Legal Principle: The acceptance must be absolute and unqualified, leaving no ground for doubt or uncertainty. If the acceptance is conditional, no valid contract is formed, and the offer can be withdrawn at any moment till the absolute acceptancehas taken place within reasonable time of such offer. Factual Situation: Delhi Government conducted an auction for the sale of license of wine shop. X offered the highest bid which was provisionally accepted “...subject to the confirmation of Chief Commissioner who may reject any bid without assigning any reasons.” Since X failed to deposit the required amount, Chief Commissioner rejected the bid. The government held X liable for the difference between the bid offered by him and the highest bid accepted in re-auction, and commenced proceedings for the recovery of the sum. It was contended on behalf of the government of Delhi that X was under a legal obligation to pay the difference as it was due to his default that a resale of the excise shop was ordered and hence X was liable for the deficiency in price and all expenses of such resale which was caused by his default. Decide, giving reason, whether X is liable to make payment to the Delhi Government.

Question

Legal Principle: The acceptance must be absolute and unqualified, leaving no ground for doubt or uncertainty. If the acceptance is conditional, no valid contract is formed, and the offer can be withdrawn at any moment till the absolute acceptancehas taken place within reasonable time of such offer.  Factual Situation: Delhi Government conducted an auction for the sale of license of wine shop. X offered the highest bid which was provisionally accepted “...subject to the confirmation of Chief Commissioner who may reject any bid without assigning any reasons.” Since X failed to deposit the required amount, Chief Commissioner rejected the bid. The government held X liable for the difference between the bid offered by him and the highest bid accepted in re-auction, and commenced proceedings for the recovery of the sum. It was contended on behalf of the government of Delhi that X was under a legal obligation to pay the difference as it was due to his default that a resale of the excise shop was ordered and hence X was liable for the deficiency in price and all expenses of such resale which was caused by his default.  Decide, giving reason, whether X is liable to make payment to the Delhi Government.

Examsnet · Accepted Answer

Correct Answer is : No, contract for sale was not complete till the bid was confirmed by the Chief Commissioner and till such confirmation ; the bidder was entitled to withdraw the bid.

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