Ahmed Pvt Limited company, a supplier of electric appliances , wrote a letter to All Spares Private Limited, a supplier of electric spare parts, in order to offer them joint ventureship. Under this offer All Spares Pvt Ltd shall be exclusive supplier and service partner of Ahmed Pvt Ltd for their customers. All Spares shall be entitled to 20% share in profit received by sales of post sales service contracts. Ahmed Pvt Ltd sent a letter of offer to All Spares Pvt Ltd via post which was duly received by the company. They did not agree to the terms and immediately prepared a letter of non acceptance as prescribed by the offeror and they put it in the course of transmission through normal post.

The offeror prescribed that if the offer is not responded to within one week it shall be considered as accepted. The letter of non acceptance was lost by the post authorities and could not reach the offeror in time. The offeror started to prepare the venture formalities and the list of incurred costs were sent to All Spares Pvt Ltd. They responded through telephone call saying that they have rejected the offer through post and are not liable to follow the directions.

Offeror said that since the letter of non acceptance was never received, the contract has been formed and is binding upon All Spares Pvt Ltd.

Advise All Spares as to their rights and obligations under the scenario mentioned above.