Question

Apply the legal principles to the facts given below and select the most appropriate answer. 
Legal Principles:

1. Consideration is something that moves from the promisee to the promisor, at the implied or express request of the latter, in return for his promise. The item that moves can be a right, interest, profit, loss, responsibility given or suffered, forbearance, or a benefit which is of some value in the eyes of law.

2. An offer may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterward.

Factual Situation: The defendant, Mr. Dhawan, wrote to the complainant, Mr. Chaman, with an offer to sell his house to him for Rs. 8,00,000. He promised that he would keep this offer open to him until Friday. However, on a Thursday Mr. Dhawan accepted an offer from a third party and sold his house. According to Mr. Chaman, he was going to accept this offer but had not said anything to Mr. Dhawan because he understood that he had time until Friday. Mr. Dhawan communicated to Mr. Chaman that the offer had been withdrawn, through a friend to the complainant. After hearing this, Mr. Chaman went to find the defendant, informing of his acceptance of the offer. Thereafter, the complainant brought an action for specific performance and breach of contract against the defendant. Whether the defendant's promise to keep the offer open until Friday morning was a binding contract between the parties and whether he was allowed to revoke this offer and sell to a third party?

विकल्प

• The statement made by Mr. Dhawan amounts to a valid contract and he has committed a breach by selling the house before Friday.

• The statement made by Mr. Dhawan was nothing more than a promise; there was no binding contract formed. He had communicated an offer for buying his house to the complainant and this offer can be revoked any time before there is acceptance.

• The communication by a friend or other party that an offer had been withdrawn is invalid and could not be treated as if it came from the person himself.

• Promises to keep an offer open until a certain time is a binding agreement as it is accepted by the other party.

Answer 1

The statement made by Mr. Dhawan was nothing more than a promise; there was no binding contract formed. He had communicated an offer for buying his house to the complainant and this offer can be revoked any time before there is acceptance.

Points to be considered while deciding upon the presented case: (1) Offer to sell the house for ₹800000, which is not accepted hence no binding contract is entered into. Further, this offer was revoked before it was accepted. (2) Promise to keep the offer open until Friday, which was just a promise again no binding contract in the eyes of law. Thus in the light of the above-stated arguments option, The statement made by Mr. Dhawan was nothing more than a promise; there was no binding contract formed. He had communicated an offer for buying his house to the complainant and this offer can be revoked any time before there is acceptance is correct.