Question

In case a contract is entered into through instantaneous modes of communication, which of the following is correct?

• A. Section 4 of the Indian Contract Act, 1872 is not applicable stricto sensu.
• B. Section 4 of the Indian Contract Act, 1872 is applicable to acceptance communicated by instantaneous modes of communication.
• C. Information Technology Act, 2000 provides rules regarding the time when offer and acceptance are complete
• D. Information Technology Act, 2000 expressly provides for instantaneous mode of communication for contract.
• A. An offer.
• B. Counter offer.
• C. Invitation to offer.
• D. Acceptance in advance.
• A. It deals with the void contract due to ceasing of enforceability by law.
• B. It deals with the contract which is not void from its inception but later it becomes void.
• C. It deals with the agreement which is void from its inception
• D. It deals with the contract which becomes void from the time of its ceasing of enforceability by law.
• A. Counter offer leads to rejection of the original offer.
• B. Counter offer creates a binding contract on the basis of the terms specified in the counter offer.
• C. Counter offer creates a legal binding obligation on the basis of the terms of original offer.
• D. Counter offer shall be binding on original proposer in the same way as it is made by him only.
• A. Unqualified
• B. Conditional
• C. Absolute
• D. Both (A) and (C).
• A. Offer and acceptance, lawful consideration, intention to create legal relations, competent parties.
• B. Offer and acceptance, competent parties, lawful consideration, free consent, intention to create legal relations.
• C. Offer and acceptance, lawful object, lawful consideration; free consent.
• D. Offer and acceptance, lawful consideration, lawful object, free consent, competent parties, intention to create legal relations.

Answer 1

The Correct Option is A

The correct option is (A) : Section 4 of the Indian Contract Act, 1872 is not applicable stricto sensu.

Answer 2

Section 4 of the Indian Contract Act, 1872 was drafted with postal communication in mind, where there is a time gap between dispatch and receipt of an acceptance. Instantaneous modes such as telephone or telex do not have that gap, and each option can be checked against how courts have applied the section to such modes.

1. Option A (Section 4 not applicable stricto sensu): Because Section 4 rests on the postal rule, under which acceptance is complete against the proposer once the letter is posted, courts have held that this rule cannot be applied literally to instantaneous communication, where the parties are, in effect, in each other's presence and can immediately confirm receipt. The Supreme Court took this view in dealing with contracts formed over the telephone, treating the ordinary contract law principle of communication at the place and time acceptance is received as more appropriate than the postal rule.
2. Option B (Section 4 applicable to instantaneous communication): This is the opposite of the position the courts have taken, since applying the postal rule strictly to instantaneous modes would produce the odd result of a contract being complete before the offeror even knows acceptance occurred, which instantaneous communication does not permit.
3. Option C (IT Act 2000 provides rules on time offer and acceptance are complete): The Information Technology Act, 2000 deals with attribution, dispatch, and receipt of electronic records for purposes like e-governance and electronic evidence, but it does not lay down a comprehensive scheme fixing the moment offer and acceptance are complete for contract formation in the way this option suggests.
4. Option D (IT Act 2000 expressly provides for instantaneous mode of communication for contracts): The Act does not carve out an express, contract-specific rule for instantaneous communication of offer and acceptance; contract formation over instantaneous media continues to be worked out under general contract law principles rather than a dedicated statutory rule.

Since the postal rule under Section 4 does not fit the mechanics of instantaneous communication, and neither the Contract Act nor the IT Act supplies a substitute statutory rule specific to it, the position is that Section 4 is not applied in its strict form to such contracts.

Hence, the correct answer is Section 4 of the Indian Contract Act, 1872 is not applicable stricto sensu.

Answer 3

The correct option is (C) : Invitation to offer.

Answer 4

Contract law distinguishes an "offer," which can be accepted to form a binding contract, from an "invitation to offer" (or invitation to treat), which merely invites others to make offers. Displayed goods with price tags are a classic illustration used to test this distinction.

1. Option A (An offer): If display were treated as an offer, then the shopkeeper would be bound to sell to the first customer who "accepts" simply by picking up the item, leaving no room for the shopkeeper to decline a sale, for instance where stock has run out. Courts, following the reasoning in cases like Pharmaceutical Society of Great Britain v Boots Cash Chemists, have rejected this view.
2. Option B (Counter offer): A counter offer arises only after an original offer has been made and the offeree responds with different terms. There is no prior offer in play when goods are simply displayed with a price, so this label does not fit the situation at all.
3. Option C (Invitation to offer): Displaying goods with prices is treated as the shopkeeper inviting customers to make offers to buy, with the actual offer coming from the customer at the counter, and the contract forming only when the shopkeeper accepts that offer, typically by billing the item. This matches the settled legal characterisation.
4. Option D (Acceptance in advance): There is no earlier offer that the display could be "accepting," so this option misdescribes the sequence of offer and acceptance entirely.

Because treating a price-tagged display as a binding offer would strip the seller of the freedom to decline a sale, the law instead treats it as an invitation for customers to make offers.

Hence, the correct answer is Invitation to offer.

Answer 5

The correct option is (C) : It deals with the agreement which is void from its inception

Answer 6

Section 2(j) of the Indian Contract Act, 1872 defines a "void contract" as "a contract which ceases to be enforceable by law becomes void when it ceases to be enforceable." The question asks which statement about this definition is false, so each option needs to be checked against what "ceasing to be enforceable" actually means.

1. Option A (deals with a contract void due to ceasing of enforceability by law): This tracks the definition closely, since Section 2(j) is precisely about a contract losing its enforceability over time, so this statement is true.
2. Option B (deals with a contract not void from inception but later becomes void): A contract that "ceases" to be enforceable was, by definition, enforceable to begin with, meaning it was valid when made and only later lost that quality, for example, due to supervening impossibility. This is an accurate description, so the statement is true.
3. Option C (deals with an agreement void from its inception): An agreement that is void from the outset is governed by the separate definition in Section 2(g), "an agreement not enforceable by law is said to be void," not by Section 2(j), which is concerned with contracts that were valid and only later ceased to be enforceable. Since this statement wrongly attributes the "void ab initio" idea to Section 2(j), it is false.
4. Option D (deals with a contract that becomes void from the time of its ceasing of enforceability): This restates the operative part of the definition accurately, since the contract becomes void precisely at the point it stops being enforceable, so this statement is true.

Because Section 2(j) is about a previously valid and enforceable contract losing that status, and not about an agreement that was void from the moment it was made, the statement attributing "void from inception" to Section 2(j) does not hold.

Hence, the correct answer, being the statement that is NOT true, is it deals with the agreement which is void from its inception.

Answer 7

The correct option is (A) : Counter offer leads to rejection of the original offer.

Answer 8

A counter offer is the offeree's response that changes the terms of the original offer instead of accepting it as it stands. What effect this has can be worked out from the basic rule that acceptance must mirror the offer exactly.

1. Option A (leads to rejection of the original offer): Since a counter offer substitutes new terms for the original ones, it operates as a rejection of the original offer, which then can no longer be accepted by the original offeree unless the original offeror chooses to revive it. This is the settled position, illustrated in Hyde v Wrench, where a buyer's counter offer at a lower price was held to have destroyed the seller's original offer.
2. Option B (creates a binding contract on the terms of the counter offer): A counter offer, by itself, does not create a contract; it merely puts a fresh offer before the original proposer, who is free to accept, reject, or further negotiate it. A contract only comes into being if that new offer is itself accepted.
3. Option C (creates a legal binding obligation on the terms of the original offer): Because the counter offer has already displaced the original offer, there is nothing left of the original offer to bind either party to; it cannot be revived simply because the counter offer was made.
4. Option D (binding on the original proposer in the same way as if made by him only): A counter offer is made by the offeree, not the original proposer, and it does not bind the proposer at all unless and until the proposer chooses to accept it.

Since making a counter offer amounts to declining the original offer rather than accepting it, and no contract arises merely from making one, its principal legal effect is to terminate the original offer.

Hence, the correct answer is Counter offer leads to rejection of the original offer.

Answer 9

The correct option is (D) : Both (A) and (C).

Answer 10

Section 7 of the Indian Contract Act, 1872 requires acceptance to be absolute and unqualified to convert a proposal into a promise. Checking each option against that requirement shows which quality, or qualities, a valid acceptance must actually have.

1. Option A (Unqualified): An acceptance that adds no new terms and simply agrees to the offer as it stands is "unqualified," and this is expressly required by Section 7, so this option correctly identifies one necessary quality.
2. Option B (Conditional): A conditional acceptance introduces a fresh term or condition, which turns it into a counter offer rather than a true acceptance, so this is the opposite of what a valid acceptance needs to be.
3. Option C (Absolute): Section 7 also requires acceptance to be "absolute," meaning it must match the offer completely without variation, so this too is correctly identified as a necessary quality.
4. Option D (Both A and C): Since Section 7 requires acceptance to be both absolute and unqualified together, and neither quality alone captures the full statutory requirement, the option combining them is the one that reflects the section accurately.

Because the statute uses "absolute and unqualified" as a joint requirement rather than offering a choice between the two, an acceptance must satisfy both qualities at once to be valid.

Hence, the correct answer is Both (A) and (C).

Answer 11

The correct option is (D) : Offer and acceptance, lawful consideration, lawful object, free consent, competent parties, intention to create legal relations.

Answer 12

Section 10 of the Indian Contract Act, 1872 lists the essential ingredients of a valid contract: parties competent to contract, free consent, a lawful consideration and a lawful object, together with an intention to create legal relations implicit in treating the agreement as a contract. Checking each option against this full list shows which one, if any, is missing an element.

1. Option A: This list covers offer and acceptance, lawful consideration, intention to create legal relations, and competent parties, but leaves out free consent and lawful object, both of which Section 10 treats as essential, so it is incomplete.
2. Option B: This list adds free consent to competent parties, lawful consideration, and intention, but still omits lawful object as a separate essential, so it too falls short of the full requirement.
3. Option C: This list includes lawful object, lawful consideration, and free consent, but drops competent parties and intention to create legal relations, leaving important essentials out.
4. Option D: This is the only option that brings together offer and acceptance, lawful consideration, lawful object, free consent, competent parties, and intention to create legal relations, matching the complete set of essentials found in Section 10 and the surrounding provisions of the Act.

Since a contract is only "valid" if none of these essentials is missing, an option that leaves out even one of them, such as lawful object or competent parties, cannot be the complete answer.

Hence, the correct answer is Offer and acceptance, lawful consideration, lawful object, free consent, competent parties, intention to create legal relations.