Lenka, the manufacturer of new weight loosing product, placed an advertisement i

Question

Lenka, the manufacturer of new weight loosing product, placed an advertisement in the Times Magazine which reads as follows: "Annual subscription for Lenka weight loosing products delivered to your door only at RM300. Special subscribes by June 20^th and get free voucher worth KM J 00 for any Lenka Cosmetic products. Subscribe now by sending your payment address to Lenka products." Upon reading the advertisement, Diana places her order by filling the form and enclosing a cheque of RM300 by post for the subscription on June 18^th. However due to the delay in the post the letter was not delivered to Lenka Products until June 25^th. On June 17^th, Lenka advertised in the Times Magazine stating that the free voucher is no longer offered. Lenka began to supply Diana for the weight loosing products but refused to give the RM100 voucher for Lenka Cosmetic. Diana is no longer interested for the supply of weight controlling products without the free voucher of RM100. Lenka informed Diana that the letter u'as not received on time. With reference to the above, you are required to complete the following tasks: Explain the elements of a valid contract. Using case laws and the relevant provisions of the Contracts Act 1950 to support your views, discuss as to whether there exist a valid contract between Lenka and Diana. Lee. M.P., (2010), General Principles of Malaysian Law, 4^th Edition, Malaysia: Fajar Bakti Vohrah, B., Wu, M.A.,(2003), The Commercial Law of Malaysia. Malaysia, Pearson Education.

Explanation / Answer

Hey Dear Student!

Task 1: Following are the Main Elements of Valid Contract as per Contract Act 1950:-

A) Offer or Proposal:- It can be Oral or Written. It is a first action which starts the Contract between two parties. In this case advertisement in Magazine is offer made by Lenka.

B) Acceptance:- It is sent by other party to whom offer is made by first party. That Party can't give Conditional Acceptance. In this case Diana by placing a order making an acceptance to offer made by Lenka.

C) Consideration: It is simply something in return. In given case consideration of Lenka is RM300 and for Diana it is the Product sold by Lenka and Voucher of RM100.

D) Capacity to Contract: This is basically legal Capacity of a person entering into a contract. As per law following are not eligible for contract: 1. Minor
2. Person with Unsound Mind
3. Person disqualified by another Law.

E) Free Consent: When entering into agreement, the parties must be free consent to contract. The free consent as provided in Section 10(1) “All agreements are contracts if they are made by the free consent of parties competent to contract...” Under Section 14, consent must be free and not caused by:
Mistake. Undue Influence, Coercion, etc.

Task 2:- There is a valid contract between Lenka and Diana because all the elements of valid contract gets fulfilled in given case Lenka made offer by advertisement, Diana accepts by sending money and placing order, both are having valid capacity to enter into contract (Assumed), Consideration exists for both parties, and Consent given by Diana was also free. Further Lenka Can't deny to provide RM100 Voucher to Diana on that basis that they received order late because as per Contract Act 1950 acceptance of the contract gets completed on Lenka at a time when Diana posts the order and money not at a time of receiving the letter.

I hope you are satisfied with answer dear student. Pleasure Teaching You.

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