Question 2 OR (b)

Counter offer and later acceptance of the original price

6 marks

Time to write: About 12 minutes
Topic: Contract: nature, kinds, offer and acceptance
Notes: Crux notes

Question

Question 2 OR (b) · 6 marks

Varun offered to sell a Farm to Kartik for Rs. 12,00,000 but Kartik gave the offer to buy it for Rs. 11,40,000. Subsequently Kartik offered to purchase the farm for Rs. 12,00,000. State with reason, is there any contract between Varun and Kartik?

Reworded from the university paper; the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.

Before you write

Read off the question and its marks

12 minfor 6 marks

Read from the question

StateShort and exact: no long explanation.

Write it in this order

Read; underline the asks; jot your points 1 min
1 Rule: acceptance must be absolute; counter offer rejects the offer 3 marks 5 min
2 Application to the facts 2 marks 4 min
3 Decision 1 mark 1 min
Check: every ask answered, key terms underlined 1 min

123

Short on time? Trim steps 1 and 2 evenly rather than skip one: each is capped at its own marks. End with step 3 in a line or two.

Try it first. About 12 minutes for 6 marks. Write it out, then open the solution.

Solution

Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.

Law. Acceptance, to turn a proposal into a promise, must be absolute and unqualified (s. 7, Indian Contract Act, 1872). When the offeree proposes to accept subject to a variation of the terms, he makes a counter offer; a counter offer amounts to a rejection of the original offer. Once the original offer is rejected it comes to an end, and the offeree cannot later accept it: in the ICAI example, where A offered his plot for ₹10 lakhs and B offered ₹8 lakhs, B's counter offer terminated A's offer, so if B later agrees to pay ₹10 lakhs, A may refuse.

Application. Varun offered the farm to Kartik for ₹12,00,000. Kartik's offer to buy for ₹11,40,000 was a counter offer, which rejected and ended Varun's offer. Kartik's later offer to buy for ₹12,00,000 is not an acceptance of Varun's original offer (it no longer exists); it is a fresh offer by Kartik, which Varun is free to accept or reject.

Decision. There is no contract between Varun and Kartik unless Varun accepts Kartik's fresh offer of ₹12,00,000.

Where the 6 marks sit

#	Component	Marks
1	Rule: acceptance must be absolute; counter offer rejects the offer	3
2	Application to the facts	2
3	Decision	1
	Total	6

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