Multiple choice

A, by letter, offers to sell his iPod to B for Rs. 20,000. Without knowing A's offer, B, by a letter, offers to buy the same iPod from A for Rs. 20,000. Here

  1. A binding contract comes into existence B' s letter is equivalent to acceptance of A's offer

  2. No binding contract comes into existence as B' s letter is merely a cross offer

  3. No binding contract comes into existence as consideration is insufficient

  4. The indian contract Act is silent on such issues
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Cross offers occur when two parties make identical offers to each other in ignorance of the other's offer. In such cases, there is no mutual acceptance because neither party was aware of the other's proposal at the time of writing. Therefore, no binding contract is formed until one of the offers is explicitly accepted.

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