S.4 Contract Act | Party Can’t Dispute Legally Enforceable Liability Until ‘Communication’ Regarding Termination Of Contract Is Complete

Case: Prahlad Sharma versus Dipika Sharma and Another

Coram: Justice Meenakshi Madan Rai

Case No.: Crl.Rev.P. No.04 of 2020

Court Observation: “Undoubtedly, the (Termination) Notice Exhibit 1 is dated 25-01-2018, Exhibit 11 stands testimony to the fact that it was booked in the post on 01- 02-2018 and received by the Petitioner only on 08-02-2018. It emerges that there was no termination of Contract when the cheques, Exhibits 1 and 2 were presented by the R1 on 30-01- 2018 before the Bank and came to be dishonoured.”

“It will be seen that the communication of a proposal is complete when it comes to the knowledge of the person to whom it is made but a different rule is made about acceptance. Communication of an acceptance is complete in two ways – (1) against the proposer when it is put in the course of transmission so as to be out of the power of the acceptor; (2) as against the acceptor when it comes to the knowledge of the proposer.”

“The Agreement was subsisting between the parties in view of Section 4 of the Contract Act and considering the date of posting of Notice Exhibit 11 by the R1 to the Petitioner and the fact that it was received by the Petitioner only on 08-02-2018,”

“If the negotiable instrument happens to be a cheque, Section 139 raises a further presumption that the holder of the cheque received the cheque in discharge in whole or in part of any debt or other liability,”

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Keywords

S.4 Contract Act, Termination Of Contract