Question:

Ramu applied for the post of Director in an organization. The governing body of the organization passed a resolution appointing him to the post. After the meeting, one of the members of the governing body informed him privately of the resolution. Subsequently, the resolution was rescinded. Ramu claims damages. Which one of the following is the correct legal proposition in the case?

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Ask who told Ramu, and whether that person had any authority to speak for the governing body. Acceptance that is never properly communicated forms no contract.
Updated On: Jul 17, 2026
  • Ramu cannot claim damages as he had not resigned from his existing post in anticipation of getting the appointment letter
  • Ramu cannot claim damages as there was no formal communication
  • Ramu can claim damages as governing body cannot rescind the resolution once passed
  • Ramu can claim damages as there was private communication
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The Correct Option is B

Solution and Explanation

Step 1: Understanding the Question.
Ramu applied for a post, which is an offer made to the organization. The governing body passed a resolution appointing him, which is the mental act of accepting that offer. The question asks whether a binding contract came into existence, because damages can only be claimed if there was a contract that the organization then broke.

Step 2: Key Rule.
An acceptance has no legal effect until it is communicated to the offeror. Communication must come from the acceptor or from someone the acceptor has authorised to communicate it. Information leaking out through an unauthorised person is not communication of acceptance at all. Until acceptance is properly communicated, the accepting party is free to change its mind and withdraw the resolution.

Step 3: Applying the Rule to Ramu.
The governing body never sent Ramu any appointment letter or any official intimation. What reached him was a private whisper from one member, acting on his own and not on the instructions of the body. That member had no authority to convey the decision. So in the eye of the law, the acceptance stayed locked inside the meeting room.
Since acceptance was never communicated by an authorised channel, no contract was formed. With no contract, there is no breach, and with no breach, there is nothing to award damages for. This is the reasoning of the well known decision in Powell v. Lee, where a school's managers selected a headmaster and one manager privately told him so, and the court held there was no binding contract.

Step 4: Why the other options fail.
Option (A) is wrong because the case does not turn on whether Ramu acted on the news or suffered loss. Even if he had resigned his old job, he still could not sue, because the defect is the absence of a contract, not the absence of loss.
Option (C) is wrong because a resolution passed in a meeting is only an internal decision of the body. Until it is communicated, the body can freely rescind it. A resolution is not a promise to the outside world.
Option (D) reverses the law. Private, unauthorised communication is precisely what does not count. It cannot be the ground for claiming damages.

Final Answer:
Ramu cannot claim damages because the acceptance was never formally communicated to him, so no contract came into being. Option (B) is correct.
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