Q.
Whether the automated response Kodak sent to the customers for their orders and saying that $100 would be taken from their credit cards as monetary consideration, was indeed an acceptance to a contract?
A.
[If the $100 was indeed deducted from the customers' credit cards and remitted to Kodak's Account, it should have constituted an acceptance to a contract.]
Opinions suggest that the confirmation can be equated to an acceptance and it would be very surprising if the court were to say no contract thereby resulted.
If these opinions proved correct, the consumers in the Kodak case can sue the company for breach of contract. As such, the consumers' course of action remains to be seen in the Kodak and Argos cases.
If similar facts of Argos and Kodak were to arise in Malaysia, what would be the outcome?
Malaysia is more inclined to follow the English common law principles because there is no provision in the Contract Act, 1950 and the Electronic Commerce Act, 2006 on invitation to treat.
Furthermore, section 3 and 5 of the Civil Law Act, 1956 provided for the application of English Law in Malaysia unless other provisions have been or shall be made by any written law. The legal principles on what is an invitation to treat and the examples of invitation to treat are based on English common law principles.
Assuming that a website advertisement is an invitation to treat, unless the owner agrees to each offer made by the intending buyer, there can be in law no enforceable contract because section 2(b) of the 1950 Act states: "a proposal is said to be accepted when the person to whom the proposal is made signifies his assent thereto".
Therefore, in the Argos case since the company did not signify an acceptance by virtue of section 2(b) of the Contract Act, 1950, the customers could not sue Argos for breach of contract because there was no contract.
In the Kodak case, however, Kodak has sent a confirmation order pursuant to the customers' offer. By referring to section 2(b) of the 1950 Act, the confirmation order can be taken as Kodak signifying their assent to the customers' orders, ie accepting the offer. Therefore, there would be a binding contract between the customers and Kodak if the law of contract is applied.
On the other hand, if a website advertisement is regarded as constituting a clear offer to the public at large capable of acceptance, then both Argos and Kodak may potentially expose themselves to an unwanted Carlill v Carbolic Smoke Ball Co unilateral contract-type liability because (by virtue of section 2(b) of the 1950 Act) a contract is concluded when the customers perform certain key functions inferring acceptance.
Moreover, if the website advertisement is considered to be an offer, the person who makes the offer is prima facie bound by its term regardless of whether they contain a mistake, for example, mistake as to the price in the Argos and Kodak situations.
Further reading on the issue of whether website display is an invitation to treat or an offer is here in part 3.
Ref:
Nuraisyah Chua Abdullah. 2004. Question & Answers on Malaysian Courts, Statutes, Cases & Contract, Tort and Criminal Law. 2013 Edition. Chapter 6. Page 183. International Law Book Services.
Section 2(b), Contract Act, 1950. Available at,
http://www.agc.gov.my/Akta/Vol.%203/Act%20136.pdf
Electronic Commerce Act, 2006. Available at,
http://www.agc.gov.my/Akta/Vol.%2014/Act%20658.pdf
[Own account]