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

Under the Indian Contract Act, 1872, where a promisor has made a valid offer of performance to the promisee and the promisee does not accept it, what is the legal position of the promisor?

A promisor whose valid offer of performance is refused by the promisee is not responsible for non-performance and does not lose his rights under the contract. Section 38 protects him because he did what the law required, namely made a proper tender.

  1. AHe is not responsible for non-performance and does not lose his rights under the contractCorrect
  2. BHe is responsible for non-performance but keeps his rights under the contract
  3. CHe is not responsible for non-performance but loses his rights under the contract
  4. DHe must repeat the offer every day until it is accepted, otherwise the contract is void

Explanation

Section 38 provides that where a valid offer of performance is not accepted, the promisor is not responsible for non-performance, nor does he lose his rights under the contract. The option saying he loses his rights contradicts this. No duty to keep repeating the offer is stated.

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