Question

PRINCIPLE: 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.
FACT: Ramanuj telegrammed to the Shyamsunder, writing: “will you sell me your Rolls Royce CAR? Telegram the lowest cash price.” Shyamsunder replied by telegram: ‘Lowest price for CAR is Rs. 20 lacs.’ Ramanuj immediately sends his consent through telegram stating: ‘I agree to buy the CAR for Rs. 20 lacs asked by you.’ Now Shyamsunder refused to sell the CAR.

• A. : He cannot refuse to sell the CAR because the contract has already been made.
• B. : He can refuse to sell the CAR because it was only invitation to offer and not the real offer.
• C. : It was not a valid offer because willingness to enter into a contract was absent.
• D. : None of the above.

Hint:

A quote of price in response to a query is not an offer — it is an invitation to offer.

Answer 1

The Correct Option is B

According to the principle of contract law, a genuine proposal or offer is one that is made with clear willingness to contract.
In this case:
Ramanuj asked for the lowest price — this is not an offer, but an invitation to offer.
Shyamsunder quoted a price — this also is not a concrete offer, but a reply to the query.
There was no clear proposal from either side — just a price disclosure. Hence, Shyamsunder is not bound by contract, as no valid offer was made or accepted. \fbox{Final Answer: (B): He can refuse to sell the CAR because it was only invitation to offer and not the real offer.}