Revocation of Offer and Acceptance

Revocation of Offer and Acceptance

Introduction

To form a authorized enforceable contract there must be a proposal which has to be accepted by the other party. Once a proposal is accepted by the other party and it is accurately communicated to the party who made the proposal it becomes a agreement, provided the object and consideration isn’t illegal and therefore the party have an intention to make a legal relationship. Once it becomes a binding contract the parties can’t back out from their respective commitments. The parties can revoke the proposal or acceptance any time before the communication of an equivalent is complete against the opposite party. According to Chapter 1 of  Indian Contract Act 1872 which  deals with the communication, acceptance and revocation of proposals.

Communication of proposal and acceptance

When the proposal is accepted it creates legal relations between the 2 parties. Effective communication and a transparent understanding of it’s important to avoid misunderstanding between all the parties. When the parties are talking vis –a-vis the communication will take place in real time and the offer and acceptance can be communicated on the spot, without creating any sort of confusion. But In business the communication takes place via letters and emails etc. So, during this case, the timeline of communication is  notable .

Mode of Communication

All communication should be according to the specified mode. If no mode is prescribed, the communication must be through a suitable mode. If the offer isn’t accepted consistent with the prescribed or usual mode, the offer lapses provided the offeror gives notice to the offeree within an inexpensive time that the acceptance isn’t consistent with the mode prescribed.

Revocation of Proposal

The party who has made the proposal can terminate  the proposal any time prior the communication of acceptance is complete as against the proposer. The communication of acceptance of a proposal is complete against the proposer when it’s put during a course of transmission to him, so on be out of the power of the acceptor (Sec 4, Indian Contract Act 1872). The party who had made the proposal must communicate the revocation to the other party before the other party accepts the offer.

Once the revocation has been communicated to the opposite party, the first proposal stands cancelled and therefore the other party cannot legally accept the proposal because the proposal isn’t alive anymore. Revocation comes into effect as soon because it has been communicated to the rele vant party.

In Byrne & Co. v Leon Van Tienhoven & Co (1880) LR 5 CPD 344, Common Pleas Division here the court said  that termination of an offer by telegram is only valid if the telegram is received before the offer is accepted.

As mentioned in section 5 of the act which deals with the revocation of the proposal. A proposal are often revoked by giving a notice of revocation to the opposite party. Communication of revocation are often direct or indirect and may be made by a 3rd party. If the communication is indirect, it must be clear, unambiguous and understood by a “reasonable person” and will be communicated by a reliable source.

Selling an item to somebody else is taken into account a legal revocation goodbye because the original offeree is notified of the sale before they accept the offer. In Dickinson v. Dodds (1874 ) the court opines that “If a suggestion has been made for the sale of property, and before that provide is accepted, the one that has made the offer enters into a binding agreement to sell the property to somebody else, and therefore the person to whom the offer was first made receives notice in how that the property has been sold to a different person, can he then make a binding contract by the acceptance of the offer? I am of opinion that he cannot.” This case further establishes that the party making the offer can communicate the revocation through a 3rd party. The communication of revocation is dealt with in section 4 of the Indian Contract Act,1872.

The communication of a revocation is complete as against the one that makes it, when it’s put into a course of transmission to the person to whom it’s made, so as to be out of the power of the person who makes it or as against the person to whom it is made, when it comes to his knowledge.

Communication of Acceptance

In communication of acceptance, there are two factors to think about , the mode of acceptance then the time of acceptance. Acceptance are often by an act which incorporates communication by words, oral or written through phone, letters, e-mails, fax, etc. or by conduct like boarding a bus etc.

When is Acceptance complete? Time of acceptance

A proposal are often accepted by the offeree any time before the communication of revocation is complete against him. 

Once accepted by the offeree the communication of acceptance is complete:

as against the proposer, when it’s put during a course of dissemination to him, so on be out of the facility of the acceptor;

as against the acceptor, when it will contain the knowledge of the proposer.

Revocation of Acceptance

There are often instances where a proposer makes a suggestion and therefore the acceptor accepts the proposal and communicates an equivalent to the proposer. Can the acceptor revoke/cancel this acceptance?

 Yes, the acceptor can rescind this acceptance prior the communication of acceptance reaches the proposer. That is prior the communication of acceptance is complete as against the acceptor. If the revocation of acceptance outreach the proposer before the acceptance  involves in the knowledge of the proposer there are often a legitimate revocation of acceptance. The Revocation of Acceptance is complete only at any time prior the communication of acceptance is complete as against the acceptor, but not subsequently.

Communication of Revocation of Acceptance

The communication rules for revocation of offer are going to be applicable to revocation of acceptance also . The communication is complete against the proposer when it comes to the knowledge.

Author: Ananya Kashyap,
Symbiosis Law School, Nagpur/ 1 year

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