Legal Principle : A contract requires a proposal and an acceptance of the proposal. It is necessary to make a binding contract, not only that the pro¬posal be accepted, but also that the acceptance is notified to the proposer. Factual Situation : Diu offered to purchase a home owned by Pawan for 20,00,000. He wrote to Pawan's agent ask¬ing whether his offer was accepted. He also added that he was ready to accept any higher price if found reasonable. The agent of pawan Shyam sunder replied, 'would not accept less than 30,00,000'. Diu accepted this and brought a suit in a local court for specific performance. Issue : Is Pawan liable for specific performance? Decision:

Pawan is liable for the specific performance of the contract entered into Diu and Pawan.

Legal Principle : A contract requires a proposal and an acceptance of

1.	Legal Principle : A contract requires a proposal and an acceptance of the proposal. It is necessary to make a binding contract, not only that the pro¬posal be accepted, but also that the acceptance is notified to the proposer. Factual Situation : Diu offered to purchase a home owned by Pawan for 20,00,000. He wrote to Pawan's agent ask¬ing whether his offer was accepted. He also added that he was ready to accept any higher price if found reasonable. The agent of pawan Shyam sunder replied, 'would not accept less than 30,00,000'. Diu accepted this and brought a suit in a local court for specific performance. Issue : Is Pawan liable for specific performance? Decision:
A.	Pawan is liable for the specific performance of the contract entered into Diu and Pawan.
B.	Pawan is not liable.
C.	The contract is void ab intio.
D.	The contract is voidable.
Answer» C. The contract is void ab intio.

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