Question

A person P offers to sell his car to Q for Rs.5 Lakhs and asks Q to reply within 6 days. On the 4th day, P sells his car to R without informing Q. On the 5th day, Q accepts the offer given by P. Which one of the following is correct?

• A. P is bound to sell the car to Q
• B. No contract exists because P sold the car to R before the acceptance
• C. Q can compel p for specific performance automatically
• D. The offer becomes void only after 6 days

Hint:

An offer can be revoked anytime before the offeree accepts it.
Selling the subject matter of the offer to someone else makes the original offer impossible to perform, thereby effectively terminating the offer before acceptance.

Answer 1

The Correct Option is B

Step 1: Understanding the Question:
The question presents a scenario involving offer and acceptance, revocation of offer, and the creation of a contract.
We need to determine if a binding contract exists between P and Q when P sells the subject matter to a third party before Q accepts.


Step 2: Key Principle / Approach:
Under the Indian Contract Act, 1872, an offer can be revoked at any time before the communication of its acceptance is complete as against the proposer. Revocation can be express or implied by conduct that is inconsistent with the continuation of the offer.


Step 3: Detailed Explanation:

• Under Section 5 of the Indian Contract Act, a proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards.

• Section 6 of the Act outlines the methods of revocation, which includes the lapse of time, failure to fulfill conditions, or by the communication of notice of revocation.

• When P sells the car to R on the 4th day, P's action constitutes an implied revocation of the offer made to Q, as the subject matter of the contract is no longer available.

• Even though P did not directly inform Q, the actual sale of the car to R precludes the formation of a contract between P and Q because a valid contract requires consensus ad idem (meeting of minds) on an existing subject matter.

• Since the offer was effectively revoked by P's conduct prior to Q's attempted acceptance on the 5th day, no valid agreement or contract was formed between them.



Step 4: Final Answer:
No contract exists because P sold the car to R before the acceptance, corresponding to Option (B).