COMMUNICATION WHEN COMPLETE
‘A’ despatch the letter of acceptance to ‘B’ which ‘B’ does not receive. When ‘A’ sues ‘B’ for enforcement of contract, ‘B’ contends that there is no contract with ‘A’. Decide.
The main issue which is involved in the present case is whether the contract has been concluded between the parties and B is bound to perform his contractual obligation?
Every contract is based upon mutual trust and confidence and every party to contract gives his consent on a belief that every party to a contract will perform his contractual obligations.
According to the provisions of Indian Contract Act, 1872, if parties want to enter into a lawful contract, then they will have to fulfil all the conditions which have been prescribed by this act.
According to section 4 of the Indian Contract Act, 1872, if any person makes an offer through a letter and another person also communicates the acceptance through letter, then in such a case, whenever an acceptor puts the letter of acceptance in the course of transmission, the offeror becomes bound because after putting the letter of acceptance in the course of transmission, the acceptor lost all his control over it and according to this section, whenever the letter of acceptance comes into the knowledge of offeror, the acceptor becomes bound and a lawful contract is concluded between the parties.
In the leading case of J.K. Enterprises Ltd. vs. State of M.P., the Hon’ble court held that offeror becomes bound whenever the letter of acceptance is put into the course of transmission by the acceptor. Even if the letter of acceptance is lost in the course of transmission and does not reach to the offeror, then also offeror becomes bound from that very moment when the letter is put into the course of transmission and the contract is concluded.
In the present case, when ‘A’ despatched the letter, ‘B’ became bound and contract was concluded between them even if ‘B’ did not receive the letter of acceptance. Hence, it can be said that a valid and lawful contract has been concluded between the parties and both the parties are bound to perform their contractual obligations.