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CMA Foundation · Fundamentals of Business Laws and Business Communication · Performance of Contracts

Kapoor Industries must deliver 500 units of a component to three joint promisees, X, Y and Z, at a stated place and time. Kapoor makes an otherwise valid offer of performance to X only, and X refuses it. Which statement is correct under the Indian Contract Act, 1872?

The offer has the same legal consequences as an offer to all the joint promisees. Section 38 expressly provides that an offer of performance made to one of several joint promisees is treated as made to all of them, so Kapoor need not approach Y and Z separately.

  1. AThe offer has no legal effect because Y and Z were not approached
  2. BThe offer has the same legal consequences as an offer to all of themCorrect
  3. CThe offer is valid only for one-third of the units
  4. DThe offer is valid only if X had written authority from Y and Z

Explanation

Section 38 states that an offer to one of several joint promisees has the same legal consequences as an offer to all of them. So Kapoor's valid offer to X counts as an offer to X, Y and Z. The distractors invent proportional or authority requirements not found in the section.

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