CAF 4: Business Laws

Suggested Solution – Test # 1

Q.1
MCQ # Correct Option
(i) c
(ii) b
(iii) d
(iv) b

Q.2
(a)
A proposal cannot be revoked after acceptance by offeree.

Acceptance is communicated as against offeror when it is put in the course of transmission so as to be out of power of acceptor.

(b)
Relevant legal Provision:
Offeror can revoke his offer before acceptance, even if he promised to keep it open for a certain period.

Decision and Basis of Decision:

Claim of A is correct i.e. offer has been withdrawn before acceptance and there is no binding contract.
Offeror can revoke his offer anytime before acceptance, even if before expiry of period mentioned in offer.
However, if period was allowed against some consideration, then offer cannot be revoked before its expiry.

Q.3
Relevant legal Provision:
Offeror can revoke his offer by notifying other party before his acceptance.
Acceptor can revoke his acceptance by notifying other party before it reaches him.

Decision and Basis of Decision:

In this case:
 Offer is communicated to Babar on 5th April.
 Acceptance is communicated as against Ahmed on 7th April (when Babar posted letter).
 Acceptance is communicated as Babar Ahmed on 11th April (when letter reached Ahmed).

(i) Revocation of offer reached Babar on 10th April, however, contract was completed as against Ahmed on 7th April. Therefore,
this letter of revocation has no effect on validity of contract.

(ii) Revocation of acceptance reached Ahmed on 10th April, as acceptance was not yet communicated as against Babar, therefore
this revocation of acceptance is valid there is no contract between parties.

Q.4
Relevant Legal Provision:
if there are alternate promises and one of them is illegal, only the legal one can be enforced.

Decision and Basis of Decision:

This agreement is valid. However, BT is liable to provide only imported rice cookers. Promise to provide smuggled rice cooker is
void, being illegal.

Q.5
(a)
Decision and Basis of Decision:
Y is bound to pay because he has accepted X's implied offer by conduct (i.e. by not stopping X from polishing the shoes).
(b)
Decision and Basis of Decision:
Any terms and conditions of offer must be communicated at time of agreement. Here, the owner of the hotel was liable because these terms
were communicated after the contract.

(THE END)

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