Principle An offer made by one party when accepted by another makes it a contract Transactions P off...........

Indian Contract Act (ICA)1872 Formation of Contract

Principle: An offer made by one party when accepted by another makes it a contract.

Transactions: P offered to sell his house for Rs. 20 lakhs to R; R told P that he was interested to buy a house for 15 lakhs only.

2. C was looking for a house for not more than 25 lakhs; P informed C that his house was available for 20 lakhs.

3. K wanted to buy some old furniture; L told K that he would sell his furniture for Rs. 10, 000.

4. R advertised to sell his old car for a price of Rs. Three lakhs; S found the advertisement and offered to buy it for Rs. 2 lakhs 50 thousand; R agrees to sell it to S.

Which among the above is actually a contract?

Situations 1 and 2 are contracts

Situation 4 only is a contract

Situation 3 only is a contract

Situations 2 and 4 are contracts

Explanation:

Situation 1- P makes an offer and R makes a counter offer instead of accepting P’s offer.
Situation 2- C mere ly discloses information and it can’t be equated with an offer.
Situation 3- L tells K that he would be interested in selling the furniture. However there is no acceptance of the same.
Situation 4- R and S agr ee upon the same thing in the same manner. Hence the contract is complete as per the legal principle.