Mohamed Dzaiddin FCJ:

This appeal is concerned with an action brought by the respondents, who were the plaintiffs in the Court below, to recover from the appellant, the defendant, a sum of RM500,000 being the balance of the purchase price for the sale of the respondents' businesses allegedly sold to the appellant. For convenience and brevity, we shall refer the appellant and the respondents as the defendant and plaintiffs respectively.

The plaintiffs' claim against the defendant is founded on a letter dated 25 September 1990 (AB1), written by the defendant to them, which contained terms and conditions of the sale of their businesses to the defendant. In consequence of AB1, the plaintiffs had received from the defendant cheques totalling RM500,000, and handed over their businesses to the defendant. Despite demand being made, the defendant had failed to pay the balance sum of RM500,000. The defendant denied that AB1 constituted a valid contract made between the plaintiffs and him. He contended that AB1 was merely a letter expressing an intention and desire of the parties that a formal agreement would be executed between the plaintiffs as vendors of one part, and Wonson Garm