‘A’ despatches the letter of acceptance to B, which B does not receive. When A sues B for enforcement of the contract, B contends that there is no contract with A. Decide.

Question: ‘A’ despatches the letter of acceptance to B, which B does not receive. When A sues B for enforcement of the contract, B contends that there is no contract with A. Decide. [UPJS 1999]

Find the answer to the mains question of the Law of Contract only on Legal Bites. [‘A’ despatches the letter of acceptance to B, which B does not receive. When A sues B for enforcement of the contract, B contends that there is no contract with A. Decide.]

Answer

According to Section 4 of the Indian Contract Act, 1872, the communication of an acceptance is complete,— 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; as against the acceptor, when it comes to the knowledge of the proposer.

In this scenario, A is the offeror, and B is the offeree. The key issue at hand is whether a valid contract exists between A and B, given that A's acceptance letter was dispatched but allegedly not received by B.

According to the provisions of the Contract Act, the formation of a contract requires an offer, acceptance, consideration, intention to create legal relations and free consent of the parties involved. In this case, A's offer was made when they dispatched the letter of acceptance to B.

The crucial question is whether the acceptance of the offer was properly communicated to A. The general rule for the communication of acceptance is that it must be communicated directly to the offeror. However, there are certain exceptions to this rule, and one of them is the "postal rule."

The postal rule states that if the acceptance is sent through the post (mail), it is considered effective as soon as it is dispatched. This means that the contract is formed when the acceptance letter is posted, not when it is received by the offeror. However, for the postal rule to apply, it must be reasonable for the parties to use the post as a means of communication.

In this case, A dispatched the acceptance letter through the usual and reasonable means of communication, such as the postal service. Hence, as per the postal rule, the contract would be considered formed at the moment A posted the letter of acceptance.

Since A fulfilled their part of the contract by dispatching the acceptance letter and forming a valid contract, the burden of proof now shifts to B to show that they did not receive the letter. B's claim that they did not receive the acceptance letter must be supported with credible evidence to be considered.

If B can provide sufficient evidence to show that the acceptance letter was lost or not delivered properly, they may be able to contest the contract's enforcement. However, the evidence of non-receipt should be strong enough to rebut the presumption created by the postal rule.

In conclusion, if A can establish that they dispatched the acceptance letter using reasonable means of communication, the contract would be deemed valid under the postal rule.