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CMA Foundation · Fundamentals of Business Laws and Business Communication · Essential Elements of a Contract, Offer and Acceptance

Under Section 38, if a promisor makes a valid offer of performance and the promisee refuses to accept it, what is the effect on the promisor?

The promisor is not responsible for non-performance and keeps his rights under the contract. Section 38 gives this protection when a valid offer of performance is refused by the promisee.

  1. AThe promisor loses all rights under the contract
  2. BThe promisor is not responsible for non-performance and does not lose his rights under the contractCorrect
  3. CThe contract becomes void at once
  4. DThe promisor must pay compensation to the promisee

Explanation

Section 38 states that where a valid offer of performance is not accepted, the promisor is not responsible for non-performance. He also does not lose his rights under the contract. The other options contradict this.

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