KSLU Solved Question Papers
Contract I
Previous Year Question Paper with Solution
B.A. LL.B. (Five Years) · Sem 4
2021 Mar (100 marks) Examination
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Mumbai
B.A. LL.B. (Five Years) Sem 4 Contract I 2021 Mar (100 marks) 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 2021 Mar (100 marks) examination, in the order it was set.
MarksPage
The Paper as Set
The questions in this volume are the questions asked at the 2021 Mar (100 marks) 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.
Q1Define Proposal. Explain the circumstances under which it lapses.[16]
Answer
For full marks, cover: the definition of proposal in section 2(a) and its elements in brief; what "lapse" means and why it matters; when a proposal can be revoked (section 5) and when revocation is complete (section 4); the four modes in section 6 (notice of revocation, lapse of time, failure of a condition precedent, death or insanity), each with its case (Byrne v. Van Tienhoven, Dickinson v. Dodds, Ramsgate v. Montefiore); the further modes the courts add (rejection and counter offer in Hyde v. Wrench, destruction of the subject matter, supervening illegality); a worked example; a table; a conclusion.
Definition of proposal
Section 2(a) of the Indian Contract Act 1872 provides: "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 the proposal is the proposer. A proposal is the first step towards a contract. Once accepted, it becomes a promise under section 2(b).
A proposal has four elements.
- A willingness to do or not to do something.
- The willingness is made known, or "signified", to another person.
- It is made to obtain that person's assent, so that a simple acceptance will bind the proposer.
- Its terms are certain, as section 29 requires.
What lapse means
A proposal does not stay open for ever. It creates a power in the other person to accept it and so make a contract. That power ends when the proposal lapses or is revoked. After that, a reply saying "I accept" makes no contract, because there is nothing left to accept.
The Act uses one word for both. Section 6 is headed "Revocation how made", and it lists four ways in which "a proposal is revoked". Some depend on the act of the proposer. Others happen by themselves. The courts have added a few more.
The time limit for revocation: sections 4 and 5
Section 5 provides: "A proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards."
Section 4 tells us when that is. 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". So, where acceptance is sent by post, the proposer may revoke only until the letter of acceptance is posted.
The illustration to section 5 says it in words: "A may revoke his proposal at any time before or at the moment when B posts his letter of acceptance, but not afterwards".
Section 4 also says a revocation is complete against the person to whom it is made only "when it comes to his knowledge". So a revocation must actually reach the offeree before he accepts.
Mode 1: notice of revocation by the proposer, section 6(1)
The proposer may withdraw his proposal by communicating notice of revocation to the other party, before acceptance is complete.
Byrne and Co. v. Van Tienhoven and Co., (1880) 5 CPD 344. The defendants posted an offer from Cardiff on 1 October to sell tinplates. On 8 October they posted a letter revoking it. The plaintiffs in New York received the offer and accepted by telegram on 11 October. The revocation reached them only on 20 October. The court held that a contract was made on 11 October. A revocation has effect only when it reaches the offeree, and posting it is not enough.
Can the offeree learn of the revocation from someone else? English law has said yes.
Dickinson v. Dodds, (1876) 2 Ch D 463. Dodds offered to sell a house to Dickinson and said the offer would be left open until Friday at 9 a.m. On Thursday, Dickinson learnt from a third person that Dodds had agreed to sell the house to someone else. He tried to accept on Friday morning. The Court of Appeal held that there was no contract. A promise to keep an offer open, made without consideration, does not bind. The offer could be withdrawn before acceptance, and Dickinson knew of the withdrawal before he accepted.
Under section 6(1), the safer course in India is notice "by the proposer". A proposer who wants to revoke should tell the offeree himself.
Mode 2: lapse of time, section 6(2)
A proposal is revoked "by the lapse of the time prescribed in such proposal for its acceptance, or, if no time is so prescribed, by the lapse of a reasonable time, without communication of the acceptance".
- Time fixed. If the proposal says "accept by 30 June", it ends on 30 June.
- No time fixed. It ends after a reasonable time. What is reasonable depends on the subject matter. An offer to sell perishable goods or shares, whose prices change quickly, lapses sooner than an offer to sell land.
Ramsgate Victoria Hotel Co. v. Montefiore, (1866) LR 1 Ex 109. The defendant applied for shares in June and paid a deposit. The company allotted the shares only in November. The court held that the offer had lapsed. Allotment had to be made within a reasonable time, and five months was too long. He was not bound to take the shares.
Mode 3: failure of a condition precedent, section 6(3)
A proposal is revoked "by the failure of the acceptor to fulfil a condition precedent to acceptance". A condition precedent is something the acceptor must do before he can accept.
For example, A offers to sell his car to B if B pays a deposit of Rs 10,000 within a week. B does not pay. The offer ends, and B cannot later accept it.
Mode 4: death or insanity of the proposer, section 6(4)
A proposal is revoked "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".
The words about knowledge matter. If the acceptor accepts without knowing that the proposer has died or become insane, the proposal is not revoked by this clause. This differs from English law, where death of the offeror is often treated as ending the offer at once.
Other ways a proposal lapses
The courts recognise further modes not listed in section 6.
1. Rejection and counter offer. A proposal ends when the offeree rejects it. A counter offer, which is a reply on different terms, is itself a rejection.
Hyde v. Wrench, (1840) 3 Beav 334. Wrench offered to sell his farm for 1,000 pounds. Hyde replied offering 950 pounds. Wrench refused. Hyde then wrote that he accepted the original price of 1,000 pounds. The court held that there was no contract. Hyde's counter offer had destroyed the original offer, so there was nothing left to accept.
Section 7(1) supports this. It requires an acceptance to "be absolute and unqualified". A qualified reply is a new proposal.
2. Death or insanity of the offeree. An offer is made to a particular person. If he dies before accepting, it cannot be accepted by his heirs.
3. Destruction of the subject matter. If the house offered for sale is burnt down before acceptance, the offer lapses. This follows the principle of section 56.
4. Supervening illegality. If, before acceptance, a law makes the proposed contract illegal, the proposal can no longer be accepted.
A worked example
On 1 March, A posts a letter offering to sell his scooter to B for Rs 40,000, open for ten days. B receives it on 3 March.
- On 5 March, A posts a revocation, which reaches B on 8 March. On 6 March, B posts his acceptance. The revocation came too late. B's acceptance was complete against A when it was posted on 6 March, under section 4. A contract exists.
- If B had replied on 4 March, "I will pay Rs 35,000", that is a counter offer. It ends A's offer, as in Hyde v. Wrench.
- If B does nothing until 20 March, the ten days have passed. The offer lapsed under section 6(2).
The modes at a glance
| Mode | Provision or case | Key condition |
|---|---|---|
| Notice of revocation | section 6(1); Byrne v. Van Tienhoven | must reach the offeree before acceptance is complete |
| Lapse of time | section 6(2); Ramsgate v. Montefiore | time fixed, or a reasonable time |
| Failure of condition precedent | section 6(3) | condition not fulfilled |
| Death or insanity of proposer | section 6(4) | known to the acceptor before acceptance |
| Mode | Provision or case | Key condition |
|---|---|---|
| Rejection or counter offer | section 7(1); Hyde v. Wrench | a qualified reply ends the offer |
| Destruction or illegality | principle of section 56 | before acceptance |
Conclusion. A proposal under section 2(a) is a willingness made known to another with a view to his assent. It does not last for ever. Under sections 4 and 5 it may be revoked until the acceptance is posted, and a revocation counts only when it reaches the offeree, as Byrne v. Van Tienhoven shows. Section 6 lists four modes of ending it. They are notice of revocation, lapse of time as in Ramsgate, failure of a condition precedent, and death or insanity known to the acceptor. The courts add rejection and counter offer, as in Hyde v. Wrench, and destruction of the subject matter or supervening illegality.
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