A accepts the proposal of B by a letter and puts it in post. But the letter is lost in post transit. Whether acceptance is communicated? [HJS 1984]

Question: A accepts the proposal of B by a letter and puts it in a post. But the letter is lost in post transit. Whether acceptance is communicated? [HJS 1984]

Find the answer to the mains question only on Legal Bites. [A accepts the proposal of B by a letter and puts it in post. But the letter is lost in post transit. Whether acceptance is communicated?]

Answer

There is no concluded contract as the communication of acceptance by A has not come to the knowledge of proposer B.

According to Section 4 of the Indian Contract Act, 1872 the communication of an acceptance is complete:

1. As against the proposer, when it is put in a course of transmission to him so as to be out of the power of the acceptor;
2. As against the acceptor, when it comes to the knowledge of the proposer.

For example, B accepts A’s proposal by a letter sent by post.” The communication of the acceptance is complete, as against A when the letter is posted; and as against B, when the letter is received by A.

Since in the present case at hand, the letter is lost in transit, and could not reach proposer A, then against B the communication of acceptance is said to have not been completed because the letter never reached A.

Lord Bramwell in the case of British & American Telegraph Co v. Colson, (1871) LR 6 Exch 108, ruled that the defendant was held to be not bound by a letter of acceptance which was lost in the course of post.

Thus, going by the provisions of Section 4 of the act, when a letter of acceptance is posted and is out of the power of the acceptor, the proposer becomes bound. But the acceptor will become bound only when the letter is received by the proposer.

Difference between English and Indian laws:

The only difference that the section makes is in the position of the acceptor. In England when a letter of acceptance is posted, both the offeror and the acceptor become irrevocably bound. But in India, the acceptor does not become bound by merely posting his acceptance. He becomes bound only when his acceptance “comes to the knowledge of the proposer”. The gap of time between, the posting and the delivery of the acceptance can be utilized by the acceptor for revoking his: acceptance by a speedier communication which will overtake the acceptance.

The peculiarity of this rule is that after an acceptance is posted and before it comes to the knowledge of the offeror, only one party, that is, the offeror, is bound. The acceptor still has the right to recede from the contract by revoking his acceptance. A contract, on the other hand, means an agreement that binds both parties to it.

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Law of Contract Mains Questions Series: Important Questions for Judiciary, APO & University Exams

1. Law of Contract Mains Questions Series Part-I
2. Law of Contract Mains Questions Series Part-II
3. Law of Contract Mains Questions Series Part-III
4. Law of Contract Mains Questions Series Part-IV
5. Law of Contract Mains Questions Series Part-V
6. Law of Contract Mains Questions Series Part-VI
7. Law of Contract Mains Questions Series Part-VII
8. Law of Contract Mains Questions Series Part-VIII
9. Law of Contract Mains Questions Series Part-IX
10. Law of Contract Mains Questions Series Part-X