Question 1Identification of the problem:The problem determines:1. Whether it is a valid contract between Joanne and Andy.2. If Andy has to sell the car to Joanne.3. If Andy can revoke the contract between him and Joanne. Explanation of the law General rule, consideration of a contract need not be adequate. According to the doctrine of freedom of contract, parties are free to contract. Based on Illustration F of Section 26 of the Contracts Act 1950, A agrees to sell a horse worth $1000 for RM10. A's consent to the agreement is freely given. The agreement is a contract despite the insufficiency of the consideration. In the case Thomas v. Thomas [1842] QB 851, after the death of John Thomas, the executors of his estate made an agreement with P that P may occupy the house by paying £1 per annum. However, after P had lived in the house for some time, D refused to give up the house and claimed that there was no consideration for his promise. It was held that P paying £1 per annum is consideration and should not be adjusted. In the case of Chappel & Co Ltd v Nestlé Co Ltd [1960] AC 87, to promote sales of their chocolate bar, Nestlé offered a record price of one shilling and sixpence plus three wrappers of sixpence chocolate bars. Chappell & Co brought proceedings for copyright infringement and Nestlé offered to pay a statutory royalty based on one shilling and sixpence. They did not include the value of the wrappers. The wrappers were deemed to be part of the consideration because a shilling and sixpence alone was not enough to get a record. Therefore, Nestlé had to pay a royalty based on three shillings. As a general rule, communication of a proposal is complete when it comes to the attention of the person to whom it is addressed...... middle of paper.... ..and when Andy makes it and comes to the attention of Joanne. Based on Section 5 of the Contracts Act 1950 and the case of Byrne v Tienhoven, Andy cannot revoke his proposal to Joanne because Joanne has already telephoned him and accepted his proposal before his revocation. So, Andy has to sell the car to Joanne. As regards postal regulations, with the same forms of communication it is only possible to carry out acceptance. Andy uses the letter to propose to Joanne, but Joanne telephoned Andy to accept. In the case of Entores Ltd v Miles Far East Corporation, it is held that the postal legislation does not apply to the instantaneous mode of communication. Therefore, Joanne's acceptance cannot constitute a binding contract between her and Andy. Andy can revoke his proposal at any time.ConclusionThere is a contract between Joanne and Andy.Andy is not obliged to sell his car to JoanneAndy can revoke his proposal.