Section 4 of the Indian Contract Act, 1872 reads as follows: Communication when complete - The communication of a proposal is complete when it comes to the knowledge of the person to whom it is made. The communication of an acceptance is complete, - as against the proposer, when it is put in a course of transmission to him so as to be out of the power of the acceptor; as against the acceptor, when it comes to the knowledge of the proposer.

Thus, the provision makes no difference in the position of the offeror. The offeror becomes bound when a properly addressed and adequately stamped letter of acceptance is posted. The acceptor does not become bound by merely posting his acceptance. He becomes bound only when his acceptance comes to the knowledge of the proposer. The contract is concluded at the place from where the proposal is accepted and communication of acceptance is dispatched, i.e., the address at which the proposal was sent. The court at that place would have jurisdiction to entertain a cause of action under the contract. This rule, that the communication of an acceptance is complete as against the proposer when the letter is posted, is probably intended to apply only when the parties are at a distance and they communicate by post. “Where, however, the parties are in each other’s presence or, though separated in space”, they are in direct communication, as, for example, by telephone, no contract will arise until the offeror receives the notification of acceptance.

‘A’, who is in Mumbai, makes an offer for supply of goods to ‘B’, who is in Delhi, via a mobile phone call. During the same call, A’s offer is absolutely and unconditionally accepted by ‘B’. According to the terms agreed between ‘A’ and ‘B’, goods are to be supplied at Pune and payment is to be made electronically. In the given situation, where is the contract concluded?