Acceptance

Contracts Act 1950 (Malaysia) s 7(b) States that “acceptance” must be expressed in some usual or reasonable manner, unless the proposal prescribes a manner in which it is to be accepted.

In the case of Prism Leisure Sdn Bhd v Lumut Marine Resort Bhd [2002] 5 CLJ 391, the High Court stated as follows:

“An acceptance is an expression of assent to the terms of an offer and it is usually final and unqualified. Simply put, an agreement is made when one party accepts an offer made by the other party. But an acceptance must be unqualified”

Acceptance of an offer or proposal must be unequivocal and should constitute an unconditional assent by the promisee to the terms or the offer or proposal. A qualified acceptance introducing proposed new terms or rejecting some of the offered terms constitutes a rejection of the original offer or proposal and amounts to a counter offer or counter proposal. Only unconditional or unqualified acceptance by the promise will create a binding contract with the promisor. In contracts involving real property, a binding contractual relationship may be created on the exchange of signed contracts between the parties.

Most solicitors when negotiating with another solicitor on the terms and conditions of a sale and purchase agreement would usually insert the phrase “subject to contract” in their correspondence to each other. This means that any acceptance is qualified and is subject to a formal contract being drawn up by both parties.

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