Contracts over the Telephone
Contracts that are made via telephone calls are eligible for recognition under the Indian Contract Act, which treats them in the same manner as contracts that are formed through other modes of communication. The following is a list of important information about contracts over the telephone that are governed by the Indian Contract Act:
1. Transactions over Telephone: Transactions that are made over the telephone are subject to the principles of offer and acceptance, which are relevant to such transactions. It is possible to vocally accept an offer that was offered during a phone discussion while the call is still in progress.
2. Communication and Acceptance: The communication of acceptance is considered to be complete following Section 4 of the Indian Contract Act when it is placed in a channel of transmission and is brought to the notice of the offeror. Because of this, a vocal assent during a chat over the phone is often adequate; since the rule is applied to contracts made over the telephone as well.
3. Revocation: As is the case with other modes of communication, the person who made the offer can withdraw it at any point before the acceptance is finalized. Revocation of the offer is regarded to have occurred if the communication of the revocation occurs before the acceptance of the offer.
4. Instant Communication: Conversations that take place over the telephone are regarded to be instantaneous communication. In situations when instantaneous communication takes place, the revocation or acceptance of the agreement is considered to have taken effect once it has been received by the other party, as stipulated by Section 4(3) of the Act.
5. Record of Communication: Keeping a record of telephone calls may serve as proof if, there are disagreements over the terms and conditions that were agreed upon. It is important to note that the Indian Contract Act does not expressly dictate that a written record of the contract must be submitted.
6. Enforceability: Contracts that are made using the telephone have legal force and are enforceable, provided that they satisfy the key components needed by the Indian Contract Act. These elements include an offer, an acceptance, a legitimate purpose, and compensation.
Because the majority of telephone transactions do not constitute a written record, the parties are strongly recommended to reaffirm the conditions of the contract in writing to prevent any possible misunderstandings or disagreements from occurring.
In the case of Kanhialal vs Dinesh Chandra, it has been held that where a contract is effected by telephonic conversation, the contract is not complete till acceptance of the offer by the offeree is heard and understood by the offeror.
Communication of Offer, Acceptance and Revocation
When it comes to the field of contract law, efficient communication is a fundamental component that determines the process of forming, accepting, and rescinding offers. In 1872, the Indian Contract Act was created, which offers a thorough foundation for comprehending the dynamics of communication within contractual relationships. To shed light on the intricacies that drive these essential components of contract formation in India, this essay dives into the fundamental concepts that underline the communication of offer, acceptance, and revocation.
A clear and definite offer is required under Section 2(a), which states that “An offer must be able to create a legally enforceable agreement and must be clear and definite. Uncertainty and the possibility of disagreements might result from terminology that is ambiguous or vague.”
Geeky Takeaways:
- When contracting parties are face to face and negotiate in person, there is an instantaneous communication of offer and acceptance which gives rise to a valid contract.
- A valid contract comes into existence when the moment the offeree gives his absolute and unqualified acceptance to the proposal made by the offeror.
- The question of revocation does not arise in cases where an offer is made and accepted instantly at the same time.
- Thus, communication plays an important role in the Indian Contract Act, 1872.
Table of Content
- Communication of an Offer
- Legal Rules for Communication under the Act
- Communication of an Acceptance
- Communication of Revocation
- Time during which an Offer or Acceptance can be Revoked
- Effect of Delay or Loss of Letter of Acceptance in Postal Transit
- Accidental Formation of a Contract
- Contracts over the Telephone
- Conclusion
- Frequently Asked Questions (FAQs)
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