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

Kavita offers to sell her flat to Dinesh and states that the offer will remain open until 30 June. Dinesh sends no communication of acceptance by that date and writes his acceptance on 5 July. What is the effect of the lapse of time?

The offer stood revoked on 30 June. A proposal is revoked by the lapse of the time prescribed for acceptance when no acceptance has been communicated. Since Kavita prescribed a time, reasonable time does not apply, and Dinesh's later acceptance cannot form a contract.

  1. AThe offer stood revoked on lapse of the prescribed time, so there is no valid acceptanceCorrect
  2. BThe offer continues for a reasonable time beyond 30 June
  3. CThe offer lapses only if Kavita sends a notice of revocation
  4. DThe late acceptance is valid and binds Kavita

Explanation

Under Section 6, a proposal is revoked by the lapse of the time prescribed for its acceptance without communication of the acceptance. Kavita fixed 30 June, and no acceptance was communicated by then. Reasonable time applies only when no time is prescribed, so the second option is wrong. The July acceptance cannot create a contract.

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