When the contracting parties are face to face and negotiate in person, there is instantaneous communication of offer and acceptance, and a valid contract comes into existence the moment the offeree gives his absolute and unqualified acceptance to the proposal made by the offeror.
The question of revocation of either offer or acceptance does not arise, for, in such cases a definite offer is made and accepted instantly at one and the same time.
But where services of the post office are utilised for communicating among themselves by the contracting parties because they are at a distance from one another, it is not always easy to ascertain the exact time at which an offer or/and an acceptance is made or revoked. In these cases the following rules, as laid down in Sections 4 and 5, will be applicable:
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ADVERTISEMENTS:
1. Communication of an offer:
The communication of an offer is 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:
ADVERTISEMENTS:
The communication of an acceptance has two aspects, viz., as against the proposer and as against the acceptor. The communication of an acceptance is complete (a) as against the proposer, when it is put in a course of transmission to him, so as to be out of power of the acceptor, and (b) as against the acceptor, when it comes to the knowledge of the proposer i.e., when the letter of acceptance is received by the proposer.
Illustrations:
(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 A’s proposal, in the above case, by a letter sent by post on 9th instant. The letter reaches A on 11th instant. The communication of the 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.
ADVERTISEMENTS:
3. Communication of a revocation:
The communication of a revocation is complete: (a) as against the person who makes it, when it is put into a course of transmission to the person to whom it is made, so as to be out of the power of the person revoking, i.e., when the letter of revocation is posted, and (b) as against the person to whom it is made, when it comes to his knowledge, i.e., when the letter of revocation is received by him.
Illustrations:
(a) In the illustration (i) given above, A revokes his offer by letter on 8th instant. The letter reaches B on 10th instant. The revocation is complete as against on 8th, when the letter of revocation is posted. It is complete as against B on 10th, when the letter of revocation is received by him.
(b) In the illustration (ii) given above, B revokes his acceptance by letter on 10th instant. The letter reaches on 12th instant. The revocation is complete as against B on 10th, the date on which the letter of revocation is posted and as against A on 12th, the date on which the letter reaches him.