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If the Letter (Communication) of Acceptance does not reach the Proposer even though it was properly posted. Will it make both the parties of Contract Binding?(both Proposer and Acceptor)?
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If the Letter (Communication) of Acceptance does not reach the Propose...
Effect of Non-receipt of Letter of Acceptance on Contract Binding
- According to the Indian Contract Act, 1872, communication of acceptance is complete as against the acceptor when it comes to the knowledge of the proposer. Therefore, the acceptance must be properly communicated to the proposer in order to form a binding contract.
- If the letter of acceptance does not reach the proposer even though it was properly posted, it raises the question of whether a contract is binding between the parties.
Postal Rule
- The general rule is that acceptance takes effect when it is communicated to the proposer. However, an exception to this rule is the postal rule, which applies when acceptance is sent by post.
- According to the postal rule, acceptance is deemed to be communicated as soon as it is posted. This means that once the letter of acceptance is posted, it is considered to have been communicated to the proposer, even if it never reaches them.
- However, the postal rule is not applicable in situations where it is expressly or impliedly excluded by the parties, or where it is inconsistent with the terms of the offer.
Effect on Contract Binding
- If the letter of acceptance was properly posted but does not reach the proposer, the contract will still be binding on both parties.
- This is because the postal rule deems acceptance to have been communicated upon posting, regardless of whether it is actually received by the proposer.
- Therefore, the proposer cannot argue that they did not receive the acceptance and attempt to avoid the contract.
- On the other hand, if the letter of acceptance was not properly posted or if the postal rule is expressly excluded by the parties, the contract will not be binding unless and until the acceptance is actually received by the proposer.
Conclusion
- In general, if the letter of acceptance is properly posted, it is deemed to have been communicated to the proposer and the contract becomes binding on both parties.
- However, if the postal rule is expressly excluded or if the acceptance is not properly posted, the contract will not be binding unless and until the acceptance is actually received by the proposer.
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If the Letter (Communication) of Acceptance does not reach the Proposer even though it was properly posted. Will it make both the parties of Contract Binding?(both Proposer and Acceptor)?
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If the Letter (Communication) of Acceptance does not reach the Proposer even though it was properly posted. Will it make both the parties of Contract Binding?(both Proposer and Acceptor)? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about If the Letter (Communication) of Acceptance does not reach the Proposer even though it was properly posted. Will it make both the parties of Contract Binding?(both Proposer and Acceptor)? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for If the Letter (Communication) of Acceptance does not reach the Proposer even though it was properly posted. Will it make both the parties of Contract Binding?(both Proposer and Acceptor)?.
If the Letter (Communication) of Acceptance does not reach the Proposer even though it was properly posted. Will it make both the parties of Contract Binding?(both Proposer and Acceptor)? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about If the Letter (Communication) of Acceptance does not reach the Proposer even though it was properly posted. Will it make both the parties of Contract Binding?(both Proposer and Acceptor)? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for If the Letter (Communication) of Acceptance does not reach the Proposer even though it was properly posted. Will it make both the parties of Contract Binding?(both Proposer and Acceptor)?.
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