KSLU Solved Question Papers
Contract I
Previous Year Question Paper with Solution
B.A. LL.B. (Five Years) · Sem 4
2017 Dec Examination
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B.A. LL.B. (Five Years) Sem 4 Contract I 2017 Dec Question Paper with Solutions
First published on munotes.in on 21 October 2026.
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Contents
The questions below are the paper as Karnataka State Law University set it at the 2017 Dec examination, in the order it was set.
MarksPage
The Paper as Set
The questions in this volume are the questions asked at the 2017 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 · 13 questions answered
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.
Q1Explain offer and acceptance. Can they be revoked ?[16]
Answer
For full marks, cover: offer (proposal) under section 2(a) and its essentials: an intention to be bound, definite terms, communication (section 4), made to a person or to the public (Carlill), distinguished from an invitation to offer (Harvey v. Facey); acceptance under section 2(b) and section 7: absolute and unqualified (Hyde v. Wrench), in a usual and reasonable or the prescribed manner, communicated and not inferred from silence (Felthouse v. Bindley); when communication is complete (section 4 and its illustrations); revocation: the windows in section 5 and its illustration; the four modes of revoking a proposal in section 6 (notice, lapse of time, failure of a condition precedent, death or insanity known to the acceptor), with Byrne v. Van Tienhoven, Dickinson v. Dodds and Ramsgate Victoria Hotel v. Montefiore; revocation of acceptance; a timeline table; a conclusion.
Introduction
Every contract begins with an agreement, and every agreement begins with an offer and its acceptance. The Indian Contract Act 1872 calls an offer a proposal. Section 2(e) defines an agreement as "every promise and every set of promises, forming the consideration for each other". A promise comes only from an accepted proposal. So the law of offer and acceptance decides whether any contract exists at all. It also decides how long each party may still change his mind.
Offer
Section 2(a) says: "When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal". The person making it is the proposer or offeror. The person to whom it is made is the offeree.
Essentials of a valid offer.
- An intention to be bound. The proposer must be ready to be bound as soon as the other says yes. That is what "with a view to obtaining the assent" means.
- Definite terms. The terms must be certain enough to form a contract on acceptance.
- Communication. Section 4 says the communication of a proposal "is complete when it comes to the knowledge of the person to whom it is made". An offer no one knows of cannot be accepted.
- To a person or to the public. An offer may be made to one person, a group, or the world at large.
Carlill v. Carbolic Smoke Ball Co., [1893] 1 QB 256. A company advertised that it would pay 100 pounds to anyone who caught influenza after using its smoke ball as directed. Mrs Carlill did so and caught influenza. The Court of Appeal held that the advertisement was an offer to the whole world. It was accepted by anyone who performed its conditions, without notice. This is the leading case on a general offer.
An offer is not an invitation to offer. Some statements only invite others to make offers. Goods on display, catalogues and price lists are examples.
Harvey v. Facey, [1893] AC 552. Harvey telegraphed to ask whether Facey would sell a property called Bumper Hall Pen and to state the lowest cash price. Facey replied with the lowest price only, 900 pounds. Harvey telegraphed that he agreed to buy at that price. The Privy Council held that there was no contract. Facey's reply answered a question about price and was not an offer to sell. Harvey's last telegram was itself an offer, never accepted.
Acceptance
Section 2(b) says: "When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise". Section 7 adds the rules.
- Absolute and unqualified. The acceptance must match the offer exactly. A reply that changes the terms is a counter offer, which is a new offer and a rejection of the old one.
Hyde v. Wrench, (1840) 3 Beav 334. Wrench offered his farm for 1,000 pounds. Hyde offered 950 pounds, which Wrench refused. Hyde then said he accepted the 1,000 pounds. The court held that there was no contract. The counter offer had rejected and destroyed the original offer, so it could not be accepted later.
- In a usual and reasonable manner, or the manner prescribed. If the offer prescribes a manner and the acceptance departs from it, the proposer may insist on the prescribed manner within a reasonable time. If he does not, he is taken to accept the acceptance (section 7(2)).
- Communicated, not presumed from silence. The offeree must signify his assent. The proposer cannot make silence count as acceptance.
Felthouse v. Bindley, (1862) 11 CB (NS) 869. An uncle wrote offering to buy his nephew's horse and said that if he heard no more, he would consider the horse his. The nephew did not reply. The court held that there was no contract. A proposer cannot impose a sale by the offeree's silence.
- By the offeree, with knowledge of the offer. Only the person to whom the offer is made can accept it, and only if he knows of it.
When the communication of acceptance is complete. Section 4 fixes two moments. As against the proposer, it is complete "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) applies this to a posted letter. The acceptance binds the proposer when the letter is posted, and binds the acceptor when the proposer receives it.
Can an offer be revoked?
Yes, but only within a fixed window. Section 5 says: "A proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards". In the illustration to section 5, A may revoke "at any time before or at the moment when B posts his letter of acceptance, but not afterwards".
A revocation must itself be communicated. Section 4 makes it complete as against the person to whom it is made "when it comes to his knowledge".
Byrne and Co. v. Van Tienhoven and Co., (1880) 5 CPD 344. The defendants in Cardiff posted an offer to sell tinplates on 1 October. They posted a letter of revocation on 8 October, which reached the plaintiffs in New York on 20 October. The plaintiffs had accepted by telegram on 11 October. The court held that a contract was made on 11 October. A revocation takes effect only when it reaches the offeree. Posting it is not enough.
The modes of revocation in section 6. A proposal is revoked:
- "by the communication of notice of revocation by the proposer to the other party";
- by the lapse of the time fixed for acceptance or, if none is fixed, "by the lapse of a reasonable time";
- "by the failure of the acceptor to fulfil a condition precedent to acceptance";
- "by the death or insanity of the proposer, if the fact of his death or insanity comes to the knowledge of the acceptor before acceptance".
Ramsgate Victoria Hotel Co. v. Montefiore, (1866) LR 1 Ex 109. The defendant applied for shares in June 1864 and paid a deposit. The company allotted them only in November. The court held that an offer with no time fixed lapses after a reasonable time. The late allotment did not bind him.
A promise to keep an offer open. A proposer who promises to keep his offer open for a time may still revoke it before acceptance, unless the promise is supported by consideration.
Dickinson v. Dodds, (1876) 2 Ch D 463. Dodds offered to sell a house to Dickinson for 800 pounds and said the offer would stay open until Friday at 9 a.m. On Thursday, Dickinson learnt from a third person that Dodds had agreed to sell to someone else. He tried to accept on Friday morning. The Court of Appeal held that there was no contract. The promise to keep the offer open was not binding without consideration. Reliable notice of the sale from a third person was enough to show that the offer had gone.
Can an acceptance be revoked?
Yes, for a short time. 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". In the illustration, B may revoke his posted acceptance "at any time before or at the moment when the letter communicating it reaches A". So an acceptor who posts a letter may still revoke it by a faster means. A telegram or a call that reaches the proposer first will do. Once the letter reaches the proposer, the contract binds both.
The windows at a glance
| Step (offer and acceptance by post) | Proposer may revoke his offer? | Acceptor may revoke his acceptance? |
|---|---|---|
| Before the acceptance is posted | yes | nothing to revoke yet |
| At the moment the acceptance is posted | yes, up to that moment | yes |
| After posting, before the letter reaches the proposer | no: the proposer is bound | yes, if his revocation reaches first |
| After the letter reaches the proposer | no | no: the contract binds both |
Conclusion. An offer is a willingness to be bound, communicated with a view to the other's assent. An acceptance is an absolute and communicated assent to it. Silence is not acceptance, and a counter offer kills the original offer. Both can be revoked, but only within the windows in section 5. An offer can be revoked until the acceptance is put out of the acceptor's power, and an acceptance until it reaches the proposer. Section 6 adds lapse of time, failure of a condition and death or insanity known to the acceptor. Byrne v. Van Tienhoven shows that a revocation works only when the offeree learns of it. Dickinson v. Dodds shows that a promise to keep an offer open does not bind without consideration.
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