Question:

Principle: When one person signifies to another his willingness to do or abstain from doing anything, with a view to obtaining the assent of that person to such an act or abstinence, he is said to have made a proposal.
Fact: "Ramanuj telegraphed to Shyam Sunder, writing: \emph{Will you sell me your Rolls Royce Car? Telegram the lowest cash price.}" Shyam Sunder replied by telegram: \emph{"Lowest price for Car is Rs. 20 lakh."} Ramanuj immediately sent his consent through telegram stating: \emph{"Agree to buy the Car for Rs. 20 lakh asked by you."} Shyam Sunder refused to sell the car.

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Price quotations, catalogues, or replies giving price are generally invitations to offer—not offers themselves—so they don’t bind the party until acceptance of an actual offer.
Updated On: Aug 11, 2025
  • He cannot refuse to sell the Car because the contract has already been made.
  • He can refuse to sell the Car because it was only invitation to offer and not the real offer
  • It was not a valid offer because willingness to enter into a contract was absent
  • None of these
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The Correct Option is B

Solution and Explanation

As per the principle, a \emph{proposal} must express a willingness to be bound upon acceptance. Asking for the “lowest cash price” is not a binding offer—it is merely an \emph{invitation to offer} (also called invitation to treat), aimed at inviting the other party to make an offer.
Shyam Sunder’s reply stating “Lowest price is Rs. 20 lakh” did not constitute an offer to sell; it simply responded to the query with a price.
Ramanuj’s acceptance therefore was actually an \emph{offer}, which Shyam Sunder was free to accept or reject.
Hence, no contract was formed, and Shyam Sunder could refuse to sell.
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