Question

Given below is a statement of legal principle followed by a factual situation. Apply the principle to the facts given below and select the most appropriate answer. 

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 If the acceptance is conditional, no valid contract is formed, and the offer can be withdrawn at any moment until the absolute acceptance has taken place within a reasonable time of such an offer.
Factual Situation: Delhi Government conducted an auction for the sale of the license of the 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, the 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 reauction 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 a reason, whether X is liable to make payment to the Delhi Government.

Options

• No, X is not liable to make payment as the shop was sold to the highest bidder. 

• X is liable to pay because the Government of Delhi has to conduct re-auction and also suffered a loss in the sale of the shop.  

• X is liable because his bid was accepted but he failed to deposit the required amount on time.

• 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. 

Answer 1

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. 

Explanation:

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. The contract for sale was uncertain and not absolute till confirmed by the Chief Commissioner. Because it was an uncertain contract, the bidder had the choice to withdraw the bid. (smt. Sohbatdei vs Devipal And Ors AIR 1971 SC 2192, (1972) 3 SCC 495, 1971 III UJ 395 SC)