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Lse Presentation
Lse Presentation
Lse Presentation
1.Whether the Ahmedabad Civil Court had jurisdiction over the matter?
2. Whether the contract formed at the place of acceptance or where the acceptance was received?
CONTENTIONS
Appellant’s contention
•Only the court under whose territorial jurisdiction the acceptance is spoken through telephone has
jurisdiction to look into any suit regarding the contract.
•For determining where the contract is made, Section 3 and Section 4 are applicable.
Defendant’s contention
•If the making of an offer is cause for breach of contract, then the court in whose territorial jurisdiction
such offer was made can look into the matter.
•The court under whose territorial jurisdiction the acceptance was initiated has to look into the matter
regarding the acceptance and formation of the contract.
Hidayatullah. This case was in favor of respondents with a majority of 2:1.
•Justice Shah and Justice Wanchoo were of the opinion that the majority of the European countries
and the US had accepted the rule of consensus ad idem and the contract is made where the
acceptance is spoken.
•The Indian Contract Act 1872 doesn’t foresee the contracts formed through instantaneous modes of
communication, such as a telephone. Therefore, Ahemdabad Civil Court had the jurisdiction to try
the suit since the contract was formed where the acceptance was initiated under its territorial
jurisdiction.
•Justice Hidayatullah gave a dissenting opinion, saying that though Indian Contract Act is applicable in
India, it was inspired by English Contract Law. In Entores case it was held that a contract is formed only
when the communication of acceptance is done and is heard by the offeror. The contract has emerged
where the acceptance is received and not where spoken through telephone. Therefore, the Ahmedabad civil
city court doesn’t have jurisdiction to look into the matter.
DECISION
The Honorable Supreme Court held that the Trial Court was correct, and the decision was
rightfully made under its jurisdiction where the communication of acceptance is heard by the
offeror through the telephone. Therefore, the appeal made was dismissed.
CONCLUSION
This case widened the scope of communication of offer and acceptance. The court
decided to question the place of origin of the cause of action in a suit where the
breach was made. It clarified the rules regarding communication of offer, acceptance,
and revocation when made over a telephone. It said the rule applied when acceptance
is made through the post is not applicable when made through telephone. In cases of
agreement over the telephone, the situation is like a conversation happening in front of
each other. Therefore, acceptance of the offer is made at the offeror’s place when the
communication is instantaneous, i.e., through telephone.