Problem Based on Contract and Solution-8

Indian Contract Act, 1872

TANMOY MUKHERJEE INSTITUTE OF JURIDICAL SCIENCE

Dr. Tanmoy Mukherjee

Advocate

 

 

Problem Based on Contract and Solution-8

Tanmoy Mukherjee

Advocate

Question-

By telephone X makes an offer to B for purchase of his Maruti car for Rs.3 lakhs. B says "I am ready to purchase the car for Rs.3 lakhs but as soon as B starts to speak, the telephone line becomes dead and due to this X fails to hear the reply. B does not say anything and claims that contract has been created. Will he succeed?

Facts-

-X makes an offer to B over the telephone to sell a car for Rs. 3 lakhs.

-B begins to say, "I am ready to purchase...". But the telephone line goes dead.

-X does not hear the acceptance.

-B remains silent afterwards and claims a valid contract was formed.

Issue-

Will B succeed?

Legal Principle-

1.Acceptance must be communicated-

Under the Indian Contract Act, 1872, communication of acceptance is essential for a valid contract [Sec. 3, Sec. 4].

In instantaneous modes of communication (Telex, fax, mobile), communication is complete only when heard by the offeror.

2. Acceptance not heard →No contract-

If the offeree speaks but the offeror does not hear due to a technical fault, there is no valid.

Reference cases-

→Entores Ltd. v. Miles Far East Corp. (1955)-

 -If acceptance is not heard due to line failure of telephone, the acceptor must repeat it.

-If the offeror does not hear it, no contract is formed.

-This principle applies to telephone contracts as well.

Application of the law to the given problem-

→B started to accept, but the telephone line became dead, so X never heard the acceptance.

→B never repeated the acceptance.

→Silence cannot amount to acceptance.

→ Therefore acceptance was never communicated to X.

 Conclusion -

-No contract was created.

-B cannot succeed, because acceptance must be actually communicated and heard by offeror in telephone conversation.