BUSINESS LAWS QUESTION BANK CHAPTER:2: U1

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Chapter: 2 – Indian Contract Act, 1872

Unit: 1 – Nature of Contracts
(Covers All RTP, MTP, PYQ, ICAI SM, MDTP till Jan 2025)

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22 – Mr. A offered to sell 25 chairs to Mr. B @ ₹ 1,500 per chair on 12.02.2024. A

promised B that he would keep the offer open till 15.02.2024. However, on 13.02.2024,
he sold those chairs to Mr. C @ 1,700 per chair without the knowledge of B. Mr. B
communicated the acceptance of the above offer on 14.02.2024. ICA Advise, with
reference to provisions of The Indian Contract Act, 1872 whether Mr. B can claim
damages from Mr. A? 1)a)ii)2m,MDTP10, 1)a)ii)2m,Sept2024

Ans – In terms of Section 5 of the Indian Contract Act, 1872, a proposal can be revoked at any
time before the communication of its acceptance is complete as against the proposer.

Accordingly, an offer may be revoked by the offeror before its acceptance, even though he had
originally agreed to hold it open for a definite period of time. So long as it is a mere offer, it can
be withdrawn whenever the offeror desires.

In the instant case, B cannot claim damages from A because the offer made by A is a mere offer
and it can be withdrawn whenever A desires.

21 - Mr. Ayush is the principal in Modern Public School. He needs 2000 packets of Biscuits
to be distributed to students in his school on the occasion of Republic Day celebration. For
this purpose, he contracted with Yograj Biscuit Company. Mr. Ayush visited the workshop
of Yograj Biscuit Company and was very much satisfied with the quality of biscuits. He also
found that a large number of varieties of biscuits are manufactured in the workshop. He
ordered 2000 packs of biscuits and gave the token money but did not specify the category
of biscuits, he needed. Yograj Biscuit Company did not supply the biscuits on the due date.
Mr. Ayush filed the suit against Yograj Biscuit Company for compensation. State with
reasons, whether Yograj Biscuit Company is liable under Indian Contract Act, 1872?
1)a)4m,MTP1,Dec2023

Ans - According to the Indian Contract Act 1872, the meaning of agreement must be certain
and not vague or indefinite. If the meaning of agreement is not certain, the agreement is not
enforceable by law.

In the instant case, Mr. Ayush is being principal in Modern Public School ordered 2000 packs of
biscuits to Yograj Biscuit Company for the purpose of distribution on Republic Day among
students. He also gave the token money but did not specify the category of biscuits. Yograj
Biscuit Company did not supply the biscuits on the due date and Mr. Ayush filed the suit for
compensation.

On the basis of above provisions and facts, it can be said that the agreement was not
enforceable for want of certainty of meaning as Mr. Ayush did not specify the category of
biscuits. Hence, Yograj Biscuit Company is not liable to pay any compensation to Mr. Ayush.
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20 - Radha invited her ten close friends to celebrate her 25th birthday party on 1st
January, 2023 at 7.30 P.M. at a well-known "Hi-Fi Restaurant" at Tonk Road, Jaipur. All
invited friends accepted the invitation and promised to attend the said party. On request
of the hotel manager, Radha deposited ` 5,000/- as non-refundable security for the said
party. On the scheduled date and time, three among ten invited friends did not turn up for
the birthday party and did not convey any prior communication to her. Radha, enraged with
the behaviour of the three friends, wanted to sue them for loss incurred in the said party.
Advise as per the provisions of the Indian Contract Act, 1872.

Would your answer differ if the said party had been a "Contributory 2023 New Year
celebration Party" organized by Radha? 1)a)4m,June2023

Ans - As per one of the requirements of Section 10 of the Indian Contract Act, 1872, there
must be an intention on the part of the parties to create legal relationship between them. Social
or domestic agreements are not enforceable in court of law and hence they do not result into
contracts.

In the instant case, Radha cannot sue her three friends for the loss incurred in the said party as
the agreement between her and her ten friends was a social agreement, and the parties did not
intend to create any legal relationship.

If the said party organised by Radha had been a “Contributory 2023 New year celebration
party”, then Radha could have sued her three friends for the loss incurred in the said party as
the agreement between her and her friends would have legal backing; on the basis of which
Radha deposited the advance amount and the parties here intended to create legal relationship.

19 - Distinguish between Void Contract and Voidable Contract according to the Indian
Contract Act, 1872. 6)a)5m,June2023

Ans -

S.No. Basis Void Contract Voidable Contract

1 Meaning A Contract which ceases to be An agreement which is enforceable

enforceable by law becomes by law at the option of one or more
void when it ceases to be of the parties thereto, but not at
enforceable. the option of the other or others, is
a voidable contract.

2 Enforceability A void contract cannot be It is enforceable only at the option

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enforced at all. of aggrieved party and not at the

option of the other party.

3 Cause A contract becomes void due A contract becomes a voidable

to change in law or change in contract if the consent of a party
circumstances beyond the was not free.
contemplation of parties.

4 Performance A void contract cannot be If the aggrieved party does not,

of contract performed. within reasonable time, exercise his
right to avoid the contract, any
party can sue the other for claiming
the performance of the contract.

5 Rights A void contract does not grant The party whose consent was not
any legal remedy to any party. free has the right to rescind the
contract within a reasonable time.
If so rescinded it becomes a void
contract. If it is not rescinded it
becomes a valid contract.

18 - Mr. Joy owns two flats in a building. He wanted to sell flat no.101 to Mr. Roy. Mr.
Joy offered to sell his flat no. 101 to Mr. Roy, but Mr. Roy thought that Mr. Joy wanted
to sell flat no. 102 and said yes for the agreement. Considering the provisions of Indian
Contract Act, 1872, discuss the validity of such a contract.

1)a)4m,MTP2,June2022

Ans - Section 10 of Indian Contract Act, 1872 laid done the essential elements of a valid
contract. One of the essential elements of valid contract is free consent. Consent is an express
willingness or giving voluntary permission or agreeing to something. Section 13 further clarify"
two or more persons are said to consent when they agree upon the same thing in the same sense"

In the present case, both the parties have given a free consent but they are not consenting for
the same thing in the same sense. Mr. Joy wants to sell flat no. 101 and Mr. Roy has agreed the
contract thinking that it's flat no. 102.

Hence, the agreement would be invalidated at the inception (beginning) stage itself because both
the parties did not agree about a thing (sale of flat) in the same sense. Hence, both the parties
did not have mutual consent for the contract; therefore it is not a valid contract.

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17 - Mr. Aseem is a learned advocate. His car was stolen from his house. He gave an
advertisement in newspaper that he will give the reward of ` 10,000 who will give the
information about his car. Mr. Vikram reads the advertisement and on making some efforts
got the stolen car and informed Mr. Aseem. Mr. Aseem found his car but denied giving
reward of ` 10,000 to Mr. Vikram with the words, “An advertisement in newspaper is just
an invitation to make offer and not an offer. Hence, he is not liable to make the reward.”
State with reasons whether under Indian Contract Act, 1872, Mr. Vikram can claim the
reward of ` 10,000. RTP,June2022

Ans - An invitation to offer is different from offer. Quotations, menu cards, price tags,
advertisements in newspaper for sale are not offer. These are merely invitations to public to
make an offer. An invitation to offer is an act precedent to making an offer. Acceptance of an
invitation to an offer does not result in the contract and only an offer emerges in the process of
negotiation. But there is an exception to above provisions. When advertisement in newspaper is
made for reward, it is the general offer to public.

On the basis of above provisions and facts, it can be said that as advertisement made by Mr.
Aseem to find lost car is an offer, he is liable to pay ` 10,000 to Mr. Vikram.

16 - “All contracts are agreements, but all agreements are not contracts”. Comment.
2)a)4m,MTP2,June2022, 2)a)i)4m,MTP2,Dec2021, ICAI Module

Ans - An agreement comes into existence when one party makes a proposal or offer to the
other party and that other party gives his acceptance to it. A contract is an agreement
enforceable by law. It means that to become a contract, an agreement must give rise to a legal
obligation i.e. duly enforceable by law. If an agreement is incapable of creating a duly
enforceable by law, it is not a contract. There can be agreements which are not enforceable by
law, such as social, moral or religious agreements. The agreement is a wider term than the
contract. All agreements need not necessarily become contracts but all contracts shall always be
agreements.

All agreements are not contracts: When there is an agreement between the parties and they do
not intend to create a legal relationship, it is not a contract.

All contracts are agreements: For a contract there must be two things (a) an agreement and (b)
enforceability by law. Thus, existence of an agreement is a pre-requisite existence of a contract.
Therefore, it is true to say that all contracts are agreements.

Thus, we can say that there can be an agreement without it becoming a contract, but we can’t
have a contract without an agreement.

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15 - Ashok goes to super market to buy a Air Conditioner. He selects a branded Air
Conditioner having a price tag of ` 40,000 after a discount of ` 3000. Ashok reaches at
cash counter for making the payment, but cashier says, “Sorry sir, the discount was upto
yesterday. There is no discount from today. Hence you have to pay ` 43,000.” Ashok got
angry and insists for ` 40,000. State with reasons whether under Indian Contract Act,
1872, Ashok can enforce the cashier to sell at discounted price i.e. ` 40,000.

1)a)i)4m,MDTP6, 1)a)i)4m,MTP2,Sept2024, 1)a)4m,MTP1,June2023,

Sim,1)a)4m,MTP1,Dec2021

Ans - An invitation to offer is different from offer. Quotations, menu cards, price tags,
advertisements in newspaper for sale are not offer. These are merely invitations to public to
make an offer. An invitation to offer is an act precedent to making an offer. Acceptance of an
invitation to an offer does not result in the contract and only an offer emerges in the process of
negotiation.

In the instant case, Ashok reaches to super market and selects a Air Conditioner with a
discounted price tag of ` 40,000 but cashier denied to sell at discounted price by saying that
discount is closed from today and request to make full payment. But Ashok insists to purchase at
discounted price.

On the basis of above provisions and facts, the price tag with Air Conditioner was not offer. It
is merely an invitation to offer. Hence, it is the Ashok who is making the offer not the super
market. Cashier has right to reject the Ashok’s offer. Therefore, Ashok cannot enforce cashier
to sell at discounted price.

14 - Mr. Parth applied for a job as principal of a school. The school management decided
to appoint him. One member of the school management committee privately informed Mr.
Parth that he was appointed but official communication was not given by the school. Later,
the management of the school decided to appoint someone else as a principal. Mr. Parth
filed a suit against the school for cancellation of his appointment and claimed damages for
loss of salary. State with reasons, will Mr. Parth be successful in suit filed against school
under the Indian Contract Act, 1872? RTP,June2024, RTP,Dec2021

Ans – As per the rules of acceptance, the acceptance should be communicated to offeror by
offeree himself or by his authorized agent. Communication of acceptance by third person cannot
be concluded as valid acceptance.

In the instant case, Mr. Parth applied for a job as principal of a school and one member of the
school management committee privately informed Mr. Parth that he was appointed. Later, the
management of the school appointed someone else as a principal.
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On the basis of the above provisions and facts, communication of appointment of Mr. Parth
should be made by the school management committee or by any authorised agent. Communication
by third person cannot be termed as communication of acceptance. Therefore, no valid contract
was formed between Mr. Parth and the school and Mr. Parth cannot file a suit against the school
for cancellation of his appointment.

13 - “An agreement, the meaning of which is not certain, is void”. Discuss.

RTP,Dec2021

Ans - Agreement - the meaning of which is uncertain (Section 29 of the Indian Contract
Act, 1872): An agreement, the meaning of which is not certain, is void, but where the meaning
thereof is capable of being made certain, the agreement is valid.

For example, A agrees to sell B “a hundred tons of oil”. There is nothing whatever to show what
kind of oil was intended. The agreement is void for uncertainty. But the agreement would be valid
if A was dealer only in coconut oil because in such a case its meaning would be capable of being
made certain.

12 - Define the term “Acceptance’. Discuss the legal provisions relating to communication of
acceptance. RTP,Dec2020

Ans - According to Section 2(b), the term ‘acceptance’ is defined as follows:

“When the person to whom the proposal is made signifies his assent thereto, the proposal is said
to be accepted. A proposal, when accepted, becomes a promise. “

An acceptance in order to be valid must be absolute, unqualified, accepted according to the mode
if any prescribed within the reasonable time and communicated to offeror. Acceptance can also
be made by way of conduct.

The legal provisions relating to communication of acceptance are contained in Section 4.

The communication of an acceptance is complete:

a) as against the proposer, when it is put in a course of transmission to him, so as to be out

of power of the acceptor;

b) as against the acceptor, when it comes to the knowledge of the proposer.

Section 3 of the Act prescribes, in general terms, two modes of communication, namely:

1) by any act or

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2) by omission intending thereby communicate to the other or which has the effect of
communicating it to the other.

The first method would include any conduct and words whether written or oral. Written words
would include letters, telegrams, advertisements, etc. Oral words would include telephone
messages. Any conduct would include positive acts or signs so that the other person understands
what the person acting or making signs means to say or convey. Omission would exclude silence
but include such conduct or forbearance on one’s part that the other person takes it as his
willingness or assent. These are not the only modes of communication of the intention of the
parties. There are other means as well, e.g., if you as the owner, deliver the goods to me as the
buyer thereof at a certain price, this transaction will be understood by everyone, as acceptance
by act or conduct, unless there is an indication to the contrary.

The phrase appearing in Section 3 “which has the effect of communicating it”, clearly refers to
an act or omission or conduct which may be indirect but which results in communicating an
acceptance or non-acceptance. However, a mere mental but unilateral act of assent in one’s own
mind does not tantamount to communication, since it cannot have the effect of communicating it
to the other.

11 - Shambhu Dayal started “self service” system in his shop. Smt. Prakash entered the
shop, took a basket and after taking articles of her choice into the basket reached the
cashier for payments. The cashier refuses to accept the price. Can Shambhu Dayal be
compelled to sell the said articles to Smt. Prakash? Decide as per the provisions of the
Indian Contract Act, 1872.

2)a)ii)3m,MTP2,Dec2021, 1)a)4m,MTP2,June2021, 1)a)4m,MTP1,June2019, ICAI Module

Ans - Invitation to offer: The offer should be distinguished from an invitation to offer. An
offer is the final expression of willingness by the offeror to be bound by his offer should the
party chooses to accept it. Where a party, without expressing his final willingness, proposes
certain terms on which he is willing to negotiate, he does not make an offer, but invites only the
other party to make an offer on those terms. This is the basic distinction between offer and
invitation to offer.

The display of articles with a price in it in a self-service shop is merely an invitation to offer. It
is in no sense an offer for sale, the acceptance of which constitutes a contract. In this case,
Smt. Prakash by selecting some articles and approaching the cashier for payment simply made an
offer to buy the articles selected by her. If the cashier does not accept the price, the
interested buyer cannot compel him to sell.

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10 - Define an offer. Explain the essentials of a valid offer. How an offer is different
from an invitation to offer? RTP,Dec2019

Ans - Definition: The word Proposal and offer are used interchangeably and it is defined under
Section 2(a) of the Indian Contract Act, 1872 as when one person signifies to another his
willingness to do or to abstain from doing anything with a view to obtaining the assent of that
other to such act or abstinence, he is said to make a proposal.

Essentials: The following are important essentials of an offer: -

• Must be capable of creating legal relation.

• Must be certain, definite and not vague.

• Must be communicated.

• Must be made with a view to obtaining the assent of the other party

• May be conditional

• Offer should not contain a term the non compliance of which would amount to acceptance

• May be general or specific

• May be expressed or implied

• A statement of price is not an offer

Offer and an Invitation to an offer: In terms of Section 2(a) of the Act, an offer is the final
expression of willingness by the offeror to be bound by the offer should the other party
chooses to accept it. On the other hand, offers made with the intention to negotiate or offers
to receive offers are known as invitation to offer. Thus, where a party without expressing his
final willingness proposes certain terms on which he is willing to negotiate he does not make an
offer, but only invites the other party to make an offer on those terms. Hence, the only thing
that is required is the willingness of the offeree to abide by the terms of offer.

09 - A sends an offer to B to sell his second-car for ` 1,40,000 with a condition that if B
does not reply within a week, he (A) shall treat the offer as accepted. Is A correct in his
proposition? What shall be the position if B communicates his acceptance after one week?
RTP,Dec2019, ICAI Module

Ans – Acceptance to an offer cannot be implied merely from the silence of the offeree, even if
it is expressly stated in the offer itself. Unless the offeree has by his previous conduct
indicated that his silence amount to acceptance, it cannot be taken as valid acceptance. So in the
given problem, if B remains silent, it does not amount to acceptance.
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The acceptance must be made within the time limit prescribed by the offer. The acceptance of
an offer after the time prescribed by the offeror has elapsed will not avail to turn the offer
into a contract.

08 – Comment on the following statements:

a) Acceptance must be absolute and unqualified.

b) Acceptance must be in the prescribed mode. RTP,June2019

Ans – a) Acceptance must be absolute and unqualified: As per section 7 of the Indian Contract
Act, 1872 acceptance is valid only when it is absolute and unqualified and is also expressed in
some usual and reasonable manner unless the proposal prescribes the manner in which it must be
accepted. If the proposal prescribes the manner in which it must be accepted, then it must be
accepted accordingly.

Example: ‘A’ enquires from ‘B’, “Will you purchase my car for ` 2 lakhs?” If ‘B’ replies “I shall
purchase your car for ` 2 lakhs, if you buy my motorcycle for ` 50000/-, here ‘B’ cannot be
considered to have accepted the proposal. If on the other hand ‘B’ agrees to purchase the car
from ‘A’ as per his proposal subject to availability of valid Registration Certificate / book for the
car, then the acceptance is in place though the offer contained no mention of R.C. book. This is
because expecting a valid title for the car is not a condition. Therefore, the acceptance in this
case is unconditional.

b) Acceptance must be in the prescribed mode: Where the mode of acceptance is prescribed
in the proposal, it must be accepted in that manner. But if the proposer does not insist on the
proposal being accepted in the manner prescribed after it has been accepted otherwise, i.e., not
in the prescribed manner, the proposer is presumed to have consented to the acceptance.

Example: If the offeror prescribes acceptance through messenger and offeree sends
acceptance by email, there is no acceptance of the offer if the offeror informs the offeree that
the acceptance is not according to the mode prescribed. But if the offeror fails to do so, it will
be presumed that he has accepted the acceptance and a valid contract will arise.

07 - A mobile phone was displayed in a shop with a price tag of `10,000 attached to the
mobile display box. As the price displayed was very less as compared to M.R.P. of the
mobile phone, Y, a customer rushed to the cash counter and asked the shopkeeper to
receive the payment and pack up the mobile phone. The shopkeeper refused to hand over
the mobile phone to Y in consideration of the price indicated in the price tag attached to
the mobile phone. Y seeks your advice whether he can sue to shopkeeper for the above
cause under the Indian Contract Act, 1872. 3)b)i)3m,Dec2023, 3)b)ii)3m,Dec2018
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Ans - An invitation to offer is different from offer. Quotations, menu cards, price tags,
advertisements in newspaper for sale are not offer. These are merely invitations to public to
make an offer. An invitation to offer is an act precedent to making an offer. Acceptance of an
invitation to an offer does not result in the contract and only an offer emerges in the process of
negotiation.

In the instant case, Y reaches to shop and selects a Mobile Phone with a price tag of ` 10,000
but the shopkeeper refused to hand over the mobile phone to Y in consideration of the price
indicated in the price tag attached to the mobile phone.

On the basis of above provisions and facts, the price tag with the Mobile Phone was not offer. It
is merely an invitation to offer. Hence, it is Y who is making the offer and not the shopkeeper.
Shopkeeper has the right to reject Y’s offer. Therefore, Y cannot sue the shopkeeper for the
above cause.

06 - Mr. Ramesh promised to pay ` 50,000 to his wife Mrs. Lali so that she can spend the
sum on her 30th birthday. Mrs. Lali insisted her husband to make a written agreement if
he really loved her. Mr. Ramesh made a written agreement and the agreement was
registered under the law. Mr. Ramesh failed to pay the specified amount to his wife Mrs.
Lali. Mrs. Lali wants to file a suit against Mr. Ramesh and recover the promised amount.
Referring to the applicable provisions of the Contract Act, 1872, advise whether Mrs. Lali
will succeed. 3)b)i)3m,Dec2018

Ans - Parties must intend to create legal obligations: There must be an intention on the part of
the parties to create legal relationship between them. Social or domestic type of agreements are
not enforceable in court of law and hence they do not result into contracts.

In the given question, Mr. Ramesh promised to pay ` 50,000 to his wife so that she can spend
the same on her birthday. However, subsequently, Mr. Ramesh failed to fulfil the promise, for
which Mrs. Lali wants to file a suit against Mr. Ramesh. Here, in the given circumstance wife will
not be able to recover the amount as it was a social agreement and the parties did not intend to
create any legal relations.

05 - Father promised to pay his son a sum of rupee one lakh if the son passed C.A.
examination in the first attempt. The son passed the examination in the first attempt, but
father failed to pay the amount as promised. Son files a suit for recovery of the amount.
State along with reasons whether son can recover the amount under the Indian Contract
Act, 1872. 1)a)4m,MTP2,Dec2018

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Ans - Problem asked in the question is based on the provisions of the Indian Contract Act, 1872
as contained in section 10. According to the provisions there should be an intention to create
legal relationship between the parties. Agreements of a social nature or domestic nature do not
contemplate legal relationship and as such are not contracts, which can be enforced. This
principle has been laid down in the case of Balfour v. Balfour. Accordingly, applying the above
provisions and the case decision, in this case son cannot recover the amount of Rs. 1 lakh from
father for the reasons explained above.

04 - Explain the modes of revocation of an offer as per the Indian Contract Act, 1872.
6)a)5m,June2018, 2)a)7m,MTP1,Dec2018

Ans – Modes of revocation of Offer

i) By notice of revocation

ii) By lapse of time: The time for acceptance can lapse if the acceptance is not given within
the specified time and where no time is specified, then within a reasonable time.

iii) By non-fulfillment of condition precedent: Where the acceptor fails to fulfill a condition
precedent to acceptance the proposal gets revoked.

iv) By death or insanity: Death or insanity of the proposer would result in automatic
revocation of the proposal but only if the fact of death or insanity comes to the
knowledge of the acceptor.

v) By counter offer

vi) By counter offer By the non- acceptance of the offer according to the prescribed or usual
mode

vii) By subsequent illegality

03 - Ramaswami proposed to sell his house to Ramanathan. Ramanathan sent his acceptance
by post. Next day, Ramanathan sends a telegram withdrawing his acceptance. Examine the
validity of the acceptance according to the Indian Contract Act, 1872 in the light of the
following:

a) The telegram of revocation of acceptance was received by Ramaswami before the letter
of acceptance.

b) The telegram of revocation and letter of acceptance both reached together.

RTP,Dec2018

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Ans – The problem is related with the communication and time of acceptance and its revocation.
As per Section 4 of the Indian Contract Act, 1872, the communication of an acceptance is
complete as against the acceptor when it comes to the knowledge of the proposer. An acceptance
may be revoked at any time before the communication of the acceptance is complete as against
the acceptor, but not afterwards.

Referring to the above provisions:

a) Yes, the revocation of acceptance by Ramanathan (the acceptor) is valid.

b) If Ramaswami opens the telegram first (and this would be normally so in case of a rational
person) and reads it, the acceptance stands revoked. If he opens the letter first and
reads it, revocation of acceptance is not possible as the contract has already been
concluded.

02 - Explain the type of contracts in the following agreements under the Indian Contract
Act, 1872:

i) Rahul contracts with Bhanu (owner of the factory) for the supply of 10 tons of
sugar, but before the supply is effected, the factory catches fire and everything is
destroyed.

ii) A coolie in uniform picks up the luggage of Rohan to be carried out of the railway
station without being asked by Rohan and Rohan allows him to do so.

iii) Obligation of finder of lost goods to return them to the true owner.
RTP,Sept2024, 2)i)4m,MTP1,Dec2022, RTP,June2020, RTP,Dec2018, ICAI Module

Ans – i) It is a void contract.

Void Contract: Section 2 (j) of the Indian Contract Act, 1872 states as follows: “A contract
which ceases to be enforceable by law becomes void when it ceases to be enforceable”. Thus, a
void contract is one which cannot be enforced by a court of law.

ii) It is an implied contract and Rohan must pay for the services of the coolie.

Implied Contracts: Implied contracts come into existence by implication. Most often the
implication is by law and or by action. Section 9 of the Indian Contract Act, 1872 contemplates
such implied contracts when it lays down that in so far as such proposal or acceptance is made
otherwise than in words, the promise is said to be implied.

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iii) Obligation of finder of lost goods to return them to the true owner cannot be said to arise
out of a contract even in its remotest sense, as there is neither offer and acceptance nor
consent. These are said to be quasi-contracts.

Quasi-Contract: A quasi-contract is not an actual contract, but it resembles a contract. It is

created by law under certain circumstances. The law creates and enforces legal rights and
obligations when no real contract exists. Such obligations are known as quasi-contracts. In other
words, it is a contract in which there is no intention on the part of either party to make a
contract, but law imposes a contract upon the parties.

01 - Miss Shakuntala puts an application to be a teacher in the school. She was appointed
by the trust of the school. Her friend who works in the same school informs her about her
appointment informally. But later due to some internal reasons her appointment was
cancelled. Can Miss Shakuntala claim for damages? ICAI Module

Ans – No, Miss Shakuntala cannot claim damages. As per Section 4, communication of acceptance
is complete as against proposer when it is put in the course of transmission to him.

In the present case, school authorities have not put any offer letter in transmission. Her
information from a third person will not form part of contract.

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