Applying the principle, is the bookstore bound to sell the book for Rs. 50?

Yes, because a displayed price tag is a binding offer that the customer has validly accepted.

Yes, because once a customer tenders any amount, a contract is automatically formed regardless of the marked price.

No, because contracts for books require a written agreement under the Indian Contract Act.

Can Riya claim the reward?

Yes, because performing the act stipulated in a general offer always entitles the performer to the reward regardless of knowledge.

Yes, because the advertisement created a contract with the entire world the moment it was published.

No, because general offers are invitations to offer and cannot be accepted by conduct.

Is Karan bound by his bid of Rs. 2 lakh?

Yes, because a bid in an auction is irrevocable once announced aloud.

Yes, because the auctioneer's invitation to bid was itself an offer that Karan accepted by bidding.

No, because auctions of furniture do not create legally enforceable contracts under Indian law.

Is there a binding contract between Ahmed and Beena?

No, because Ahmed revoked the offer before Beena's acceptance reached him.

No, because an offer sent by post can never be validly accepted by post.

Yes, because revocation of an offer is only effective if it is communicated before the offer itself is made.

Is the exporter bound to sell at Rs. 400 per shirt based on the buyer's second letter?

Yes, because the original offer of Rs. 400 remained open until expressly withdrawn by the exporter.

Yes, because silence by the exporter to the counter-offer amounted to acceptance of Rs. 350, which the buyer could later waive.

No, because offers for the sale of goods above a certain value must be in a single signed document.

Can Farah claim the bonus?

Yes, because completing the stipulated act is sufficient regardless of whether the offer was received.

Yes, because internal company memos are automatically binding on all employees whether or not received.

No, because bonuses can never form the subject matter of a valid contract.

Is a contract formed between Nikhil and Om?

Yes, because the identical terms in both letters automatically create a binding contract.

Yes, because whichever letter is received first is deemed the offer and the other is deemed its acceptance.

No, because oral negotiation is mandatory before any contract for the sale of a vehicle.

Is there a valid contract?

Yes, because offers for the sale of raw materials remain open indefinitely unless expressly revoked.

Yes, because the manufacturer's acceptance related back to the original date of the offer.

No, because offers with a time limit are void from the outset under the Indian Contract Act.

Is the supplier bound to fulfil a third order placed after this notice?

Yes, because acceptance of the tender created one single contract covering the entire year that cannot be revoked mid-term.

No, because standing offers are always invitations to offer and create no binding obligations even for orders already fulfilled.

Yes, because once a tender is accepted, every future order is automatically binding regardless of any revocation notice.

Was the seller entitled to cancel the order?

No, because listing a product online is always a binding offer that is accepted the moment a customer places an order.

No, because once payment is processed by the customer, the seller loses all right to cancel regardless of any error.

Yes, because contracts formed over the internet are unenforceable under Indian law.

Legal Reasoning · Micro-Test

Offer and Acceptance in Contract Law

Every contract begins with a proposal that someone accepts, but CLAT loves to test the fine line between a genuine offer and a mere invitation to negotiate.

10 questions · 5 minutes · instant scoring

What this topic actually tests

Section 2(a) of the Indian Contract Act, 1872 defines a proposal (offer) as an act by which a person signifies to another their willingness to do or abstain from doing something, with a view to obtaining that other person's assent. Once the person to whom the proposal is made signifies assent, the proposal becomes a promise under Section 2(b) - this is acceptance. For a binding agreement, the offer must be communicated (Section 4), and acceptance must be absolute and unqualified, mirroring the exact terms of the offer (Section 7). A crucial threshold issue is distinguishing an offer from an invitation to offer (invitation to treat). Shop displays with price tags, advertisements, tenders, auction notices, and price lists are generally invitations to offer - the shopkeeper or advertiser is inviting customers to make offers, which the seller may accept or reject. The classic exception is a general offer made to the world at large, such as a reward for a lost item or a company's promise to pay anyone who uses its product as directed and still suffers harm; such an offer can be accepted by performance without prior communication of acceptance, since performance itself signals assent. Revocation of a proposal is possible at any time before the communication of its acceptance is complete as against the proposer (Section 5). A counter-offer - for instance, responding to a price with a different price - operates as a rejection of the original offer and cannot later be accepted on the original terms. CLAT typically frames this topic as a principle-based passage: a rule about offer or acceptance is stated, followed by a fact pattern (a shop display, an advertisement, a negotiation) that the candidate must apply, often turning on whether the facts show an offer, an invitation to offer, or a valid acceptance.

The common trap on this topic

The single most common error is treating every advertisement, shop window display, tender notice, or price catalogue as an 'offer' simply because a price is mentioned. In fact, under Indian contract law these are ordinarily invitations to offer - the customer who picks up the item and takes it to the counter is the one making the offer, which the shopkeeper is free to accept or refuse, even if the tag shows the 'wrong' price. Aspirants also confuse a counter-offer with a conditional or qualified acceptance; both destroy the original offer, but students often assume the original offer remains open for later acceptance after a counter-offer has been made, which is incorrect - once rejected by a counter-offer, the original offer cannot be revived by simply agreeing to the original terms later unless the offeror renews it. A third trap is misreading the timing rules for communication: an offer is complete when it comes to the knowledge of the offeree, while acceptance is complete against the proposer when it is put into a course of transmission (e.g., posted) but complete against the acceptor only when it reaches the proposer - so a revocation of acceptance is theoretically possible before it reaches the proposer, but a revocation of the offer itself must reach the offeree before acceptance is posted.

FAQ

Is a newspaper advertisement for a sale an offer or an invitation to offer?

It is ordinarily an invitation to offer, not an offer. The advertiser is inviting members of the public to make offers to buy, which the advertiser may then accept or decline, unless the advertisement is a genuine general offer promising a specific reward for a specific act, such as returning a lost item.

Can an offer be accepted by simply performing the condition mentioned in it?

Yes, for a general offer made to the world at large, performance of the stipulated act amounts to valid acceptance and no separate communication of acceptance to the offeror is required, since the offeror has impliedly waived that requirement.

What happens if the offeree makes a counter-offer instead of accepting?

A counter-offer operates as a rejection of the original offer under Section 7's requirement that acceptance be absolute and unqualified. The original offer lapses, and the parties are now negotiating on the terms of the counter-offer, which the original offeror is free to accept or reject.

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