Reason in Support: The Terms of The Agreement Must Be Possible For Performance

Assignment-1
i) A contract is made when a person promises to find treasure by magic
This statement is false. Such agreement could not be considered as contract.
Reason in support: The terms of the agreement must be possible for performance.
According to Section 56, “an agreement to do impossible act is void.”. Section 56 says
that any act which was to be performed after the contract is made becomes unlawful or
impossible to perform, and which the promisor could not prevent, then such an act
which becomes impossible or unlawful and will become void.
Examples: (A) agrees and promises to find treasure by magic and (B) agrees to pay
Rs 1,00,000 to (A) , one of the essential element that is possibility of performance is
missing, The object of the agreement is impossible to perform and makes the
agreement void.
So any agreement which is not enforceable would not be considered as contract.
ii) A contract is not made when a person takes seat in a public bus
This statement is false.
Reason in support: As per Section 9 of the Indian Contract Act, 1872, in this case
there is an implied offer to public at large by the transport company (offerer) to carry
passengers from one destination to another. When a person takes a seat in a public
bus, there is an implied acceptance of the offer on his part, and a valid contract
comes into existence. Both the parties transport Company and the passenger are
bound to pay consideration for each other.
iii) A void contract is enforceable at the option of one of the parties
This statement is false
A void contract is
iv) A contract is made when a person submits a bid at a public auction

From legal point of view, this statement is false.
Reason in support: At least two bidders are needed to conduct an auction though
bids need not be received from both. When the auctioneer announces prices, bidders
call out their bids. Bidders can call out bids themselves or by proxy. A bid can also be
submitted electronically with the highest current bid publicly displayed. Acceptance of
a bid is denoted by the fall of a hammer or by any other audible or visible means
signifying to a bidder that the bidder is entitled to the property on payment of the bid
price. When no participant is willing to bid further, the auction ends for that particular
property. Once a bid is accepted, the seller has no right to accept a higher bid, nor
can a buyer withdraw the buyer’s bid. Generally, an auction is complete when the bid
is accepted. A binding contract is created by the auction.
v) A contract is made when a person orally promises to pay Rs 500.
This statement is true,
Reason in support: It is an oral agreement by a person and he is bound to do the

same. Such contract is known as express contract. An express contract is an
exchange of promises in which the terms by which the parties agree to be bound are
declared either orally or in writing, or a combination of both, at the time it is made.
n oral agreement is as equally valid, as a written one. The legality, of an oral agreement, cannot be questioned, if it falls under the ambit of the requirements stated in section 10 of the Indian Contract Act,
1872.
As per the Act of 1872, a valid oral agreement is of value and can be enforced in the court of law. However, it is always difficult to prove the existence or the exact terms of the agreement, in case of dispute.
Assignment 2
i) Offer lapses by the death of the offeree before acceptance

This statement is true
Reason in Support: Yes, offer lapses by the death or insanity of offeror or the
offeree before acceptance. An offeree's death or insanity before
accepting the offer puts an end to offer and his heirs cannot accept for him.
However, if the facts show that the offeror and the offeree intend that the offer can
be accepted by the offeree’s son (or the offeree) even after the offeree’s death, the
offeree’s death does not terminate the offer.
ii) Silence can be provided as a mode of acceptance.
Failing to reply to an offer is not acceptance in most cases. This is true even if the
offer says silence will be considered acceptance. There are, however, exceptions to
this rule. If the relationship between the parties is such that it is not expected that the
offeree reply, silence by the offeree may constitute acceptance. Another exception
would be where the offeree readily understands that silence or a failure to respond
means acceptance of the offer. This generally only arises in situations where the
offeror and offeree have a history of prior dealings and the offeree has by his
previous conduct indicated that his silence amount to acceptance.
Acceptance by silence is a type of acceptance of a contract. Generally a contract
cannot be accepted by silence. However, a contract will be considered as accepted
even in case of silence in the following cases:
1. in case of past dealings of the parties;
2. in case if the offeror has waived communication by indicating that acceptance may
be made by silence or inaction;
3. if one party requests to change the terms of the contract; and
4. offer to renew an insurance policy is sent to the insured.
ii) An acceptance conveyed which changes in the terms of the offer is a

valid acceptance.
Reason in support:No, acceptance must be unconditional and absolute. There cannot

be conditional acceptance, that would amount to a counteroffer which nullifies the
original offer. Let us see an example. A offers to sell his cycle to B for 2000/-. B says he
accepts if A will sell it for 1500/-. This does not amount to the offer being accepted, it will
count as a counteroffer.
Also, it must be expressed in a prescribed manner. If no such prescribed manner is
described then it must be expressed in the normal and reasonable manner, i.e. as it
would be in the normal course of business. Implied acceptance can also be given
through some conduct, act, etc.
iii) An offer which can be made only to a specific person is a valid offer.
This statement is true
Reason in Support: An offer made to a specific person or a particular group of

persons is called a specific offer. It can be accepted only by that definite person or
that particular group of persons to whom it has been made and it indeed is a valid
offer.
iv) An offer or acceptance can be rejected at any time by both parties
Reason in Support: According to Section 5 of the Indian Contract Act, an offer or

acceptance may be revoked at any time before the communication of acceptance is
complete as against the proposer/acceptor, but not afterwards. A proposer may
revoke his offer by a speedier mode of communication which will reach before the
letter of acceptance is posted by the acceptor and an acceptor may revoke his
acceptance by a speedier mode of communication which will reach before the letter
of acceptance is received by the proposer.
An offer does not create any legal obligations, but after the offer is accepted it
becomes a promise. And a promise is irrevocable because it creates legal obligations
between parties. An offer can be revoked before it is accepted. But
once acceptance is communicated it cannot be revoked or withdrawn.

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Assignment-1

i) A contract is made when a person promises to find treasure by magic

This statement is false. Such agreement could not be considered as contract.

So any agreement which is not enforceable would not be considered as contract.

This statement is false.

iii) A void contract is enforceable at the option of one of the parties

This statement is false

iv) A contract is made when a person submits a bid at a public auction

v) A contract is made when a person orally promises to pay Rs 500.

This statement is true,

Reason in support: It is an oral agreement by a person and he is bound to do the

i) Offer lapses by the death of the offeree before acceptance

ii) Silence can be provided as a mode of acceptance.

ii) An acceptance conveyed which changes in the terms of the offer is a

This statement is false

Reason in support:No, acceptance must be unconditional and absolute. There cannot

This statement is true

Reason in Support: An offer made to a specific person or a particular group of

iv) An offer or acceptance can be rejected at any time by both parties

This statement is false

Reason in Support: According to Section 5 of the Indian Contract Act, an offer or

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