Question:medium

‘A‘ applied for allotment of 100 shares in ‘B‘ company. A letter of allotment addressed to ‘A‘ was posted in due time, but it never reached ‘A‘. The posting of letter of allotment:

Updated On: Jul 13, 2026
  • completes the contract
  • does not completes the contract
  • makes the contract voidable
  • makes the contract void
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The Correct Option is A

Solution and Explanation

Share allotment cases are a classic setting for testing the postal rule, and the trick is to keep in mind that the rule protects the party who is not in control of the post. Here, that party is the applicant.

  1. Completes the contract: once the company drops the allotment letter in the post, it has done everything within its own control to communicate acceptance, and the law does not make the applicant's contract depend on something entirely outside the company's hands, namely whether the postal service actually delivers the letter.
  2. Does not completes the contract: this option would leave the timing of contract formation hostage to postal delays or loss, which is exactly the uncertainty the postal rule was designed to remove.
  3. Makes the contract voidable: voidability requires something like coercion, fraud, undue influence, or misrepresentation affecting consent, none of which is present merely because a letter went missing.
  4. Makes the contract void: a contract only becomes void for want of an essential element from the start. A lost letter after the offer and acceptance were validly exchanged does not undo any of those essentials.

So the moment of posting, not the moment of receipt, is what the law treats as decisive here.

The correct answer is completes the contract.

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