From the question, we have been told that there are similar materials facts to one decided by the Court of Appeal in year 2009. In year 2010, similar case occurs and Mr. Justice Peter as the high court judge. Whether the decision decided by Court of Appeal is bounded or not, first of all we must understand the hierarchy of court structure in Malaysia and the theory of doctrine of judicial precedent.

The doctrine of judicial precedent2 is concerned with the importance of case law in our system. It is really the lawyer’s term for legal experience. We all tend to repeat things we have done before, law is essentially no different. If one case has decided a point of law then it is logical that solution will be looked in the future. The term ‘precedent’ is an implication that what was done before should be done again—that a starting point in trying to solve a problem is to see what examples exist where this (or similar) problems have been tackled before.

The doctrine of precedent, or stare decisis2, lies at the heart of the English legal system. The doctrine refers to the fact that within the hierarchical structure of the English courts, a decision of a higher court will be binding on a lower court that it in that hierarchy. In general terms this means that when judges try cases they will check to see if a similar situation has come before a court previously. If the precedent was set by a court of equal or higher status to the court deciding the new case, then the judge in the present case should follow the rule of law established in the earlier case. Where the precedent is from a lower court in the hierarchy, the judge in the new case may not follow but will certainly consider it.

It is noted that the doctrine of precedent depends for its operation upon the underlying principle that the courts form a hierarchy with each court standing in a definite position in relation to every other court. The structure of this hierarchy must now be considered for the purposes if the doctrine of precedent. Decisions of the highest courts are binding on lower courts.

In the case of Donoghue v Stevenson5, Stevenson manufactured the ginger beer and sell to the café in Paisley. Donoghue is the shop assistant who meets his friend in the cafe. He bought the ginger beer to have share with his friends. When Donoghue drank, he found there is “remaining of decomposing snail” in the bottle. He shock, and got food poisoning. So, Donoghue was take action to sue the manufacturer, Stevenson. The chance for Donoghue sued for win was low. It is because there is no contract, so there could not be breach. However, The Court said that the Stevenson has to take reasonable care to avoid acts or omissions that would be reasonably likely to injure anybody who might be affected by them. There was an exit duty of cases independent is each cases.

In the year of 1978, the duty of case was applied in the cases of Anns v Merton London Borough Council6. The case was mentioned, Merton Borough Council approved the block of flats in Wimbeldon. After few years, the building was clearly showed the foundation was not sound structurally. The Council was negligence against the builders and the council. The Court was appeal the defendant as a public body owed a duty of care, and affirmed by the House of Lords.

From the two cases above, both of cases use duty of case to binding the decisions making. It showed that the Anns v Merton London Borough Council is bind of the case of Donoghue v Stevenson. There is the doctrine of judicial precedent.

The House of Lords2 decisions are binding on all other courts in the legal system, except the House of Lords itself. The House of Lords used to be bound by its own previous decisions until it changed this practice in 1966. The rationale for the old practice was that decisions of the highest court in the land should be final so that there would be certainty in the law and finality in litigation. However, the current practice enables the House of Lords to adapt English law to meet changing social conditions and to pay attention to the decisions of superior courts in the Commonwealth.

The possibility of the House of Lords changing its previous decisions is recognition that law, whether expressed in statutes or cases, is a living and changing institution which must adapt to the circumstances to which it applies if it is to retain practical relevance.

  1. Federal Court
  2. Court of Appeal
  3. High Court
  4. (Malaysia)
  5. High Court
  6. (Sabah & Sarawak)
  7. Syariah Court
  8. Syariah Court
  9. Magistrate Court
  10. Penghulu’s Court
  11. Juvenile Court
  12. Native Court
  13. Sessions Court
  14. Magistrates Court
  15. Juvenile Court
  16. Sessions Court

The court system may be illustrated as follows:

  1. Superior Court
  2. Coordinate Courts

The hierarchy of courts of Malaysia4 starts with the Magistrates Court as the first level followed by the High Court, Court of Appeal and the Federal Court of Malaysia, which is the highest level. The High Court, Court of Appeal and the Federal Court are superior courts, while the Magistrates Court and the Sessions Court are subordinate courts. There are also various other courts outside of the hierarchy. There are the Penghulu’s Courts, the Syariah Courts and the Native Courts. A court, which is paralleled in jurisdiction with the Magistrates’ Court, is the Juvenile Court.

Below the hierarchy, the Divisional Court is bound by decisions of the House of Lords and Court of Appeal in both civil and criminal cases. It is also normally bound by its own previous decisions but subject to the same exceptions laid down for the Court of Appeal, civil division, in Young v Bristol Aero plane Co Ltd. This would mean for example that if its previous decisions conflict, a Court may choose which to follow and which to reject. There are three components necessary for the system to be practicable:

Sufficient and trustworthy reports from previous decision.

Rules for recognizing legal principles followed in earlier cases.

Rules for differentiate those precedents that are binding from those that are merely persuasive.

When there is a situation where there is no precedent to follow, judge have to set a new precedent, merely making new law according to justice, equity and good conscience. In this case, judge is making a new law and we call it original precedent. For those judge merely applying an existing law, we call it declaratory precedent. Example, higher court is original precedent and lower court is declaratory precedent.

When there is a situation where there is no precedent to follow, judge have to set a new precedent, merely making new law according to justice, equity and good conscience. In this case, judge is making a new law and we call it original precedent. For those judge merely applying an existing law, we call it declaratory precedent. Example, higher court is original precedent and lower court is declaratory precedent.

We now need to add one further ingredient. It is this, an important and distinctive element of English law is that the reasoning and decisions found in preceding cases are not simply considered with respect or as a good guide, but can be binding on later courts. This is known as the principle of stare rationibus decidendis; usually referred to as stare decisis. It translates simply as ‘Let the decision stand’. Stare rationibus decidendis is the more accurate statement because, as we shall see, it is the reasoning (rationibus) that is the vital binding element in judicial resident. However, nobody actually refers to it this way. What stare decisis means in practice is that when a court makes a decision in a case then any courts which are of equal or lower status to that court must follow that previous decision if the case before them is similar to that earlier case. So, once one court has decided a matter other inferior courts are bound to follow that decision. However, once a precedent is made it remains binding until it is overruled by a higher court in future case.

In this case, we understand the principle of doctrine of judicial precedent and we apply the theory into the question. Yes, Mr. Justice Peter is bound by the decision made from the Court of Appeal since him from the lower court (high court).

(b) What do you think are the strengths and weaknesses of case law as a source of law? Discuss.


A case law / common law system, which is based on tradition, judge made precedent and which the court assign a preeminent (greatest / must important) position to exist case law to guide dispute resolution. A judge is bound by decisions of courts of superior jurisdiction. In practice, this means that inferior courts are bound to apply the legal principles set down by superior court in earlier cases. This provides consistency and predictability in the law. There are some strengths and weaknesses of case law as a source of law3:

The first strength is certainty. This strengths shows that if a problem was solved previously, there is a certain result because court is bound to follow the decision made before. The existence of a precedent may prevent a judge making a mistake that he might have made if he had been left on his own without any guidance. It may also allow persons generally to order their affairs and come to settlements with a certain amount of confidence. The next strength is uniformity. Since the court is bound to follow the decisions made before, the decisions for all the cases with similar material facts would be treated equally. This can prevent the occurrence of injustice. The case-law method is sometimes said to be flexible. A judge is not so free where there is a binding precedent. Unless it can be distinguished he must follow it, even though he dislikes it or considers it bad law. His discretion is thereby limited and the alleged flexibility of case law becomes rigidity. Practical in nature is one of its strengths too. The decisions are made based on actual cases rather than in logic or assumption. Furthermore, its strengths included time and cost saving. As the decision is following the previous, the case can be settled quickly and the legal cost is lesser. The last strength of case law as a source of law is possibility of growth. The system allowed for new rules to be created and old rules being adjusted meeting new situations and requirements of society. The making of law in decided cases offers opportunities for growth and legal development, which could not be provided by Parliament. The courts can more quickly lay down new principles, or extend old principles, to meet novel circumstances. There has built up over the centuries a wealth of cases illustrative of a vast number of the principles of English law. The cases exemplify the law in the sort of detail that could not be achieved in a long code of the Continental type. However, therein lays another weakness of case law. Its very bulk and complexity make it increasingly difficult to find the law.

Everything have its pro and cons. There are some weaknesses of case law as a source of law. The first weakness is rigidity. Once a rule is set down, it is binding even though it is known to be wrong until it is being overruled by a higher court. The next weakness is bulky and complex. The advantage of certainty is lost where there are too many cases or they are too confusing. There are too many cases and laws until nobody can learn all of them. Difficulty in differentiate ratio also is a weakness of case law as a source of law. It is because only the ratio decidendi is binding in case, the obiter dictum is just persuasive. The ratio decidendi of a case is the principle of law on which a decision is based. When a judge delivers judgment in a case, he outlines the facts which he finds have been proved on the evidence. Then he applies the law to those facts and arrives at a decision, for which he gives the reason. Obiter dictum is when the judge may go on to speculate about what his decision would or might have been if the facts of the case had been different. They must be differentiated in order to make decisions. Besides that, unpredictability also as a weakness of case law as a source of law. If there are too much unreasonable features, it is difficult to tell which precedent would be used. Case law as a source of law can cause injustice. The overruling of an earlier case may cause injustice to those who have ordered their affairs in reliance on it. Lastly, its weakness is slowness of growth. The system depends on litigation and it is slow and expensive. Thus, case law cannot grow quick enough to meet society’s wants. The doctrine of stare decisis is a limiting factor in the development of judge-made law. Practical law is founded on experience but the scope for further experience is restricted if the first case is binding. It leads to distinguishing and hair splitting decisions which rules the law unnecessarily complex. For an example, the law on automatism and voluntary intoxication which has led to some diabetics having to use the defence of insanity to escape a conviction if their trance like state was caused by lack of insulin, whilst if their state was caused by failure to eat after taking insulin they can use the defence of automatism. The law on insanity is still based on the McLoughlin rules 1843. Furthermore, it may ensure impartiality of judge. The interests of justice also demand impartiality from the judge. This may be assured by the existence of a binding precedent, which he must follow unless it is distinguishable. If he tries to distinguish an indistinguishable case his attempt will be obvious.




4. copy from Business Law notes, Tar College.

5. Donoghue v. Stevenson [1932] All ER Rep 1; [1932] AC 562; House of Lords

6. Anns v Merton London Borough Council [1977] ABC.L.R. 05/12

Question 2

On the 29th October, 2010 Steven advertised in the New Focus Paper, “Yamaha Piano latest model, excellent condition, RM15,000, interested please call 016-123456″.

On the 1st November, 2010, Tanny after seeing the piano, offered RM10,000 to buy the piano. Steven said “I will not sell it below RM14,000 and I will not sell it to anyone else before 7th November 2010.”

Tanny went to Australia for a few days and came back to Malaysia on the 7th of November 2010. On the 8th of November 2010, Tanny decided to post a letter accepting to buy the piano for RM14,000. Steven received this letter on the 11th of November 2010.

Discuss the above issues and explain if Tanny’s letter of acceptance is valid.


Generally, this question is about the offer and acceptance happens between Tanny and Steven which Steven posted the advertisement on newspaper. We shall discuss the issues that contain in the question below.

On the 29th October 2010, Steven advertised in the NewFocus Paper, “Yamaha Piano latest model, excellent condition, RM15, 000, interested please call 016 1234567″. As we know, some advertisements are invitation to treat or offer, it is depends on case to case and intention of the parties.

For example, case of Carlill v Carbolic Smoke Ball Company1 is an advertisement of unilateral contracts that have been held to be offer. Offer2 is defined in S2(a) Contracts Acts, 1950 as “when one person signifies to another his willingness to do or abstain from doing anything with a view to obtaining the assent of that other to the act or abstinence he is said to make a proposal”. The Carbolic Smoke Ball Company put an advertisement show that they offered £100 to anyone who’s used the Smoke Balls that they produced still caught flu. Ms Carlil was followed the instruction given to eat the Smoke Balls, yet she still caught flu. So she sued for the £100 that company promised. The Court of Appeal said the performance of conditions was acceptance of offer and all elements of binding contract were provided. Therefore, it is an offer.

On the other hand, Partridge v Crittenden3 also advertised in newspaper but categorized as invitation to treat. Invitation to treat defined as inviting the public to make an offer. The defendant advertised, “Bramblefinch cocks and hens 25 shillings each”. He was charged because offerings a wild bird for sale is contrary to Protection of Birds Act 1954. The Court said he acquitted. It is because defendant could no reasonably intend to be bound to sell to those who might accept. Furthermore, it was not an offer in Contracts Act5, it was an invitation to treat.

Through the two cases above, the Steven’s advertisement is different to offer. Thus, this advertisement is categorized as invitation to treat, because there is no promise in this statement. Steven is inviting public to make an offer. Therefore, this advertisement was an invitation to treat, not an offer to sell and might sell to whom willing to accept the offer.

Next, on 1st November 2010, Steven invites Tanny to see the piano. This is an invitation to check the piano, not an accepting. After Tanny is seeing the piano, Tanny offered RM10, 000 to buy the piano. Now, Tanny is offeror, who makes an offer while Steven is the offeree, who will accept or reject the offer. This is bilateral offer between them because Tanny know the offeree that is Steven. Bilateral offer is an offer made to a particular person or group of people where the identity of the offeree can be know at the moment. Case of Boulton v Jones5 is supports the bilateral offer. In the case mentioned about, the defendant sent a written order for goods to a shop owned by Brocklehurst and which was addressed to him by name. Unknown to the defendant, Brocklehurst was transferred his business to the new owner, Boulton. Boulton fulfill the order and sent the goods to defendant without notifying him that he had taken over the business. The defendant still believed that the goods supplied are by Brocklehurst. When he received Boulton’s invoice, he is refused to pay, claiming that he had intended to deal with Brocklehurst. The Court said that the defendant was not reliable for the price. It is because there was no contract between defendant and Boulton. Moreover, the case is not one of the principal and agent, it was a contract made with B, who had transactions with the defendant and owed him money and upon which A seeks to sue. As a result, Steven did not accept the offer, this means there is no contract incurred. In addition, Steven said, he would not sell it below RM14, 000. This statement clearly states that, Steven was made a counter offer which was reject the original price, RM10, 000. Counter offer operated as a rejection of the original offer. It can be supported by the case of Hyde v Wrench6. In the case of Hyde v Wrench, the defendant offered to sell the farm at £1000 to plaintiff. But the plaintiff offered £950 which the defendant refused. After that, plaintiff wrote the letter to accept the original offer of defendant, but defendant does not response to the letter. The Court said there was no contract. It is because plaintiff rejected the original offer, therefore, no obligation between them. Due to Steven was counter offer, there is no acceptance between Tanny and Steven and the offer is terminated too.

In the same time, Steven made an offer with the statement; he promised that he would not sell the piano to anyone else before 7th November 2010 at the price RM14, 000. Now Steven is apply condition in term of time and date frame and it becomes a promise to Tanny. This offer has a specified end date then the offer will be considered terminated when this date has passed and also when a reasonable time period has passed for an offer with no specified date. Thus, it is prove that Steven was making an offer to Tanny.

Tanny went to Australia for a few days and came back to Malaysia on the 7th November 2010. There is no any transaction between them.

On the 8th of November 2010, Tanny decided to post a letter to accept to buy the piano for RM14, 000 when she came back to Malaysia. Tanny accept the offer by Steven, this is as an acceptance. Acceptance is defined in Section 2(b) Contracts Acts states that “when the offeree signifies his assent to the offer is said to be accepted. The offer when accepted becomes a promise”. Besides that, according to Postal Rule7, this is for “acceptance only and acceptance is to be completed when letter is correctly addressed and stamped is actually placed in post box”. It is supported by Adams v Lindsell8, in the case, defendant offer to sell wool to plaintiff and asked for reply in post. The offeror was delayed two days in the post and cause plaintiff’s acceptance letter was late in coming back. But the defendant was sold out the wool to others. The Court told defendant has to pay damages because the plaintiff’s acceptance was complete once the letter was posted.

Unfortunately, the offer made by Steven on 1st November 2010 was expired on 7th November 2010. The offer is not yet been verified. After that, the post letter on 8th November by Tanny to the Steven to buy the piano with RM14,000 becomes a new offer to Steven This is show that Tanny was making a new offer to Steven to buy the piano for RM 14,000. The offer is clear and definite.

Steven received Tanny’s offer letter on 11th November 2010. Steven has the right to accept or reject this offer because Tanny is making an offer after expired date. The letter of acceptance is valid or not is depends on the decision of Steven. If Steven accepts the offer letter by posting back the acceptance letter or by instantaneous method which are telephone or e-mail, the letter of acceptance is valid. If Steven keeps silent, so there is not a valid letter of acceptance because an offer must be communicated. We cannot accept something of which we have no knowledge. The case of note for this is that of Taylor v Laird9. In this case, the captain of a ship, employed for a trading and exploring voyage, refused to go any further and resigned his command. He subsequently helped to work the ship home and wanted to claim his wage for this work. It was held however that he could not do so as his offer to help bring the ship home was not communicated, therefore there had been no opportunity to accept or reject his offer. This is quite similar to the requirement that the offeree must have clear knowledge of the existence of the offer for it to be valid and enforceable.

As a conclusion, if Steven accepted the offer by Tanny, an agreement occurs. The acceptance is valid when the Tanny know about that the acceptance. Otherwise, Tanny’s letter of acceptance is not valid yet once Steven hasn’t accepted the Tanny’s offer.

  1. Carlil v Carbolic Smoke Ball Company, 1893 1 QB 256, Contracts Act 1950
  2. Definition Offer is stated in Section 2 (a) in Contracts Act 1950, copy from Business Law notes, Tar College.
  3. Partridge v Crittenden, 1968 2 All ER 421, HC QBD
  4. Contracts Act, 1950
  5. Case of Boulton v Jones, 1857 2H & N 564
  6. Hyde v Wrench, 1840 49 ER 132, Lord Langdale MR
  7. Postal Rule: ones of the Section 4 (2) Contracts Act 1950
  8. Adams v Lindsell, 1818 106 ER 250, Lord Ellenborough
  9. Taylor v Laird9 , 1856] 25 LJ Ex 329