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An offer is accepted orally during a telephone call between parties in different cities. When is the contract concluded?

Question and options

An offer is accepted orally during a telephone call between parties in different cities. When is the contract concluded?

  1. When the offeror hears the acceptance

  2. When the offeree speaks the words of acceptance

  3. When the offeree confirms the acceptance in writing

  4. When the offeree puts down the receiver after speaking

Answer and explanation

Correct answer: A - When the offeror hears the acceptance

In Bhagwandas Goverdhandas Kedia v Girdharilal Parshottamdas (1966) the Supreme Court treated a telephone conversation as instantaneous communication, so the contract is made when and where the acceptance is heard by the offeror. The postal rule, under which acceptance can be complete against the proposer once it is put in course of transmission, does not apply to telephone conversations.

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