Roslan who is a student in a local University approached Jamal, his classmate, showing interest in wanting to buy Jamal’s car. Jamal offered to sell the car to Roslan at the price of RM 5000. Roslan informed Jamal that he will take the car at RM 4500. Jamal just ignored Roslan and entered into a negotiation with Sally. After two days Roslan informed Jamal that he is accepting the offer to buy the car at the original price.

QUESTION

With reference to law of contract, advices the parties who seek your advice.

Roslan who is a student in a local University approached Jamal, his classmate, showing interest in wanting to buy Jamal’s car. Jamal offered to sell the car to Roslan at the price of RM 5000. Roslan informed Jamal that he will take the car at RM 4500. Jamal just ignored Roslan and entered into a negotiation with Sally. After two days Roslan informed Jamal that he is accepting the offer to buy the car at the original price.

Jamal informed Roslan that he had already sold the car to Sally at the price of RM 6000. Roslan insisted there is a valid contract between him and Jamal, since he had accepted the original offer.

Advice Roslan on his contractual rights.                                     

 (70 Marks)

• Advice Roslan on the possible remedies that might be available to him under law of contract if he were to succeed in his action.

         (30 Marks)

ANSWER

Analysis of Roslan’s Contractual Rights and Possible Remedies

Introduction

In the given scenario, Roslan, a student, expressed interest in purchasing Jamal’s car at a negotiated price. However, Jamal ignored Roslan’s counteroffer and sold the car to Sally. Later, Roslan accepted Jamal’s original offer, only to find out that the car had already been sold. This essay will advise Roslan on his contractual rights and explore possible remedies available to him under the law of contract, should he succeed in his action.

Contractual Rights

In contract law, an offer is a proposal made by one party to another, indicating a willingness to enter into a binding agreement. Acceptance occurs when the offeree unconditionally agrees to the terms of the offer (Elements of a Contract — Judicial Education Center, n.d.). Once acceptance is communicated to the offeror, a contract is formed, provided other essential elements of a contract are present (e.g., consideration, intention to create legal relations).

In Roslan’s case, he initially countered Jamal’s offer by proposing a lower purchase price for the car. However, Jamal ignored Roslan’s counteroffer and engaged in negotiations with Sally, ultimately selling the car to her. Despite this, Roslan later accepted Jamal’s original offer. The key question is whether a valid contract was formed between Roslan and Jamal when Roslan accepted the original offer after the negotiation with Sally had taken place.

It is important to note that acceptance must be communicated to the offeror for a contract to be valid. In this case, Jamal was not aware of Roslan’s acceptance before he sold the car to Sally. As a result, it can be argued that Roslan’s acceptance did not reach Jamal in a timely manner, rendering it ineffective in forming a contract. Therefore, Roslan’s contractual rights in this scenario may be limited.

Possible Remedies

If Roslan were to succeed in his action and establish the existence of a valid contract with Jamal, several remedies might be available to him under the law of contract. It is crucial to consider that remedies are designed to place the injured party in the position they would have been in had the breach not occurred.

Specific Performance

If the car is unique or of special value to Roslan, he could seek an order of specific performance. This remedy would require Jamal to fulfill his contractual obligation by transferring the car to Roslan. However, specific performance is a discretionary remedy and may not be granted if it is impractical or if monetary compensation would suffice.

Damages

In cases where specific performance is not feasible or appropriate, Roslan may seek damages as an alternative remedy. Damages aim to compensate the injured party for any losses suffered as a result of the breach (Goodall, n.d.). Roslan could claim the difference between the agreed purchase price (RM 5000) and the market value of a similar car at the time of the breach. Additionally, Roslan may be entitled to any incidental or consequential damages resulting from the breach, such as transportation costs or loss of opportunity.

Rescission and Restitution

Rescission involves canceling the contract and restoring the parties to their pre-contractual positions. If Roslan can demonstrate that Jamal’s actions amounted to a fundamental breach, he may seek to rescind the contract and claim restitution (Ellis, 2021). Restitution would require Jamal to return any benefits he gained from the contract, such as the payment received from Sally for the car.

Conclusion

While Roslan’s acceptance of Jamal’s original offer may seem valid from his perspective, the delayed communication of acceptance poses challenges in establishing a binding contract. To succeed in his action, Roslan would need to prove that his acceptance was effective and that a contract existed with Jamal. If successful, Roslan may seek remedies such as specific performance, damages, or rescission with restitution. However, the availability of these remedies will depend on the circumstances of the case and the discretion of the court.

References

Elements of a Contract — Judicial Education Center. (n.d.). http://jec.unm.edu/education/online-training/contract-law-tutorial/contract-fundamentals-part-2 

Ellis, L. (2021). rescission: contract law remedy (bars, misrepresentation, mistake and fraud). Hall Ellis Solicitors. https://hallellis.co.uk/rescission-contract-law-meaning/ 

Goodall, F. (n.d.). Oxford University Press | Online Resource Centre | Multiple choice questions. http://global.oup.com/uk/orc/law/company/jonesibl4e/01student/mcqs/ch08/