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CMA Foundation · Fundamentals of Business Laws and Business Communication · Essential Elements of a Contract, Offer and Acceptance

Mishra posts a letter accepting Nair's proposal at 10 am. At 11 am Mishra sends a telegram revoking the acceptance. Nair receives the letter at 2 pm and the telegram at 4 pm. Which statement is correct under the Act?

The acceptance cannot be revoked. Acceptance can be revoked only up to the moment the acceptance letter reaches the proposer. Since the letter reached Nair at 2 pm and the telegram only at 4 pm, the revocation came too late and the contract stands.

  1. AThe acceptance is validly revoked because the telegram reached Nair after the letter
  2. BThe acceptance is validly revoked because the telegram was sent after the letter was posted
  3. CThe acceptance is validly revoked because the telegram reached before Nair replied
  4. DThe acceptance cannot be revoked because the telegram reached Nair after the letter didCorrect

Explanation

Under Section 5, an acceptance may be revoked only before or at the moment its communication is complete as against the acceptor, which is when the letter reaches Nair, here 2 pm. The telegram arrived at 4 pm, so it is too late. Option A is wrong because it reverses this order, and the posting time is irrelevant to revocation.

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