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Under the Indian Contract Act, 1872, on the approval of a tender for the supply of goods as and when…

Under the Indian Contract Act, 1872, as explained by the Supreme Court in Union of India v. Maddala Thathiah ([1964] 3 SCR 774), the approval of a tender to supply goods…

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Under the Indian Contract Act, 1872, on the approval of a tender for the supply of goods as and when required:

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Correct answer D

Under the Indian Contract Act, 1872, as explained by the Supreme Court in Union of India v. Maddala Thathiah ([1964] 3 SCR 774), the approval of a tender to supply goods over a period 'as and when required' does not by itself create an immediate binding contract for the whole quantity; instead, the approved tender is converted into a standing (continuing) offer, and a concluded contract comes into existence only when, and to the extent that, an actual order is placed on the basis of the tender.

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Option A

Approval alone does not bind the parties to the entire estimated quantity. An order creates a binding contract only for the quantity ordered.

Option B

Incorrect. Approval of such a tender first converts the tender into a standing (continuing) offer, which is accepted pro tanto each time an actual order is placed.

Option C

Incorrect. While approval of the tender converts it into a standing offer, placing a specific order on the basis of the tender constitutes acceptance to that extent and creates a concluded contract for that order.

Option D

In Union of India v. Maddala Thathiah, the Supreme Court explained that a tender on these terms operates as a standing offer. A specific order accepts the offer to the extent of the quantity ordered.

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