M places an order with N to supply 1000 bales of cotton. N sent 1200 bales. In this case, (i) M is entitled to reject the whole or he may accept 1000 bales and reject the rest and (ii) if N accepts all the 1200 bales, he must pay for them at the contract price.

Both statements are TRUE. (i) M can reject the excess 200 bales entirely or accept exactly what he ordered (1000) and reject the rest - this is the buyer's right on oversupply. (ii) If M accepts all 1200 bales, he must pay the contract rate for all accepted goods. When buyer voluntarily accepts excess delivery, he can't insist on paying only for ordered quantity - he's bound by contract price for what he takes.