2nd Moot
2nd Moot
IN THE MATTER OF
V.
TABLE OF CONTENTS
TABLE OF CONTENTS II
INDEX OF AUTHORITIES IV
STATEMENT OF JURISDICTION VI
ISSUES RAISED IX
SUMMARY OF ARGUMENTS IX
ARGUMENTS ADVANCED 1
PRAYER 11
2
MEMORIAL ON BEHALF OF APPELLANT
Class Moot Court
LIST OF ABBREVIATIONS
§ Section
& And
Anr. Another
Art. Article
Bom Bombay
Ed. Edition
No. Number
Ors. Others
SC Supreme Court
Supp Supplementary
v. Versus
Vol. Volume
INDEX OF AUTHORITIES
III
MEMORIAL ON BEHALF OF THE APPELLANT
Class Moot Court
BOOKS:
WEBSITES:
1. http://www.findlaw.com
2. http://www.manupatra.co.in/AdvancedLegalSearch.aspx
3. http://www.scconline.com
4. http://www.indiakanoon.com
5. http://www.lega1services.com
6. http://www.advocatekhoj.com
STATUES:
TABLE OF CASES
IV
MEMORIAL ON BEHALF OF THE APPELLANT
Class Moot Court
4 Ram Das Chakrabarti v. Cotton Ginning Co. Ltd ILR (1887) 9 All 366 case
6 Bhagwandas Goverdhandas Kedia v M/S. Girdharilal 1966 AIR 543, 1966 SCR
V
MEMORIAL ON BEHALF OF THE APPELLANT
Class Moot Court
SUMMARY OF FACTS
BACKGROUND:
At 10.00 a.m. on Monday, June 5th, Mr. Utkarsh the managing director of
Toffscars Ltd., sent a telex to Mr. Raman, a regular customer, offering to
sell him a rare vintage car for 50,000 Euros.
Mr. Utkarsh is late arriving at work that day and fails to notice the telex.
During the day he receives another offer of 60,000 Euros for the car from
Mr. Sandeep.
Mr. Utkarsh refuses to sell the car to Mr. Raman, who is now suing him
for breach of contract.
VI
MEMORIAL ON BEHALF OF THE APPELLANT
Class Moot Court
ARGUMENTS ADVANCED
It is humbly submitted before the Hon’ble Court that the acceptance communicated by
the plaintiff was not valid as per the Indian Contract Act, 1872. As per Section 2(b) of the
Indian Contract Act1 when the person to whom the proposal is made signifies his assent
thereto, the proposal is said to be accepted and after the acceptance of the proposal a
contract between the party arises.
In the present matter the defendant offered the plaintiff to buy a car but there was a clear
violation on the part of plaintiff as there was no proper communication of the acceptance
of offer to the defendant. Because the post did not reach to the offeror due to the
negligence on the part of the plaintiff as mentioned in the facts that Mr. Raman puts an
incorrect address on the letter. And then Mr. Raman subsequently sent a telex accepting
the offer at 9.00 am on Tuesday, 6th June. But Communication through the Telex did not
come in the knowledge of offeror until he revoked his offer.
1
Section 2(b), Indian Contract Act, 1872
1
MEMORIAL ON BEHALF OF THE DEFENDANT
Class Moot Court
So, the essentials of valid contract were not fulfilled, hence there was no binding contract
between the parties.
2
AIR 1980 MP 89
3
(1887) ILR 9 All 366
4
(2008) 7 SUPREME COURT CASES 29
2
MEMORIAL ON BEHALF OF THE DEFENDANT
Class Moot Court
just by deciding internally as seen in this case that the post has been sent to someone
else’s address. It is evident from the act that communication of the acceptance is an act of
internal decision.
In the case of Ram Das Chakrabarti v. Cotton Ginning Co. Ltd5. The Court held that
the offeror becomes bound when a properly addressed and adequately stamped letter of
acceptance is posted. It is clear from the facts that the letter which was dispatched by Mr
Raman was having an incorrect address. So, the defendant is not furthermore bound by
the law to enter into the contract by the means of acceptance through the post.
The communication of an acceptance is complete— as against the proposer, when it is
put in the course of transmission to him so as to be out of the power of the acceptor; as
evident from the facts that the plaintiff put the acceptance in the transmission to a wrong
address and not to the offeror so the defendant is not bound by the Indian Contracts Act
of 1872.
5
ILR (1887) 9 All 366 case
6
[1953] 1 WLR 207
3
MEMORIAL ON BEHALF OF THE DEFENDANT
Class Moot Court
It is humbly submitted before the Hon’ble court that the communication of acceptance is
not valid as per Indian contract act of 1872. Firstly, the acceptance made by the mode of
post did not reach to defendant and then Mr. Raman subsequently sent a telex accepting
the offer at 9.00 am on Tuesday, 6 th June. But Communication through the Telex not
came into the knowledge of offeror until 9:30 a.m. June 7th.
The communication by telex or telephone, fax or emails is categorized under
“instantaneous” modes of communication. They are called so because in these modes in
an absence of the contracting parties the communication of offer or acceptance or counter
offer reaches the party within a fraction of second or microseconds, i.e., instantaneously
in the form of electronic signals. The four instantaneous modes for communicating are
the telephone, telex, fax, and emails.
Section 2 Clause (b), of the Indian Contract Act, 1872 7 states when the person to whom
the proposal is made, signifies his assent thereto, the proposal is said to be accepted.
Thus, when a proposal is assented by the offeree, he is said to have accepted the
proposal. The communication of proposal through telephone or telex is complete when
the proposal is being communicated to the offeree, i.e., in the case of telephone, when the
offeree hears the offer and in the case of telex, when the offeree receives and read the
offer, the communication of the proposal is said to be complete. 8 It is clear from the facts
of the case that the knowledge of acceptance of offer came to defendant after he sent the
revocation to the plaintiff. Hence a valid contract was not formed between the parties.
In the case of Bhagwandas Goverdhandas Kedia v M/S. Girdharilal Parshottamdas 9,
which is considered to be a landmark case in Indian law describing communication using
instantaneous methods, telephone, the following guidelines were given:
That the rule about instantaneous communications between the parties is different from
the rule about the post. The contract is only complete when the acceptance is received by
the offeror and the contract is made at the place where the acceptance is received.
It is submitted that there is no communication until the reply actually comes to the
knowledge of the offeror. In the first place, the telephone is much more like conversation
face to face than an exchange of letters the risk of mistake over the telephone is so great
7
Section 2(b), Indian Contract Act, 1872
8
Powell v. Lee (1908)99 LT 284 (KB).
9
1966 AIR 543, 1966 SCR (1) 656
4
MEMORIAL ON BEHALF OF THE DEFENDANT
Class Moot Court
10
1955 2 QB 327
5
MEMORIAL ON BEHALF OF THE DEFENDANT
Class Moot Court
found that information in a telex is transmitted in the form of signals which is stored on
the receiving machine in the form of data which is later on printed on paper or displayed
on a screen and although the plaintiff sent acceptance via telex to the defendant but Mr.
Utkarsh did not receive it until 9:30 a.m. of June 7 th as given in the fact sheet. As
acceptance was not received by the defendant before he sent the revocation of his offer
no contract exists between the parties.
Brinkibon Ltd v Stahag Stahl11, The complainants, Brinkibon Ltd, were a company that
was based in London. They were buying steel from the defendants, Stahag Stahl, who
were sellers based in Austria. The complainants sent their acceptance of the offer by
Telex to the defendants in Vienna. Brinkibon Ltd later wanted to sue Stahag Stahl for
breach of contract. One of the issues before the court was regarding when the formation
of a contract would be formed when using instantaneous communication, such as Telex.
The court held that the communication of acceptance was received by Telex in Vienna,
so the time at which it was received was the time when the contract was created.
It is clear from the above case that the contract was created when the communication of
acceptance was received by defendant through Telex and in this case that is after the
revocation of offer thus, no contract ever existed.
In the case of Entores Ltd v Miles Far East Corporation 12 it was stated that: If a Telex
instrument in Amsterdam is used to send to London the notification of the acceptance of
an offer the contract is complete when the Telex instrument in London receives the
notification of the acceptance (usually at the same moment that the message is being
printed in Amsterdam) and the acceptance is then notified to the offeror, and the contract
is made in London.
Bombay high court in Quadricon Pvt. Ltd. v. Bajarang Alloys Ltd13, ruled that the
normal rule would apply and the contract would be completed only when the acceptance
was received by the offeror.
11
1983 2 AC 34
12
1955] 2 QB 327
13
AIR 2008 Bom 88
6
MEMORIAL ON BEHALF OF THE DEFENDANT
Class Moot Court
In England also, a similar view was taken by the Court of Appeal in the contract of
Entores Ltd. v. Miles Far East Corporation 14 regarding telephone or telex, it was
observed, "Where a contract is made by instantaneous communication, e.g., by telephone,
the contract is complete only when the acceptance is received by the offeror, since
generally an acceptance must be notified to the offeror to make a binding contract."
The above stated cases make it clear that the communication of acceptance is only
completed when it is received by the offeror and as it is clear from the facts of the case
that the telex was not received by Mr Utkarsh’s office, it never came into his knowledge
at least not until he sent the revocation of his offer.
14
1955] 2 All ER 493; [1955] 2 QB 327; [1955] EWCA Civ 3
7
MEMORIAL ON BEHALF OF THE DEFENDANT
Class Moot Court
It is humbly submitted before the Honourable Court that, as already known, § 5 of ICA15
is Revocation of Proposals and acceptance, as defined —
“A proposal may be revoked at any time before the communication of its acceptance is
complete as against the proposer, but not afterwards; which means that before the
acceptance is complete, the offer has to be revoked by the offeror or the proposer. the
acceptance is completed when the communication is completed Or This process of
acceptance would be completed when the acceptance is being put into the course of
transmission by the person who had to give the acceptance.”
This implies that the communication of revocation of offer can be effective only:
B) when the revocation reaches the offeree before he posts his acceptance and makes
it out of his power.
C) Lastly, when the communication of acceptance is done by the method of telex, the
contract would be completed only when the acceptance is received by the person who has
made the offer, till the acceptance is not received by the person who has made the offer
the communication of acceptance will not complete.
15
Contract Act. CODE (1872) (Herein referred as I.C.A.).
8
MEMORIAL ON BEHALF OF THE DEFENDANT
Class Moot Court
It is submitted before the Honourable Court that in the present case, however the accused
Mr. Utkarsh M.D of Toffscars Ltd., has never received the acceptance letter thus
nullifying the claims of Mr. Raman ascertaining that the crucial element of a valid
contract has not been fulfilled. Furthermore, it is very clearly stated that the defendant has
sent revocation telex before receiving Mr. Raman’s telex thus, complying with the
Section 5. This will be further explained in detail.
It is humbly submitted to the Honourable Supreme Court that, the accused never received
acceptance offer, although § 4 states that “The communication of an acceptance is
complete -as against the proposer, when it is put in a course of transmission to him so at
to be out of the power of the acceptor; as against the acceptor, when it comes to the
knowledge of the proposer” but in the present case it never came to the knowledge of
proposer due to the slip of pen by the acceptor. it was probably delivered on the wrong
address mentioned on the letter but was not received in the proposer’s office. In this
scenario the offeree is not in the state to nullify the revocation and make imprecations.
Moreover, the plaintiff’s claims of acceptance through telex are just paper tiger which
can’t avoid being shredded because the plaintiff has no evidence about whether the
defendant received the telex or not. Since the telex is neoteric mode of communication in
contrast to letter through post, it is important to check if the person concerned has
received it or not, as when a contract is made by post it is clear law that the acceptance is
complete as soon as the letter is put into the post box. But same is not the case when
communication mode is deemed neoteric and instantaneous such as telex, telephone mail
etc. forming contract through these modes of communication requires both the parties to
receive the contract for its completion.
In the case of Steel Authority of India Ltd. vs Macmet India Ltd., As held by the
Calcutta High Court that the contract becomes complete as soon as the acceptance is
made by the acceptor and intimated to the offeror16.
16
Steel Authority of India Ltd. vs Macmet India Ltd., (1998) 2 CALLT 264 HC
9
MEMORIAL ON BEHALF OF THE DEFENDANT
Class Moot Court
Following conclusions have also been found in the case of Quadricon Pvt. Ltd. vs
Bajarang Alloys Ltd18 where Honorable High Court pointed out that communication by
fax is similar to communication by telex, Accordingly, in case of communication by fax,
also the normal rule would apply and the contract would be completed only when
the acceptance came into the knowledge of the offeror.
Once the revocation has been communicated to the other party, the original proposal
stands cancelled and the other party cannot legally accept the proposal as the proposal is
not in existence anymore. Revocation comes into effect as soon as it has been
communicated to the relevant party.
17
1966 AIR 543, 1966 SCR (1) 656
18
AIR 2008 Bom 88
10
MEMORIAL ON BEHALF OF THE DEFENDANT
Class Moot Court
As in the case of The Secretary of State for India vs Bhaskar Krishnaji Samant 19,
Honorable Bombay High Court deemed that a person who makes a proposal is entitled
to withdraw it before it is accepted.
In the case of Payne v Cave21: The defendant made the highest bid for the plaintiff's
goods at an auction sale, but he withdrew his bid before the fall of the auctioneer's
hammer. It was held that the defendant was not bound to purchase the goods. His bid
amounted to an offer which he was entitled to withdraw at any time before the
auctioneer signified acceptance by knocking down the hammer.
It is clear that if the revocation of offer has reached the offeree before the acceptance
comes to the knowledge of the proposer, then it is a valid revocation of offer. The
Revocation of offer is complete only at any time before the communication of acceptance
is complete as against the offeror, but not afterwards.
In the case of Dickinson v. Dodds22. Party A offered to sell his property to Party B
but decided to sell it to Party C instead. Party B found out about the sale because
19
(1925) 27 BOMLR 973
20
AIR 1981 Pat 271, 1981 (29) BLJR 524
21
(1789) 3 TR 148
22
(1876) 2 Ch D 463
11
MEMORIAL ON BEHALF OF THE DEFENDANT
Class Moot Court
Party D told him. This was legal, as Party A went through the revocation process
legally by having Party D inform Party B about the sale.
In Byrne & Co. v Leon Van Tienhoven & Co 23, Common Pleas Division the court
held that withdrawal of an offer by telegram is only valid if the telegram is received
before the offer is accepted.
Considering the above cases therefore, it is to be taken in view that defendant was
competent to revoke his contract before its acceptance was complete in the sense, as
against him, and certainly it cannot be considered accepted not until 9:30 p.m. on
June 7th, when he had already withdrawn his offer.
It is submitted before the Honourable Court that there is no breach of contract on the part
of defendant as stated before there was no binding contract between the parties, also the
revocation of the offer by the defendant was valid under Section 5 of Indian Contract Act,
1872.
A contract is breached or broken when any of the parties fails or refuses to perform its
promise under the contract. Breach of contract is a legal cause of action in which a
binding agreement is not honoured by one or more parties by non-performance of its
promise by him renders impossible.
Section 37 of the Indian Contract Act,1872 provides that the parties to the contract are
under obligation to perform or offer to perform, their respective promises under the
contract, unless such performance is dispensed with or excused under the provisions of
the Indian Contract Act or of any other law.
According to Section 39, where the party has refused to perform or disabled himself from
performing, his promise in its entirely, the other party may put an end to the contract,
23
(1880) LR 5 CPD 344
12
MEMORIAL ON BEHALF OF THE DEFENDANT
Class Moot Court
unless that other party has expressly or impliedly signified its consent for the continuance
of contract. If the other party chooses to put an end to the contract, the contract is said to
be broken and amounts to breach of contract by the party not performing or refusing to
perform its promise under the contract. This is called repudiation. Thus, repudiation can
occur when either party refuses to perform his part or makes it impossible for him to
perform his part of contract in each of the cases in such a manner as to show an intention
not to fulfil his part of the contract.
Chapter VI (Section 73 to 75) of the Indian Contract Act, 1872 deals with the
consequences of breach of the contract.
It was stated in the case of Felthouse v. Bindley24 that for a valid contract the acceptance
should be communicated and moreover such communication should be made to the
offeror. Another point of law explained in the case was that the offeror cannot impose
upon the offeree duty to reply and therefore an offeror cannot say that failure to reply will
be deemed to be acceptance of the offer. There was no breach of contract.
As stated above in present case the essentials of a valid contract are not fulfilled so there
is no valid contract in this case. Hence no breach of contract exists.
24
1862), 11 CB (NS) 869, 142 ER 1037
13
MEMORIAL ON BEHALF OF THE DEFENDANT
Class Moot Court
PRAYER
In the light of the facts stated, issues raised, arguments advanced &authorities cited the
counsel on behalf of the humbly prays before the Hon’ble Civil Court to kindly adjudge
and declare,
1. That the Plaintiff did not meet the essentials of valid contract
2. That the Accused has not breached the contract since there was no contract.
3. A valid existence of valid contact never took place.
4. That the Defendant should be free from any such charges.
Or to pass any appropriate relief that the Hon’ble Court may deem fit and is in the best
interest of Justice, Equity and Good Conscience,
And for this act of kindness, the counsel on behalf of the Appellant, as duty bound shall
forever pray.
_______________________________
SD/-
11
MEMORIAL ON BEHALF OF THE DEFENDANT