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CMA Foundation · Fundamentals of Business Laws and Business Communication · Legal Aspects of Business Communication

Mehta Traders emails a customer: 'We offer 200 units of item X at Rs 50 per unit; reply by Friday.' The customer replies on Thursday, 'Accepted.' Legally, what is the likely effect?

A binding agreement may arise. The email gave definite terms and a time limit, so it was an offer, and the customer's unconditional acceptance before the deadline completed it. Electronic communication is legally recognised for forming contracts, and no stamped paper is needed for such an ordinary sale.

  1. ANo effect, since emails cannot form contracts
  2. BA binding agreement may arise, as a valid offer was accepted by electronic communicationCorrect
  3. COnly a mere invitation to offer was made, so the customer made the offer
  4. DThe contract is void because it was not on stamped paper

Explanation

The email states definite terms and shows intention to be bound, so it is an offer. Unconditional acceptance within the time given concludes the agreement. Electronic records are legally recognised, so option about emails not forming contracts is wrong.

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