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CA Foundation · Business Laws · The Indian Contract Act, 1872

Kiran says to Lata, 'I will sell you my old car for Rs 2,00,000. You may give me your answer by Friday.' On Wednesday, Kiran tells Lata that he is withdrawing the offer, and Lata, who had not yet replied, then says on Thursday, 'I accept.' What is the legal position?

No contract exists. An offer can be revoked any time before acceptance is complete, and Kiran communicated his withdrawal on Wednesday before Lata accepted. His promise to keep the offer open until Friday was not supported by consideration, so it did not stop him from revoking.

  1. AA valid contract exists because Kiran had fixed Friday as the time limit
  2. BNo contract exists because Kiran revoked the offer before Lata accepted itCorrect
  3. CA valid contract exists because Lata accepted before the deadline
  4. DNo contract exists because acceptance must always be in writing

Explanation

A proposal may be revoked at any time before the acceptance is complete as against the proposer. Kiran's communicated withdrawal on Wednesday came before Lata's acceptance, so the offer had ended. A promise to keep the offer open until Friday is not binding without consideration, so option A is wrong.

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