Essay About Breach Of Contract And Contract Act

Law 101 – House Advertisement Case – Danny and Elaine
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LAW 101 AssignmentThe question involves a seller and four potential buyers. The first situation indicates Elaine who came across Danny’s advertisement on his van on the newspaper and went to Danny’s house with a cheque of RM20000 but was rejected by Danny. She, then stated that she would sue Danny for breach of contract. The arising issue from this situation; was there a contract made between Elaine and Danny? The underlying key point to this is the difference between proposal and invitation to treat. Referring to S2 (b) Contract Act 1950 stated when the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted: a proposal, when accepted, becomes a promise. However, an invitation to treat is not an offer and the person responding to such invitation will only be able to enforce his offer if the other person accepts it. Advertisement by Danny is an invitation to treat according to (Majumder v Attorney 1967) and (Pattridge v Crittenden 1968) all advertisement, catalogues and brochures are an invitation to treat unless the advertiser commits himself. Therefore, there was no contract between Danny and Elaine. Thus, Elaine cannot sue Danny for a breach of contract unless Elaine could prove that the offer was in fact a proposal. In a situation where a proposal is made, Elaine satisfied the condition of the contract, when she came with RM20000 cheque to buy the van. Based on this, Danny, as a seller, should do his part which is to sell the van to Elaine. Part two of the question is about Fiza and Danny. In this situation, Fiza wrote to Danny enclosing a cheque for RM20000 and saying she should assume the van was hers unless she heard the contrary. The same arising issue applies to this situation; whether there is a contract made between the Fiza and Danny. Conclusively, there was no contract between Fiza and Danny because after few days later Danny decided to sell his van to another buyer which means there is contrary. Danny did not accept the offer from Fiza also shows there was no contract between them as there is no acceptance. Acceptance can be made by conduct, orally and in writing for this contract to happen. In this situation, Danny never said that he would sell his van to Fiza. This implies that Fiza could not do anything and she should get the enclosing cheque that she forwarded to Danny back. The third part revolves around Gary who inspected the van and willing to buy for RM18000. However, Danny said he would only willing to sell the van for RM20000 and he gave Gary three days to decide but after just a day later he sold his van to Harry who came with RM18000 cash. The issue now is whether there is a contract between Danny and Gary? Yes, there is as based on S10 (1) Contracts Act 1950 indicates all agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void. There are two situations involving Gary and Harry respectively. In the case of Gary, there was a bind agreement that Danny gave him three days to decide whether to buy the van for RM20000 or not but then he sold a day later which conclude to a breach of contract. Stated in S40 Contracts Act 1950, when a party to a contract has refused to perform, or disabled himself from performing, his promise in its entirely, the promise may put an end to the contract, unless he signified, by words or conduct, his acquiescence in its continuance. However, the offer may be revoked if the offeree makes a counter-offer. Also, other argument is Danny may revoke before acceptance because he is not obliged to keep the option open for three days as there was no consideration. S5(1) Contracts Act 1950 indicates a proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards. Here, Gary did not say that he would accept buying the van at RM20000 within the three days time Danny gave. Danny, with the uncertainty of a buyer, then sold his van to Harry. Therefore, Gary could not sue Danny for a breach of contract for selling his van to Harry unless he could prove that he already accepted the offer and inform Danny about it. Nevertheless, S6 (a) Contracts Act 1950 stated by a proposal is revoked by the communication of notice of revocation by the proposer to the other party. Danny did not inform to Gary that he would revoke the three days offer instead he sold his van to Harry without telling Gary and only inform him after he sold the van. This could mean a breach of contract which is a repudiatory breach. Repudiatory breach occurs where a party indicates, either by words or by conduct, that he does not intend to honor his contractual obligations, e.g. refusal to perform or failure to perform an entire obligation. If Gary could prove that Danny breached the contract, meaning he dishonoured the contract by informing that he sold the van after the action took place, then he could sue Danny. Finally, is about would it be different if, after Danny had sold his van to Harry but before he could inform Gary about it, Gary informed Danny that he is accepting the offer? My answer to advise Gary before this case is he could sue Danny for breach of contract if he could prove that Danny dishonored the contract and now the case is Gary accepted the offer before Danny could inform that he had sold his van to Harry is the same. Gary could sue Danny for breach of contract because he gave him three days to decide and Danny may revoke but only with communication which he must inform Gary first before he decide to sell the van to Harry as stated in S5 (1) Contracts Act 1950 of how revocation can be made. Gary could sue Danny for a breach of contract and but he could not claim for damages because there is no damage. He, however, could sue Danny for the same breach of contract and receive specific performance. He is entitled to receive specific performance as Danny can be proven dishonouring the contract. Specific performance may be granted by the court if when no standard exists to ascertain the actual damage caused by the nonperformance of the act agreed to be done.