideration. timeframe:

1. Period stated;
If the period is actually stated, the offer will remain open for the stated period or three months, whichever is less.

2. If the period is not stated, the offer remains open for a “reasonable time,” not to exceed three months.

With the notice of cancellation,offer may be revoked by a sign of a notice of cancellation by the recipient of an offer to the other party before full acceptance to the offeror itself. An offer made in writing can be canceled by word of mouth. Notice of cancellation may not always express. Effective cancellation notice must be delivered to the offeree. With the lapse of time,the proposal will come to an end by the interval specified in any proposal to its adoption or, if no time is prescribed by the lapse of time so that a reasonable time is a question of fact depending on the circumstances of each case. Where the subject matter of the contract are goods, such as gold, the parties are changing every day in the market, short period of time would be considered reasonable made late.[12]

With the foregoing are not eligible,One proposal is canceled if the recipient fails to meet the conditions precedent to the acceptance of the proposal, which is a conditional offer. Thus, X may offer to sell certain goods to Y in terms of Y to pay a certain amount before a certain date. With the death or insanity. One proposal is canceled by the death or insanity of the proposer if the fact of death or crazy he came to the attention of the recipient before acceptance.

With a counter-offer,An offer came to an end when the offer was made a counter offer or reject the offer. Any bids received with some modifications in the terms of the offer or with some other conditions do not become part of the offer, the acceptance that it deserves to counter-offer.The non-acceptance of the offer in accordance with the prescribed or normal mode. The offer also will stand canceled if it is not received by the set.With the illegal turn. An offer of a mistake if it becomes illegal after it is made and before it is accepted. Thus, where an offer is made to sell 10 bags of wheat to Rs. 2500 and before it is accepted, the law prohibits the sale of wheat by private individuals are included, the offer came to an end.

By notice of revocation, Offer may be revoked by a communication of a notice of revocation by the offeree to the other party before acceptance is complete against the offeror himself. An offer made in writing may be revoked by words of mouth. The notice of revocation may not always be express. A notice of revocation to be effective must be communicated to the offeree.By lapse of time. A proposal will come to an end by the lapse of time prescribed in such proposal for its acceptance or, if no time is so prescribed by the lapse of time of reasonable time is a question of fact depending upon the circumstances of each case. Where the subject matter of the contract is an article, like gold, the parties of which fluctuate daily in the market, very short period will be regarded as reasonable made late in november.

By non-fulfillment of condition precedent,A proposal is revoked when the acceptor fails to fulfill a condition precedent to the acceptance of the proposal which was conditional offer. Thus, X may offer to sell certain goods to Y on a condition that Y pays a certain amount before a certain date.By death or insanity. A proposal is revoked by the death or insanity of the proposer if the fact of his death or insanity comes to the knowledge of the acceptor before acceptance. By counter offer. An offer comes to end when the offeree makes a counter offer or rejects the offer. Where an offer is accepted with some modification in the terms of the offer or with

some other condition not forming part of the offer, such qualified acceptance amount to a counter offer.[1]
By the non-acceptance of the offer according to the prescribed or usual mode. The offer will also stand revoked if it has not been accepted according to the prescribed.By subsequent illegality. An offer lapses if it become illegal after it is made and before it is accepted. Thus, where an offer is made to sell 10 bags of wheat for Rs. 2500 and before it is accepted, a law prohibiting the sale of wheat by private individual is entered, the offer comes to end.

Revocation of offer must be at any time before its acceptance is complete as against the offeror, revocation must be communicated to the offeree.By communication of notice of revocation at any time before the acceptance of offer is complete as against the offeror.In the acceptor does not become bound merely by posting his acceptance.He becomes bound only when his acceptance comes to the knowledge of the proposer.The gap of time between the posting and the delivery of acceptance can be utilised by the acceptor for revoking his acceptance by a speedier communication which will overtake the acceptance.The peculiarity is that after an acceptance is posted and before it comes to the knowledge of the offeror, only one party, i.e. the offeror, is bound. The acceptor has still the right to repudiate the contract by revoking his acceptance.

An offer is when someone indicates his willingness to do or refrain from doing something to get the approval of other parties to the action or abstention as stated in the tender. Bids can also be called as a backup. It is the first part of the deal. (Agreement = bid + reception)

Under the terms of the offer is valid:

1) Communication - An offer must be communicated to the offeree (the person to whom the offer was made is the offeree). Unless it is delivered it will not come to the knowledge of a very important person. Communication is a full bid to the offeror when the offer came to the knowledge of the deal. An offer if canceled must do so before the deal came to the knowledge of the offer.

2) Definite - An offer must be clear in the terms and conditions. In other words the bid can not be vague. It has to be 100% sure about what is contained in it. Terms situation where the price of everything has been mentioned. example: A offers to sell to B a scooter to 5000 or 10000. This is not a valid bid as a bid not sure about the price.

3) The intention to establish a relationship- law because the contract is enforceable legal agreement, the purpose of an offer or proposal is to establish a legal relationship with others.

4) Obtain approval of the other party - An offer must be made with the intention to obtain the consent of other parties to offer to complete the deal.

5) Offer can not contain a period, not compliance of acceptance - There should be no terms in the offer saying that if you do not agree with this or that says if you do not respond within this time and that time I assume that you have accepted the offer it. Acceptance is something that needs to be given to the recipients of the offer, the terms of the offer may not make acceptance by non-compliance.

6) Bids must be something that is able to be implemented: eg: A offers to pay rs 1000 b if B finds treasure through magic. Here it is found impossible and therefore it is not valid.

7) Bids should be distinguished from the invitation to offer: Example: Grocers catalog displays prices, Bankers exposure to interest rate, tender, auction, train schedules all inviation offer. If A goes to the store and picked up valuable books and shopkeepers refuse to sell 500, A does not have the right to shopkeepers as books featured only an invitation to offer.

Cancellation of offer:

An offer may be withdrawn by the following ways:

1) Notice of Cancellation: An offer may be revoked by notice of cancellation. Notice of cancellation must be given before the deal is complete communication to the offeror.

2) interval: A deal gets canceled when the offer is not accepted within a specified time, or if there is a short period of time specified then it must be received within a reasonable time period.

3) Qualified acceptance: acceptance is one of the requirements that it must be absolute and must be received in the prescribed form. If the recipient does not accept the offer in the prescribed form and add your own state is a qualified acceptance and canceled the original bid.

4) Death and Insanity offeror - If the offeror dies or becomes insane and this came to the knowledge of the offer before making acceptance, the offer will be canceled.

An offer errors after a set time or reasonable. An offer of a mistake if acceptance is not submitted within the time specified in the offer, or if no time is specified, within a reasonable time. [Sec. 6 (2)]. Is that a reasonable time is a question of fact depending on the circumstances of each case. for example, the offer made by telegram indicates that the response is required immediately and if the offeree communication delay its acceptance even by one or two days, the offer will be deemed to have lapsed.[13]

The offer is not accepted in error with the specified mode, or otherwise made set, in some ways ordinary and reasonable. But, according to section 7, if the recipient does not receive an offer in accordance with the set mode, the offer is not accepted the offer in accordance with the set mode, the offer does not expire. It is the offeror stressed that his proposal would be accepted only in the offeror determined to assert that his proposal would be accepted only in the prescribed manner, and if he does not do so he is considered to have received acceptance.

Offer a mistake with rejection. An offer of a mistake if it has been rejected by the offeree. It may express its disapproval, with words spoken or written, or implied. implicit rejection is one (a) if one of the offeree makes other alternatives, or (b) if the offeree gives conditional admission.An offer wrong with the death or insanity of the offeror or the offeree before acceptance. If the offeror dies or becomes insane before acceptance, the offer will expire on condition that the fact of death or crazy he came to the attention of the recipient before acceptance [sec. 6 (4)]. From the language section, it can be concluded that the acceptance of ignorance of death or insanity of the offeror, the acceptance of legitimate, and lead to a contract. Therefore the fact of death or insanity of the offeror's bid will not stop until it came to the knowledge of the recipient before acceptance. death or insanity of the offeree before the offer put an end to offering and their heirs can not accept him (Reynolds vs Atherton).[14]

Offer a mistake by the cancellation. Offer is revoked when it was withdrawn by the communication notice of cancellation by the offeror to the other party [sec. 6 (1). For example, at auction, A makes the highest bid. But he withdraws bid before the fall of the hammer. There can be no contract because the offer was revoked before acceptance. Cancellation by the non-fulfillment of a condition precedent to acceptance. An offer stand canceled if the recipient does not meet the conditions precedent to acceptance [sec. 6 (3)]. Thus, where A, offer to sell scooters to B to Rs. 4,000. if B joined the club in the last week found the lion stood canceled and can not be accepted and the height B if B fails to join the club of lions. (In default of payment of earnest money.)

An offer wrong with subsequent illegal or destruction of the subject matter. An offer wrong if it violates the law after it is made, and before it is accepted. Thus, where an offer is made to sell 10 bags of wheat to Rs. 6500 and before it is accepted, the law prohibits the sale of wheat by private individuals enacted, the offer ends. In the same way, the offer may lapse if the matter, which became the subject of the offer, destroyed or significantly impaired before acceptance.

Cancellation means an offer be withdrawn by the victim. The general rule was established in Payne v Gua that the offer can be withdrawn at any time prior to acceptance occurs.[15] However, the revocation must be effectively communicated directly or indirectly to the offeree before acceptance. This is supported by Byrne v Van Tienhoven, where the withdrawal of the bid submitted by telegram has been held to be served only when a telegram was received. In addition, adequate communication need not be made by the offeree personally but through a third party in Dickinson v Dodds.[16] In Routledge v Grant , the offer may still be released even though it specifically states that it will remain open for a predetermined period when the promise was to leave open offer is not supported by any consideration given by the offeree.However, as soon as the offer is accepted by mail, ie, mail, postal regulations will be strictly liable and will not allow the withdrawal.[17] Conversely, when the offer was accepted and acted upon, it is irrevocable, non-compliance is a breach of contract. In Errington v. Errington,in which unilateral bid has been made, the court ruled that while the amounts paid by the son and daughter-in-law, father bids can not be canceled. The rationale given by Lord Denning is that "... They were acting appointment and any father not his widow, the successor in title, can drive them without regard to that." In this scenario, once the offeree to rely on the offer and start it, the offer can not be terminated.[18]

An offer is terminated when the offeree's refusal to communicate to the offeror. Therefore, the offeree makes a counter-offer and introduced a number of new deals to the rejection of the original offer. In Hyde v Wrench, Lord Langdale decided that a counter-offer that is offered by the offeree terminated the original offer. Therefore, "... thus rejected the offer previously made by the defendant (the offerer)." However, this must be distinguished from the situation when the offer is exclusively meant for further information from the offeror, and did not make a counter-offer. In Stevenson, Jacques v McLean investigation simply not be considered as a rejection.[19]

It would be impractical if the offer was accepted after unreasonable delay on the part of the offeree, the Court stated in Ramsgate Victoria Hotel v Montefiore that the offer will lapse if it is opened for a certain period of time and the time limit expires, where there is no express time limit, deals are usually opened only for a reasonable time. reasonable length depends on the circumstances of the case in respect of deals involving other types of things, the definition of a reasonable time depending on demand for the subject matter and price fluctuations.[20]

Bids that clearly provides that it is to terminate upon the occurrence of unacceptable conditions after the condition has occurred and any provisions that may be implied. In other words, the termination of the offer can also be caused by conditions not met. For example, in the financing Ltd v Stimson offer was made in an implicit, or a car that maintains a state that is not broken is a conditional precedent. Since the car was stolen from a dealer and damaged, the offer is terminated when a state fails and becomes incapable of being accepted.

Another issue that is required in the circumstances will be the ability of both parties to the contractual obligations. Loss of contract either by the offeror or the offeree will terminate the offer and the capacity loss is usually evidenced by the appointment by the court.

The death of either the offeror or the offeree will cause termination: the right to receive regular offers are not transferable. Bids are not received from someone who has died can not be converted into a binding contract estate. In Dickinson v Dodds ,Mellish LJ said 'if a man who died in the tender offer was unacceptable after he was dead.' In contrast, in Reynolds v Atherton, Warrington LJ [21]stated that the offer "made to a living person who has ceased to be the people who lived before the offer was accepted ... no longer a bargain at all.[1]"If the offer is accepted by the offeree, the contract is formed and bring the offer ends. It can be made either orally, in writing, or by implication behavior when they are received by the offeror. However, in Felthouse v Bindley .The court refused to impose an obligation on the recipient of an offer to decline the offer and went on to state that the silence does not amount to acceptance.

Finally, changes in the law that makes illegal the potential contract would terminate the deal, because the court will not enforce an illegal contract. In conclusion, the offer may be terminated by cancellation, Rejection, interval, Conditional Offer, operation of law, Death, Acceptance and illegal.

Requirements for intention to create legal relations in the law of contract seeks to filter out cases that are not really appropriate for the court action. Not every agreement leads to a binding contract that can be enforced through the courts. For example, you may have an agreement to meet friends in a pub. You may have a moral obligation to honor the agreement, but not a legal obligation to do so. This is because in general the parties to the agreement does not intend to be bound by the law and the law is intended to reflect the will of the party. In order to determine which agreements are legally binding and has the intention to create legal relations, law draw the distinction between social and domestic agreements and the agreements made in a commercial context.[22]

As Sukys explanation "he said the offer was a proposal made by one party (the offeror) to another (offered) who indicated a willingness to enter into a contract, and Jenety word refrain from performing some act specified in the future.An offer is to show the conditions of one person (the offeror) communicated to others (offeree) instructions / recommendations could not accept or refrain from doing a specified act, as the authors called.

Bids may be terminated if the recipient refuses the offer and expressed reluctance to accept the offer rejection occurs when the recipient submitted a bid.Bids may also be terminated by the cancellation of the offer can recall the offer before the offer was accepted.Bids can also automatically revocated when deals have a definite time limit expired before acceptance.An offer can revocate by releasing the set time limit as long as reasonable, the time element is determined by the surrounds and circumstances, goods perishable, price fluctuations, supply and demand factors.

Death or madness may also cancel the bid has not been accepted, both events preclude the possibility of a meeting of minds.Destruction of a matter relating to the offering may also automatically revoke the offer is also able to automatically cancel the bid unlawful strict laws that will make presentations expects agreement illegal revocates existing bid, any attempt receiving such an offer would be unenforceable.

Bids may be terminated by the actions of the parties in any way by the refusal or cancellation of the counter offer. Offeror may reject the offer before received while inference can cancel the original offer by simultaneously making new deals. Failure precondition some offers are subject to conditions if such conditions are in place (met) the offer expired eg: I can offer to rent my house if I build a second home at the end of the month.[23]

The withdrawal of a bid is sometimes described as the cancellation of the bid, both the offeror and the offeree may change their minds and withdraw the offer. Counter offer also terminate the offer, disrupting the original bid the offeror may decline. (Elliott & Quinn page 9-18) The JENTS Elliott, Quinn Brown and Sukys, "Bids may be terminated by the ways, cancellation, denial and counter offer bid"An offer not stay valid forever. There are some events in our daily lives and as the principles of the contract, the effect is to terminate the offer.[24]

Termination and bid called by section 6 of the law of contract which reads as follows.

One proposal is canceled

a) With the delivery of notice of cancellation by recommending to another party

b) At the interval specified in any proposal for its adoption.

c) With the failure of the receiver to meet the conditions precedent to acceptance.

d) With the death or insanity to suggest, if the fact of death / crazy to come to the knowledge of the recipient before receipt 5.6 (d) LCA.REMSGATE VICTORIA HOTEL V MONTE FIORE (1866)

e) Death

• If the contract is personal service or performance art with specific individuals involved, it would end if the person died.

• If it is not an offer of a personal nature it can continue BRADBURY V MORGAN (1862)[25]

f) Cancellation

• A bid may be canceled / withdrawn at any time prior to acceptance of the offeror must notify the recipient of an offer as soon as capital expenditure took place CONFETTI V WARNER MUSIC RECORDS UK (2003)[26]

• It is important to note that the deal must be canceled by the person who made the statement or it can also be canceled by the person authorized to act on / behalf.

Contract law s.3 of the Act provides that the cancellation of the bid must be made subject to the following rules;

• It must act passed, this means that it must come to the knowledge of the deal, if not, it is not effective.

• Cancellations must be made before the offer was accepted (s.5 (1) (LCA 2002)

• Similarly, the offer may be terminated if it is rejected by the recipient of an offer by any of the following acts;

1. If he found the twins

Contract law s.3 of the Act provides that the cancellation of the bid must be made subject to the following rules;

• It must act passed, this means that it must come to the knowledge of the deal, if not, it is not effective.

• Cancellations must be made before the offer was accepted (s.5 (1) (LCA 2002)

• Similarly, the offer may be terminated if it is rejected by the recipient of an offer by any of the following acts;

1. If he found the twins

1. If he / she made a counter-offer - stating the new conditions which differ from those contained in the original offer. (See case Hyde Vs Wrench (1840).[27]

2. The simple fact of this case;

• Wrench offer to sell of Hyde in 1000.Hyde purposed in his acceptance willing to buy it at 950. Wrench refused,Hyde then accepted for purchase in 1000.Wrench rejected: Hyde sue him

• Held: reception Hyde is a counter-offer and wrench not required to accept it another case of Brogden V Metropolitan.An offer may lapse due to the passage of time. This can happen when it is stated in the offer is that it is open for a specific time eg "You have until Friday to let me know 'your decision" If acceptance, rejection or cancellation does not apply before Friday deal will expire on that day.If no specific time was given "reasonable time" will be assessed by the court. This will depend on the items.The contract with the case Brogden V METROPOLITAN RAIL CO (1877) where both parties act as if a valid contract exists and behave accordingly.the more recent case shows an interesting variation ordinary counter - offer an Pickfords V Celestica (2003)[28]

• Battle of the Forms - This is an extension of bid and counter scenario applies when both parties have their own "standard form" stationery and it should be set up at the end of the contract period runs.In BUTLER MACHINE TOOL CO V EXCELL O CORP LTD (1979),requests for further information. This should be distinguished from a counter-offer because it does not cancel the original offer and it leaves the original offer open until withdrawn by the offeror STEVENDON V MC LEAN (1886).In this case,A counter-offer must be sufficiently defined to accept (as the original offer) and it should incorporate the changes in terms.

To be capable of acceptance an offer must not only be specific and comprehensive and have been made with intention of being bound,it must also be current.Acceptance made after an offer has ceased to be valid is ineffective to form a contract.This Section examines the means by which offers terminate,other than by the offeree making a counter offer or a rejection.Where an offer is left open idefinitely,there may come a time when the offeree can no longer accept.In Ramsgate Victoria Hotel Co.Ltd V. Montefiore (1866) LR 1 EX 109,the defendant had applied for shares in the Plaintiff's company early June 1864.Shares were alloted to him to him in late November 1864.The defendant refused to pay for the shares although he had not withdrawn his application at the time when the shares were alloted It was held that he was not obliged to go through with the purchase of the shares.It is not possible to give any indication of what is a reasonable time,which will be a question of fact in each case.[29]

In such a contract, the contract should be extended by one party and accepted by the other party to be valid. The party making the offer is called the offeror, the person who receives it is called the offeree.

Usually how it works is the offeror makes an offer to the other party on the terms of the contract. After reviewing the terms of the contract, the offeree will usually respond to the offer by either rejection or acceptance of the offer. However, there may be situations in which the offer was terminated before the other party has the opportunity to accept or reject it.

This is known as the "termination of the deal", and can occur in various ways, for various reasons. Termination of deal is different from the "termination of contract", the contract is not yet fully formed in the termination of the bid.[30]

There are many different ways to bid for the contract can be terminated. This can involve either action by the offeror, the offeree, or other intermittent conditions. Termination of deal may occur by:

• Disclaimer: the offeror usually need to clearly communicate their intention to refuse the offer to the offeror. Refusal or revocation generally found to be effective when the offeree learn from

• Time Lapse: the offeree generally have a "reasonable amount" in which to respond to the offer after they learned of it. This amount of time varies depending on the subject matter of the contract, as well as previous dealings between the parties.

• Death / Disability / Disability Other parties: If the offeror to death, disability, or disabled before the contract offer is accepted, it will usually terminate the offer.

• Conditional admission: If the offeree makes the acceptance conditional (ie, "I will only accept this offer if I can even have a free product"), this is not seen as an acceptance of the offer, but a counter offer.

• Illegal: If the contract has become illegal after the offer was made, the offer will be completed, and the recipient of the offer is no longer valid may accept the offer

There may be other reasons to offer contracts may be terminated, depending on the type of contract and the law involved different. For example, if the subject matter of the contract was rescued destroyed, destruction might act to terminate any bid that has been around at the time.

In the Malaysian case of PT Vision Renewable Fuels v Export-Import Bank of Malaysia Bhd[2015] 8 MLJ 706,The plaintiff had applied to the defendant for a fixed term loan facility for the purpose of constructing a 300,000 metric ton capacity per year 'biodiesel plant' in Batam Island, Indonesia ('the project'). Vide its letter of offer dated 8 January 2007 ('the LO'), the defendant approved the term loan under buyer credit facility amounting to USD42.0m in favour of the plaintiff with the indicative terms and conditions contained therein. The plaintiff accepted the terms and conditions stipulated in the LO. The plaintiff subsequently brought this claim against the defendant alleging wrongful termination or revocation of the LO. The plaintiff contended that it had accepted the defendant's offer and had performed the terms and conditions precedent set out in the said LO and that therefore there existed a legally binding relationship between the plaintiff and the defendant. According to the plaintiff, the defendant's act of revoking the LO was wrongful and had caused the plaintiff to suffer losses. The defendant claimed that it had validly revoked the LO as the plaintiff had committed fundamental breach of the terms of the LO. According to the defendant, the plaintiff had unilaterally changed the Project location from Batam Island to Dumai Port. Beside that the plaintiff too had unilaterally decided to increase the capacity of the project from the 300,000mt per annum agreed earlier to 400,000mt per annum. The defendant claimed that by doing so the plaintiff had deviated from the indicative terms and conditions agreed upon earlier vide the LO. Further the defendant contended that the LO was vitiated by the plaintiff's misrepresentations and hence it was voidable at the option of the defendant. The defendant also pleaded that the plaintiff had breached its duty in giving and/or representing the false statements to the defendant at the material time which had induced the defendant to issue the LO the consequence of which had resulted in the defendant suffering damages. Therefore the defendant prayed that the LO be declared terminated and sought damages for misrepresentation to be assessed. The defendant claimed that it was justified in invoking cl 29 of the LO which gave the discretion to the defendant to revoke the LO if the granting of the facility was prejudicial to the defendant's interest. Further under this clause the defendant shall not in any way be liable for damages or loss howsoever suffered by the plaintiff as a result of revocation of the LO. The plaintiff alleged that cl 29 prohibited the plaintiff from pursuing its remedies allowed by the law such as damages for breach of contract in the event the LO was rejected. Therefore, the plaintiff claimed that cl 29 was void which rendered the revocation of the LO unlawful. Clause 29 was said to contain uncertain terms and therefore to be bad in law under s 30 of the Contracts Act 1950 ('the Act').[31]

It was held, dismissing the plaintiff's claim with costs and allowing the prayers sought by the defendant:

• The plaintiff had failed to establish its claim that it had performed the terms and conditions of the LO with credible evidence (see para 73).

• The approval of the facility was based on the financial dtudy prepared by the plaintiff with the view of having the project located in Batam Island. That being the case the plaintiff ought not to unilaterally change the project site as it pleased. The plaintiff's departure from the clear terms of the LO tantamounted to a refusal on the part of the plaintiff to honour and fulfil the terms and conditions stated in the LO. Hence the plaintiff had refused to perform its part of the bargain and/or had disabled itself from performing the promise in entirety as stated in the LO. The defendant was thus entitled to rely on s 40 of the Act. Hence the defendant was justified in revoking the LO

• The plaintiff had agreed to cl 29, in that, giving the discretion to the defendant to revoke the LO if in the subsequent opinion, the defendant found that the granting of the facility is prejudicial to the defendant's interest. In such circumstances the defendant was not liable for any damages or loss howsoever suffered by the plaintiff as a consequence of the defendant revoking the LO. Having agreed to this term it was not opened to the plaintiff to dispute the same subsequently. Parties to an agreement can by agreement contract out of the Act unless the terms are clearly inconsistent with the Act

• The terms of cl 29 were clear, unequivocal and did not contain any ambiguity that the court must interpret in order to give effect to the clear words of cl 29. Hence, the plaintiff's challenge with regard to cl 29 of the LO was without any basis. The defendant had rightfully exercised its discretion under cl 29 of the LO citing the reason 'due to unfavourable biodiesel market outlook'

• The credit risk analysis report prepared by DW2 showed that the average CPO price was higher than the assumed biodiesel selling price. In the course of preparing the report, DW2 had relied on the public record of MPOB where the data extracted form part of and/or was based on data, which formed part of the records of MPOB, which is a governmental body, entrusted with the task to promote and develop the palm oil industry. MPOB is also responsible to furnish its records and/or information to the public at large as the government's initiative in promoting the industry. Hence, pursuant to s 57 of the Evidence Act 1950 the court was entitled to take judicial notice of the public records and accept it as evidence

• There were elements of misrepresentations involved in the dealings with the defendant and the plaintiff had caused the defendant to be induced to issue the LO to part-finance the project by these misrepresentations. The plaintiff had a duty as an applicant for the said financing to disclose truthful information with regards to all facts which were material to the application for the same to be considered by the defendant. The plaintiff had breached its duty of care to the defendant by making those misrepresentations

• Despite the fact that the defendant had only stated in the revocation/termination letter that the LO was revoked based on unfavourable market outlook for biodiesel, it did not mean that the defendant could not rely on other grounds that it had discovered later to justify its act in issuing the LO. There is no common rule that it is a condition precedent that a notice must be first given by the defendant correctly, specifying the grounds on which the power is being exercised. The defendant was entitled to justify the revocation/termination if the object facts which justified the taking of the step existed at the material times even though at the time the steps were taken the defendant did not know of the facts.

REFRENCES :

1. Contracts Act 1950

2. S.5(1) of the Contracts Act 1950

3. S.4(2)(a) of the Contracts Act 1950

4. [1880] 5 CPD 344

5. (1872) 26 LT 78L Ch App 587; (1848) 1 HL Cas 381)

6. Alsagoff, Syed Ahmed. (2003). Principles of the Law of Contract in Malaysia, Kuala Lumpur: Lexis Nexis.

7. 7Abdullah, N. Irwani and Razali, S. Salwani. (2008). Commercial Law in Malaysia, Kuala Lumpur: Prentice Hall.

8. 8Beale, H and Dugdate, T. (1975). “Contracts between businessmen: planning and the use of the contractual remedies,” British Journal of Law and Society 45.

9. Collins, H. (2003). The Law of Contract, London: LexisNexis, Butterworths.

10. Gardner, S. (1992). “Trashing with Trollope: a deconstruction of the postal rules,” Oxford Journal of Legal Studies, 197.

11. Murray, A. (2000). “Entering into contracts electronically: the real w.w.w.” In Edwards, L. and Waelde, (eds), Law and the Internet: A Framework for Electronic Commerce, Oxford: Hart Publishing, 17-36.

12. O’Sullivan, Janet and Hilliard, Jonathan