KSLU Solved Question Papers
Contract I
Previous Year Question Paper with Solution
B.A. LL.B. (Five Years) · Sem 4
2012 Dec Examination
munotes.in
Mumbai
B.A. LL.B. (Five Years) Sem 4 Contract I 2012 Dec Question Paper with Solutions
First published on munotes.in on 21 October 2026.
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The question paper reproduced here is the paper as set by Karnataka State Law University at the 2012 Dec examination.
Contents
The questions below are the paper as Karnataka State Law University set it at the 2012 Dec examination, in the order it was set.
MarksPage
MarksPage
The Paper as Set
The questions in this volume are the questions asked at the 2012 Dec examination, reproduced as Karnataka State Law University set them, in the order it set them. Long reading passages are shortened to their first and last lines and our summary; the original paper prints them in full. Only the answers are ours. See the original question paper.
Duration 3 hours · Total marks 100 · 20 questions answered
Instructions printed on the paper
- N.B. (1) Answer all 5 questions. (2) One essay type and one short note question or problem from each Unit have to be attempted, which is referred as Part (a) and Part (b) in all the Units. (3) Figures to the right indicate marks. (4) Answers should be written either in English or Kannada completely.
How to use this volume
Solve the paper first, under exam conditions and against the clock. Then read the answers here and mark your own. Reading a solution before attempting the question feels productive and teaches very little, because recognising an answer is not the same as being able to write one.
Q1
Unit I
(a)Explain the rules relating to a valid acceptance.[15]
Answer
For full marks, cover: the definition in section 2(b) and its effect; the rules (essentials) of a valid acceptance, each with an illustration and a leading case: (1) by the offeree, (2) with knowledge of the offer (Lalman Shukla), (3) absolute and unqualified (section 7(1), Hyde v. Wrench), (4) in the prescribed or a usual manner (section 7(2)), (5) communicated, so silence is not acceptance (Felthouse v. Bindley), (6) by conduct where the offer allows (section 8, Carlill), (7) while the offer is open (sections 5 and 6), (8) by the offeree or his authorised agent; when communication is complete by post, telephone and electronic means (section 4, Kedia, section 13 of the IT Act); revocation of acceptance (section 5); a worked example; a table; a conclusion.
Meaning of acceptance
Section 2(b) of the Indian Contract Act 1872 provides: "When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted". It adds: "A proposal, when accepted, becomes a promise".
Acceptance is therefore the final assent to the terms of an offer. It is the moment at which the parties come together. Once a valid acceptance is made, the proposer is bound, and an agreement exists. If the other elements in section 10 are present, that agreement is a contract.
The two key words are "signifies" and "assent". The offeree must show his agreement in some outward way. And what he agrees to must be the proposal as made, not something different.
Rule 1: acceptance must be made by the person to whom the offer is made
A specific offer, made to one person, can be accepted only by that person. If A offers to sell his car to B, C cannot accept it, even if C is willing to pay more.
A general offer, made to the world, can be accepted by anyone who performs its conditions.
Rule 2: acceptance must be made with knowledge of the offer
A person cannot assent to an offer he does not know about. Doing the act an offer asks for, without knowing of the offer, is not acceptance.
Lalman Shukla v. Gauri Dutt, decided by the Allahabad High Court in 1913. Gauri Dutt's nephew went missing. He sent his clerk, Lalman Shukla, to search for the boy. Later he announced a reward for whoever found him. Lalman found the boy without knowing of the reward. The court held that he could not claim it, because he did not know of the offer when he acted.
Illustration. A advertises a reward for finding his lost dog. B finds the dog, returns it, and only then reads the advertisement. On the rule in Lalman Shukla, B has not accepted A's offer.
Rule 3: acceptance must be absolute and unqualified
Section 7(1) says the acceptance must "be absolute and unqualified". The acceptor must agree to all the terms of the offer, exactly as made. A conditional acceptance, or one that changes a term, is not an acceptance. It is a counter offer, which is a new proposal and a rejection of the old one.
Hyde v. Wrench, (1840) 3 Beav 334. Wrench offered his farm for 1,000 pounds. Hyde replied offering 950 pounds. Wrench refused. Hyde then said he would pay 1,000 pounds. The court held that there was no contract. Hyde's counter offer had rejected the original offer, which therefore could not be revived.
Illustration. A offers to sell 100 bags of rice for Rs 2 lakh. B replies, "I accept, if you deliver free to my godown." B has made a counter offer. Unless A agrees, there is no contract.
A mere inquiry is different. If B asks, "Will you deliver free to my godown?", without rejecting the offer, the offer remains open.
Rule 4: acceptance must be in the prescribed or a usual manner
Section 7(2) says the acceptance must "be expressed in some usual and reasonable manner, unless the proposal prescribes the manner in which it is to be accepted".
If the proposal prescribes a manner and the acceptance does not follow it, the proposer has a choice. He may, within a reasonable time after the acceptance reaches him, insist that it be made in the prescribed manner. If he does not do so, "he accepts the acceptance".
Illustration. A writes, "Reply by registered post". B replies by ordinary post. A may insist on registered post within a reasonable time. If he stays silent, the acceptance is good.
Rule 5: acceptance must be communicated
A decision to accept, kept in one's own mind, is not acceptance. It must be made known to the proposer. Under section 3, acceptance is communicated by any act or omission by which the acceptor intends to communicate it. An act or omission that has the effect of communicating it is also enough.
It follows that silence is not acceptance. The proposer cannot say, "If I do not hear from you, I will treat my offer as accepted".
Felthouse v. Bindley, (1862) 11 CB (NS) 869. An uncle offered to buy his nephew's horse, writing that if he heard no more he would consider the horse his. The nephew did not reply, though he decided to sell. An auctioneer sold the horse by mistake. The court held that there was no contract between uncle and nephew. The nephew's silence was not acceptance, and his private decision had never been communicated.
Rule 6: acceptance may be made by conduct
Section 8 provides that "Performance of the conditions of a proposal, or the acceptance of any consideration for a reciprocal promise which may be offered with a proposal, is an acceptance of the proposal". So an offer may be accepted by doing what it asks.
Carlill v. Carbolic Smoke Ball Co., [1893] 1 QB 256. The company advertised that it would pay 100 pounds to anyone who caught influenza after using its smoke ball as directed. Mrs Carlill used it and caught influenza. The Court of Appeal held that she had accepted the offer by using the smoke ball. The offer itself showed that notice of acceptance was not required.
Illustration. A tells B, "If you paint my gate tomorrow, I will pay you Rs 500." B paints the gate. B has accepted by performing.
Rule 7: acceptance must be made while the offer is open
An offer can be accepted only while it subsists. Under section 6 it ends by notice of revocation, or by lapse of the time fixed or of a reasonable time. It also ends by failure of a condition precedent, or by the proposer's death or insanity known to the acceptor. It also ends by rejection. An acceptance after the offer has ended is only a new offer.
Rule 8: acceptance must be made by the offeree or his authorised agent
Information that reaches the proposer from an unauthorised person is not acceptance by the offeree. The offeree, or someone he has authorised, must communicate it.
When communication of acceptance is complete
By post. Section 4 says the communication of an acceptance is complete as against the proposer "when it is put in a course of transmission to him, so as to be out of the power of the acceptor". As against the acceptor, it is complete "when it comes to the knowledge of the proposer".
Illustration (b) to section 4: B accepts A's proposal by a letter sent by post. The acceptance is complete as against A when the letter is posted. It is complete as against B when A receives the letter.
By telephone. Bhagwandas Goverdhandas Kedia v. M/s Girdharilal Parshottamdas and Co., AIR 1966 SC 543. An offer made from Ahmedabad was accepted by telephone from Khamgaon. The Supreme Court held that the contract was made at Ahmedabad, where the acceptance was heard. For instantaneous communication, acceptance is complete where and when it reaches the proposer.
By electronic means. Section 10A of the Information Technology Act 2000 provides that a contract is not unenforceable "solely on the ground that such electronic form or means was used". Section 13 of that Act fixes when an electronic record is dispatched and received. Unless otherwise agreed, it is received when it enters the addressee's designated computer resource.
Revocation of acceptance
Section 5 says: "An acceptance may be revoked at any time before the communication of the acceptance is complete as against the acceptor, but not afterwards". So B, who posted his acceptance, may revoke it by a telegram or a call that reaches A before the letter does.
A worked example
On Monday A posts an offer to sell his tractor to B for Rs 4 lakh, asking for a reply by post. B receives it on Tuesday.
- On Wednesday B posts a letter accepting. The acceptance is complete against A on Wednesday, when posted. A can no longer revoke.
- On Thursday B phones A and says he withdraws his acceptance. The letter has not yet reached A, so the acceptance is not complete against B. B's revocation is valid under section 5.
- If instead B had replied, "I accept at Rs 3.5 lakh", that is a counter offer, as in Hyde v. Wrench. No contract arises unless A accepts it.
The rules at a glance
| Rule | Provision | Authority or illustration |
|---|---|---|
| By the offeree | general principle | specific and general offers |
| With knowledge of the offer | general principle | Lalman Shukla |
| Absolute and unqualified | section 7(1) | Hyde v. Wrench |
| Prescribed or usual manner | section 7(2) | registered post example |
| Communicated, not silent | sections 3 and 4 | Felthouse v. Bindley |
| By conduct | section 8 | Carlill |
| While the offer is open | sections 5 and 6 | lapse and revocation |
| Complete by post, phone, email | section 4; IT Act section 13 | Kedia |
Conclusion. Acceptance under section 2(b) is the offeree's assent, which turns a proposal into a promise. To be valid, it must come from the offeree, with knowledge of the offer, as Lalman Shukla shows. It must be absolute and unqualified, as Hyde v. Wrench shows, and in the prescribed or a usual manner. It must be communicated, since silence is not acceptance (Felthouse v. Bindley), though conduct may be enough where the offer allows it (Carlill). It must be made while the offer is open. It is complete against the proposer when posted, and on the telephone where it is heard (Kedia). It may be revoked until it reaches the proposer.
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