Declining an accepted offer with another employer that was said to be on hold

Dear Experts, Would like to take an advise.
I received an job offer from a company and I accepted the same through e-mail and have not signed any document. However, even before getting the above offer, there was a position with other employer that was said to be on hold and since I had taken that interview much earlier, they are considering me to offer. The CTC etc are the same and the brand is also good as compared to the other.
Now, I have to declare that I'm unable to join the company which offered me earlier. I know it will disappoint them but on the other hand i can never get back an offer which is likely a dream company if I reject the other. So please let me know how do i put this and Will there be any legal challenges evolved because of this ?

I don't think any serious legal issues involved in retracing & informing the HR in a letter expressing your inability to get on with the accepted offer. Let it be a letter with pleasing & convincing words, apologizing for disappointing them. You may even first talk to them immediately followed with a letter. Remember once you withdraw the acceptance you cannot apply for any post in the very same co.in future.