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Communication of an offer: complete when it comes to the knowledge of the person to whom it is made, i-e, when the letter containing the offer reaches the offeree. 2. Communication of an acceptance: has two aspects. Complete (a) as against the proposer, when it is put in a course of transmission to him/out of the power of the acceptor, complete (b) as against the acceptor, when it comes to the knowledge of proposer/letter of acceptance is received by proposer.

Communication of Offer, Acceptance and Revocation sec 4 &5

Example:
(i) A proposes, by letter, to sell a house to B for Rs 80,000. the letter is posted, on 6th instant. The letter reaches B on 8th instant. the communication of the offer is complete when B, the offeree receives the letter i.e., on 8th. (ii) B accepts As proposal, (in above case) by a letter sent by post on 9th instant. The letter reaches A on 11th instant. Communication of acceptance is complete; as against A, when the letter is posted, i.e. on 9th and as against B, when the letter is received by A, i-e, on 11th.

Communication of Revocation
3. Communication of a revocation: complete (a) as against the person who makes it, when it is put into the course of transmission to the person to whom it is made/out of the power of the person revoking.

Time during which an offer or acceptance can be revoked. Sec 5


1. A proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards. 2. An acceptance may be revoked at any time before the communication of the acceptance is complete as against the acceptor but not afterwards.

Effect of delay or loss of letter in postal transit.


1. Offeror is bound by the acceptance the moment, the letter of acceptance is posted, although the letter is delayed or wholly lost through an accident of the post and the letter never in fact reaches him. 2. As the acceptor is concerned, he is not bound by the letter of acceptance till it reaches the offeror. Until letter of acceptance reaches the offeror, contract remains void able at option of the acceptor.

Accidental formation of contract


If both the letter of acceptance and telegram of revocation of acceptance are delivered to the offeror at the same time. In such a situation, the formation of contract will depend on a matter of chance.

Contracts over the Telephone


1. The rule which applies to contracts negotiated orally by the parties in the physical presence of each other, the contract is complete only when the acceptance is received by the offeror also applies to contracts made over the telephone. 1. If the acceptance is not in fact communicated to the offeror because the telephone goes dead, there will be no contract.

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