244 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES
Three questions arise :
(i) Does the exercise of the option effect a conversion ?
(ii) Does it effect a conversion even if the option is exercised after the death of the Lessor?
(iii) From what date does such conversion begin to operate ?
(i) Does the exercise of the option effect a conversion ?
In law, the option given is an offer to sell. The exercise of the option is an acceptance of the offer and when there is an acceptance of the offer, there is a contract. The exercise of the option by resulting in a contract effects a conversion. The answer to the first question is therefore in the affirmative.
(ii) Exercise of the option before the death of the Lessee and after the death of the Lessor.
If the Lessee exercises his option before the death of the Lessor, i.e., while he is alive, then there is conversion, because the offer conveyed by the option can be legally accepted and a binding contract can arise.
If the lessee exercises the option after the death, then, on principle, there ought not to be conversion, because there cannot be a contract. An offer cannot be accepted after the person, who make the offer, is dead.
But in Lawes vs. Benett (1785) 1 Cax 167, it was held that the exercise of the option, even after the lessor’s death, is good for the purposes of conversion.
- The rule in Lawes vs. Benett being anomalous, is confined in its operation. It is applied as between persons claiming under the lessor. But it is not made applicable as between lessor and lessee.
Illus. A leased certain property to B with an option to purchase. The premises were insured. They are destroyed by fire before the option is exercised by B. B, on exercising the option, cannot claim the insurance money as part of his purchase. That is claim as between A and B (1878) 7 Ch. D. 858, 10 Ch. D. App. 386.