Multiple choice

Fact: offered to purchase a lodge owned by P for Rs 6,000. He wrote to P's agent asking whether his offer was accepted. He also added that he was ready to accept any higher price if found reasonable. The agent replied,” Would not accept less than Rs. 10, 000 “. D accepted this and brought a suit for specific performance. Issue: Is P liable for specific performance?

  1. P is liable for the specific performance of the contract entered into D and P.

  2. P is not liable because there is only offer or counter offer but no formal/legal offer and acceptance. Hence no valid contract, hence P not liable.

  3. The contract is voidable at the option of D.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The agent's statement 'Would not accept less than Rs 10,000' is a counter-offer, not an acceptance. A counter-offer terminates the original offer. When D accepted the counter-offer, there was no original offer left to accept, so no valid contract was formed.

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