Question:

Principle: When one person signifies to another his willingness to do or abstain from doing anything, with a view to obtaining the assent of that person to such an act or abstinence, he is said to have made a proposal.

Fact: "Ramanuj telegraphed to Shyam Sunder, writing: Will you sell me your Rolls Royce CAR? Telegram the lowest cash price." Shyam Sunder also replied by telegram: "Lowest price for CAR is Rs. 20 lakh." Ramanuj immediately sent his consent through telegram stating: "I agree to buy the CAR for Rs. 20 lakh asked by you." Shyam Sunder refused to sell the car.

Show Hint

Ask, telegram by telegram, whether the sender signified willingness with a view to getting the other's assent. A bare quotation of the lowest price does neither.
Updated On: Jul 17, 2026
  • He cannot refuse to sell the CAR because the contract has already been made.
  • He can refuse to sell the CAR because it was only invitation to offer and not the real offer
  • It was not a valid offer because willingness to enter into a contract was absent
  • None of these
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The Correct Option is B

Solution and Explanation

Step 1: Understanding the Question:
Three telegrams passed between the two men. The question is whether any of them amounted to a proposal, because a contract can only be built on a proposal plus an acceptance of it. Shyam Sunder has refused to hand over the car, and we must say whether he is free to do that.

Step 2: Key Formula or Approach:
The Principle sets one test for a proposal. The speaker must signify willingness to do something, and he must do it with a view to obtaining the assent of the other person. Both parts must be present. A message that only supplies information fails the test, because supplying a figure is not the same as asking someone to say yes.

Step 3: Detailed Explanation:
Look at telegram one. Ramanuj asks two things, whether Shyam will sell and what the lowest cash price is. This is an enquiry. Ramanuj is not signifying his own willingness to do anything on stated terms, so it is not a proposal.
Look at telegram two. Shyam replies "Lowest price for CAR is Rs. 20 lakh". He answers only the price question. He never says he is willing to sell, and he never asks Ramanuj to assent to a sale. Both limbs of the test are missing, so this is a mere statement of price, an invitation to offer.
Look at telegram three. Ramanuj says "I agree to buy the CAR for Rs. 20 lakh". Since there was no proposal on the table, this cannot be an acceptance. It is itself the first real proposal in the exchange, and it is Ramanuj who is making it.
Now apply that. A proposal binds nobody until the other side accepts. Shyam never accepted Ramanuj's proposal. There is no contract, so Shyam is free to refuse to sell the car.

Step 4: Checking the wrong options:
Option (A) assumes a completed contract. It treats the price quotation as an offer, which the Principle does not allow, so it fails.
Option (C) says the offer was invalid because willingness was absent. That describes Shyam's price telegram accurately, but it does not answer the actual question, which is whether Shyam may refuse to sell. It also mislabels the exchange, since Ramanuj's third telegram was a perfectly valid offer, just an unaccepted one.
Option (D) is not needed once a fitting option exists.

Step 5: Final Answer:
Quoting a lowest price is only an invitation to offer, so no contract arose and Shyam Sunder can refuse to sell. That is option (B).
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