When is Communication of Acceptance Complete
Section 4 of the Indian Contract Act talks about ‘Communication When Complete’
âA âproposes by letter, to sell a house to âBâ at a certain price. B accepts Aâs proposal by a letter sent by post. The communication of acceptance is complete as against âAâ when the letter is posted, as against âBâ when the letter is received by âA.â
Thus when a letter of acceptance is posted, the proposer becomes bound, but acceptor will be bound only when the letter is received by the proposer.
A complete contract arises on the date when the letter of acceptance is posted, and the contract is deemed to have been made at the place where the letter of acceptance is posted.
Bhagwandas Goverdhandas Kedia vs. Girdharilal Parshottamdas, 1966
In this case, the Honâble Supreme Court made clear the confusion about the completion of contract by telephone or telex. The majority of judges held that the communication on telephone or telex is like an exception of section 4 and held where a contract is made by telephone, the contract is complete only when acceptance is received by offer. The contract is made at a place where acceptance is received, it means at the place of the offerer.