Source: RTP,Dec20185 Marks
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Question Scenario

Ramaswami proposed to sell his house to Ramanathan. Ramanathan sent his acceptance by post. Next day, Ramanathan sends a telegram withdrawing his acceptance. Examine the validity of the acceptance according to the Indian Contract Act, 1872 in the light of the following:

a) The telegram of revocation of acceptance was received by Ramaswami before the letter of acceptance.

b) The telegram of revocation and letter of acceptance both reached together.

Estimated Writing Time: 9 mins Try in Practice Mode

Suggested Answer

1. Provisions of the Act / Applicable Law

The problem is related with the communication and time of acceptance and its revocation. As per Section 4 of the Indian Contract Act, 1872, the communication of an acceptance is complete as against the acceptor when it comes to the knowledge of the proposer. An acceptance may be revoked at any time before the communication of the acceptance is complete as against the acceptor, but not afterwards.

Referring to the above provisions:

b) If Ramaswami opens the telegram first (and this would be normally so in case of a rational person) and reads it, the acceptance stands revoked. If he opens the letter first and reads it, revocation of acceptance is not possible as the contract has already been concluded.

2. Analysis & Application of Facts

a) Yes, the revocation of acceptance by Ramanathan (the acceptor) is valid.

Exam Strategy Tip

When answering law questions in the CA Foundation exam, follow the "Provision -> Facts -> Conclusion" structure for maximum marks. Ensure to state the relevant sections where applicable to earn bonus marks from the evaluator.

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