Bhagwandas v. Girdharilal (1966) — Telephone Acceptance & Place of Contract

The Supreme Court said: for telephone talks, a contract is made where the offeror hears the acceptance. The postal rule does not apply. In this case, acceptance was heard at Ahmedabad, so that court had jurisdiction.

• Instant modes (phone) use the receipt rule—acceptance must be heard.
• Place of contract = place where acceptance is communicated to the offeror.
• Postal rule is for non-instant methods only.

1. Do ICA provisions decide the place of contract formation?
2. Does Section 4 cover the telephone as a communication mode?
3. Is the postal rule applicable to this phone contract?

• Intimation (communication) of acceptance to the offeror is essential for instantaneous modes.
• Postal rule (acceptance on posting) does not apply to telephone/instant communication.
• Place of contract: where acceptance is received/heard by the offeror.

The Court held that for telephone conversations, a contract is concluded when the offeror hears the acceptance. Therefore, the contract was formed at Ahmedabad. The postal rule was rejected here.

• Intimation of acceptance to the offeror is essential for phone/instant modes.
• Place of contract = place where acceptance is received (heard).
• Postal rule confined to non-instant methods.

This case guides jurisdiction and formation rules for modern, instant communications. It draws a clean line between dispatch rules (post) and receipt rules (phone).

Mnemonic: “HEAR” — Hear • Exact • Ahmedabad • Receipt

1. Hear: Offeror must hear acceptance.
2. Exact: Instant modes need exact communication.
3. Ahmedabad: Contract place = where heard (here, Ahmedabad).
4. Receipt: It’s a receipt rule, not dispatch.

Receipt Rule

Acceptance finishes when the offeror receives/hears it.

Postal Rule

Acceptance by post is complete when posted (not for phones).

Jurisdiction

Court’s power to hear the dispute—often linked to where the contract formed.