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CA Foundation · Business Laws · The Indian Contract Act, 1872

Anil offers by letter to sell his old laptop to Bhavna for Rs 20,000. Before Bhavna replies, Anil's offer is withdrawn by him and the letter of revocation reaches Bhavna after she has posted her acceptance. What is the legal position?

A contract is concluded. A proposal may be revoked only before the proposer's acceptance is complete against him, which happens when the acceptance letter is posted. Bhavna posted hers before Anil's revocation reached her, so the revocation was too late and the contract stands.

  1. AThe revocation is effective because Anil sent it before the acceptance reached him
  2. BThe contract is concluded because the revocation reached Bhavna after she posted her acceptanceCorrect
  3. CNo contract arises because Anil's offer was revoked at the time of dispatch of his letter
  4. DNo contract arises because acceptance must be communicated by word of mouth

Explanation

An offer can be revoked only before the acceptance is complete as against the proposer. Acceptance by post is complete against the proposer when the letter is posted. Bhavna posted her acceptance before the revocation reached her, so the revocation came too late. Option A ignores that acceptance is complete against the proposer on posting.

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