Agreements without consideration for CLAT - Practice Questions & MCQ

Proposal (Offer):

• A proposal, also known as an offer, is the initial step in the formation of a contract.
• It is a clear and definite promise or commitment made by one party (the offeror) to do or refrain from doing something in exchange for something of value (consideration) from another party (the offeree).

Acceptance:

• Acceptance is the unambiguous and unconditional agreement by the offeree to the terms and conditions presented in the offer.
• The acceptance must be communicated to the offeror in the prescribed manner or as specified in the offer itself.

Revocation of Proposal:

• The offeror has the right to revoke or withdraw their offer at any time before it is accepted, provided that the revocation is effectively communicated to the offeree.

Elaboration with Examples:

• Revocation of Proposal:
• Imagine Priya offers to sell her smartphone to Ramesh for Rs. 15,000 and communicates this offer.
• Priya can change her mind and withdraw the offer before Ramesh accepts it.
• However, if Ramesh accepts the offer before receiving the revocation, a legally binding contract is formed.

Case Law Example - Shreya v. Arjun (2019):

• Arjun sends a written offer to Shreya, proposing to sell his vintage car for Rs. 5,00,000.
• Later, Arjun sends a revocation letter by email, but Shreya never receives it.
• Shreya sends an acceptance letter by post, which Arjun receives.
• The court rules in favor of Shreya, stating that the acceptance is valid because the revocation was not effectively communicated.

Mode of Communication:

• The mode of communication for revoking an offer is critical. It should align with the mode used to make the offer. If the offer was made through a specific method (e.g., email or postal mail), the revocation must also be conveyed through the same method.

Exceptions to Revocation:

While an offer is generally revocable, some exceptions exist, including:

• Option Contracts: When the offeree provides consideration (usually a fee) to the offeror to keep the offer open for a specified period. During this time, the offeror cannot revoke the offer.
• Unilateral Contracts: Offers that require the offeree to perform an action, and the offeror must wait for the offeree's performance before revoking.

Indian Case Law Examples:

• Yogendra Kumar v. National Cooperative Development Corporation (AIR 2009 SC 635):
  • In this case, an offer was revoked by the offeror through a telegram. However, the offeree had already dispatched an acceptance letter by post before receiving the revocation.
  • The Supreme Court held that the acceptance was valid because it was sent before the offeree received the revocation.
• Daulat Ram v. State of Haryana (AIR 2005 SC 485):
  • Here, the offeror revoked the offer by telephone, but the offeree had already sent a letter of acceptance by post.
  • The Supreme Court held that the acceptance was valid because it was posted before the revocation was received.