Principle Acceptance of offer must be communicated by the offeree to the offeror so as to give rise ...........

Indian Contract Act (ICA)1872 Formation of Contract

Principle: Acceptance (of offer) must be communicated by the offeree to the offeror so as to give rise to a binding obligation. The expression ‘by the offeree to the offeror’ includes communication between their authorised agents.

Facts: ‘X’ made an offer to buy Y’s property for a stipulated price. ‘Y’ accepted it and communicated his acceptance to ‘Z’ a stranger. Which of the following derivations is CORRECT??

Y’s acceptance resulted in an agreement

Y’s acceptance did not result in any agreement

Y’s acceptance resulted in a contract

Y’s acceptance resulted in a promise

Explanation:

As per the principle, acceptance must be communicated to Xor an authorised agent of X.
In this case, however, acceptance is communicated to Z who is a stranger and therefore no valid contract could arise between Xand Y.