To advice the relevant parties, we have to first prove that there is a contract between the parties.

          To advice the relevant parties, we have to first prove that there is a contract between the parties. A voluntary agreement which may bring legal obligations is define as a contract. An agreement is make up of an offer and an acceptance. The agreement would only be legally enforceable if it is supported by consideration, intention to create legal relationship, certainty, capacity and free consent.

 

   The first two parties to discuss in this case are Sau Hao and Ho Sang. On 8th December Sau Hao telephoned Ho Sang and told him that she is ever ready to depart her piano for a reasonable price of within the range of $6,000. She asked Ho Sang whether he is interested or not.  If yes, Ho Sang will have to communicate his intention to her in writing by Christmas.

 

   The first issue to discuss is whether there is an offer. Section 2(a) Contracts Act 1950 (Anon., n.d.) stated that an offer is made when the offeror express to other his willingness to do or to abstain from doing anything with a view to come by the assent of the offeree  to the act or abstinence. Professor Treitel provides a leading definition of offer which an offer is a certain  promise to be bound if the partiular terms proposed is accepted. The person making an offer is known as an offeror ; the person making an acceptance is called offeree.

 

   Besides, an offer has to be clear and precise. An offer is invalid if it is not clear. In Guthing v Lynn (1831) 2B & AD 232, an offer to pay more if the horse found to be lucky is not a valid offer. It can be understood as Sau Hou is making a clear offer since he signifies his willingness to sell the piano within the range of $6,000. However, it is also an arguable statement because the range of $6,000 is not an absolute number of amount. The statement of   “Are you interested?” can also be argue that Sau Hao is just asking a question.

 

 

 

   Assume that there is a clear offer. An offer also has to be conveyed to the offeree. Section 4(1) Contracts Act 1950, the communication of an offer  is complete when it come to the knowledge of the person to whom it is made.

 

   A person cannot accept an offer if he is unaware of the offer. In R v Clarke (1972) 1 All ER 219, it was held that a short periods of forgetful fell far short of amounting to a shortcoming of reason. In this case, the offer is communicated to the offeree since Sau Hao had make a call to Ho Sang for the offer. This is because a contract can be made by orally, by conduct, or in writing.

 

   On 15th December, Ho Sang tries to contact Sau Hao through phone but she has already left for Guang Chou for holiday. Ho Sang left a message with Sau Hou’s answering machine stated that he will be happy to buy her piano. Ho Sang asked “But don’t you think it is a little bit too expensive?” and  shows that he hope that Sau Hou would consider lowering the price as he can afford $5,000 by that time.

 

   The second element to discuss is whether there is an acceptance. An acceptance must be complete and unqualified which means an offer must be accepted completely without any modifications or variations. If there is a modification the offer, it is not an acceptance of offer but an counter-offer. A party who made a counter-offer cannot later accept the original proposal by the offeree as it was being rejected. In Hyde v Wrench (1840) 3 Beav 33, it was held that a counter offer is made this demolish the native offer so that it is no longer available for  the offeree to accept.

 

 

 

 

  However, counter-offer must be tell apart from a mere request for further information. In Stevenson Jaques & Co. v McLean (1880) 5 QBD 346, Lush J held the plaintiff`s telegram at 9.42am was not a refusal of the original offer. In this case, Ho Sang is making a mere request for further information as “But don’t you think it is a little bit too expensive?” is only asking a question. Besides, he did not modify the term as $5,000 is still within $6,000.

 

 

   In addition, the general rule of an acceptance is it must be conveyed to the offeror. In Entores Ltd v Miles Far East Corporation [1955] EWCA Civ 3, it was held that the acceptance must come to the actual knowledge of the offeror.

 

   An acceptance can be accepted by usual and reasonable manner of communication. In this case, the form of acceptance should be manner of acceptance prescribed by the offer. For example, the case of Holwell Securities Ltd v Hughes [1974] 1 WLR 155 sets a precedent for overriding the postal rule. Therefore, Ho Sang’s reply was not a valid acceptance as acceptance through answering machine is not in the form of writing which is the manner of acceptance prescribed by Sau Hou.

 

   On 20th December, Ho Sang sent a letter informing that he is willing to accept to purchase the piano.

 

  There are three exception to the general rule that the acceptance need not come to the actual knowledge of the offeror which are unilateral contract, postal rule and estoppel. Postal rule is the exception involved in this case. In Adams v Lindsell (1818) 1 B & Ald 681, it was held that acceptance is complete upon posting. In this case, it can be assume that the acceptance is made by Ho Sang by 20th December. Still, it can be argue that the letter of acceptance is not sent by posting.

 

  On 21st December, Sau Hou faxed a message to Ho Sang stated that if she did not hear from Ho Sang in two days, she will be intended to revoke her offer.” Ho Sang’s letter reached Sau Hou’s office at Hong Kong on 22nd December.

 

   The next issue to discuss will be revocation of offer. Assuming the postal acceptance is made on 20th December, the revocation of offer is invalid refer to the case Byrne & Co v Leon Van Tien Hoven & Co [1880] 5 CPD 344, it was held that the repeal of the offer must be conveyed by the offeree before it comes into consequence.

 

On the other hand, assuming there is no postal acceptance made by Ho Sang. The next issue to discuss is revocation of offer. In Section 5(1) Contracts Act 1950, a proposal can be repeal as long as it has not been accepted. An offer can be revoke by communication, lapse of time, failure to fulfil condition and death or mental disorder before acceptance. The type of revocation involve in this case are communication and lapse of time.

 

 In this case, Sau Hou was intended to revoke the offer by communication. Although Sau Hou promise to open the offer for Ho Sang until Christmas, he can still revoke the offer because there is no consideration provided by Ho Sang. Yet, he was just intended to revoke. Hence, there is no revocation of offer made by Sau Hou.

 

   On 23rd December, Sau Hou placed an advertisement in the newspaper offering her piano for sale for $8,000 and promise that she will give all her music books to the first successful buyer who brings in $8,000 to her.

 

 

   An offer must be differentiate from an invitation to treat. An invitation to treat is not an offer but just an invitation for others to make an offer. An invitation cannot be accepted but only a stage of negotiation. An invitation to treat included display of goods, advertisement, auction and inviting tender. In Partridge v Crittenden [1968] 1 WLR 1204, it was held that the advertisement is generally an invitation to treat and not an offer to sell.

 

   However, not all advertisement is an invitation to treat. An unilateral advertisement is consider as an offer. An unilateral offer is bond in return for an act. Anyone with the knowledge of the offer who fulfil the required act is considered as accepting the offer. In this case, we can presume that Sau Hou is making an unilateral advertisement. This is because there is a term to accept the offer which is to bring in the $8,000 to Sau Hou.

 

  On 24th December, Sau Hou faxed was read by Ho Sang and he immediately faxed a letter to Sau Hou confirming his acceptance of the offer. On the same day, Sau Hou came back to her office in Hong Kong and listened to the answering machine first. She was too busy to read any fax messages on that day.

 

  In this case, Ho Sang has made an acceptance. However, the acceptance is not communicated to the offeror. Section 4(2) Contracts Act 1950 stated that an acceptance must come to the knowledge of the offeror. Therefore, there is no valid acceptance. Besides, the reply by Ho Sang communicated to Sau Hou was answering through answering machine but not in writing form. Hence, there is no valid acceptance.

 

  On 25th December, Hoi Man Keong from Shanghai took the earliest flight to Hong Kong to deliver cheque to Sau Hao. Hoi Man Keong is the only person that wish to buy the piano. Sau Hao refused to sell it to Hoi Man Keong, merely giving her excuse that he could not understand the traditional Chinese writing in her music books anyway.

     Assuming Sau Hou had made an unilateral advertisement on 23rd December. Hoi Man Keong who was the first person who came for the piano should be the offeree. This is because he had fulfil the term which is to be the first person who bring in $8,000. The leading case of the unilateral advertisement is Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1. It was held that Mrs Carlill can redeem the repay as this is an unilateral contract which she had accepted by completing the conditions stated in the advertisement. Hence, the acceptance was made by Hoi Man Keong in this case.

 

     On 26th December, Sau Hou read Ho Sang’s fax message. She immediately call Ho Sang that the deal is off because she has just sold the piano to Ting Lik for $12,000.

 

    Assuming the revocation on 20th December was invalid, Ho Sang may want to take a legal action against Sau Hou for breach of contract. However, the revocation may be effective due to the lapse of time. An offer may be revoked by the lapsed of time stated in the contract or lapse of a reasonable time. One of the case example of the revocation through the lapse of reasonable time is Fraser v Everett (1889) 4 ky 512, the court held that the reasonable of time depends on the subject of matter.

   

     Manchester Diocesan Council for Education v Commercial and General Investments Ltd [1969] 3 All ER 1593 is the case law for revocation due to the lapsed of time stated in the contract, it was held that the way of acceptance suggested for a tender was not binding, it has to be clear it the offeror wish that the suggestion to be bind. In this case, the offer can be revoked after 25th December as the lapsed of time stated by Sau Hou in the proposal was before Christmas.

  

 

  From the explanation above, we can know that the involve parties will be Sau Hou, Ho Sang and Hoi Man Keong. There is no contract between Sau Hou and Ho Sang. Hence, there is no legal obligation by Sau Hou. However, there is a contract between Sau Hou and Hoi Man Keong.

 

  Other than that, the contract between Sau Hou and Hoi Man Keong has to be supported by some other element to be valid. It can be assume that there is certainty in the offer made by Sau Hou because the term to accept the offer and the promise given is clear. We can also assume that they had enter into the contract with free consent because they going into the contract voluntarily.

 

  Currie v Misa (1875) LR 10 Ex 153; (1875-76) LR 1 App Cas 554 stated that a valuable consideration in law may include either in some right, interest, profit, forbearance, detriment, loss or responsibility given, suffered or undertaken by the other. Professor Atiyah views consideration as sufficient reason for enforcing the promise. There are three type of consideration which is executory, executed and past consideration.

 

 

  In this case, Hoi Man Keong had given a executed consideration which is usually being use in an unilateral contract. Consideration is executed when Hoi Man Keong has performed an act for the promise given by Sau Hou. Therefore, Hoi Man Keong had accepted the unilateral contract made by Sau Hao.

 

   Rose & Frank Co v JR Crompton & Bros Ltd [1924] UKHL 2 stated that parties to a contract must intended to create a relationship and alert that the breach of contract should have led to the legal consequences. It had been said that, the parties going into a contract must have the same intention communicated either expressly or impliedly to enter into a legal obligations.

 

  There are two presumptios to further  determining whether there is an common intention between the parties which are social and domestic agreement or commercial and business agreement. In this case, Sau Hou is obviously making a commercial and business agreement. Therefore, there is an common intention between them.

 

  Capacity to enter a contract means that only persons of sound mind and of age of majority are competent to contact. In this case, Sau Hou who is capable to work in an office can be presume as a working adult with healthy mental. Besides, Hoi Man Keong who is able to go overseas and deliver cheque can also be presume as a working adult with healthy mental.

 

  As a conclusion, the contract made by Sau Hou and Hoi Man Keong is legally enforceable. Hence, Sau Hou will be guilty of a breach of contract if Hoi Man Keong take legal action against him.                


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