modes of revocation of a proposal
Q.5 What are the different modes of revocation of a proposal. Illustrate your answer.
Or
An offer cannot be accepted after it has been terminated or negative. Explain when an offer ceases to be capable of acceptance.
Ans. Rule of Revocation of proposal [Section 5].- Section 5 of the Indian Contract Act, 1872 deals with rules regarding revocation of proposals and acceptances. With respect of the revocation of the proposal.
Section 5 of the Indian Contract Act lays down :
According to S. 4 of the Contract Act, the communication of the acceptance is complete, as against the proposer, whether the letter of acceptance is put in a course or transmission to the proposer, so as to be out of the power of the acceptor.
"A proposal may be revoked at any time before the communication of the acceptance is complete as against the proposer but not afterwards."
Illustrations.A proposes by a letter sent through post to sell b house to B. B accepts the proposal by a letter sent through post. A may revoke his proposal at any time before or at the moment when B (the acceptor) posts his letter of acceptance, but not afterwards.
Modes of revoking a proposal [Section 6].-Section 6 of the Contract Act lays down that a proposal is revoked in following manner:
1. By Notice of Revocation .-It is revoked by the communication notice of revocation by the proposer to the other party; or
In Henthorn v Fraser (1892) 2 Ch 27, an offer to sell a property gave acceptor the right to accept within 14 days. The next day at about 3.50 p.m. the acceptor sent by post his letter of acceptance, which was received by offeror's office at 8.30 p.m. But before that at about 1 p.m. the offeror had posted a letter revoking his offer. The revocation and the acceptance crossed in the course of post. The acceptor received the letter of revocation at 5.30 p.m. The revocation was held to be ineffective. The court observed that a person who has made an offer must be considered as continuously making it until he has brought to the knowledge of the person to whom it was made that it is withdrawn.
Where an offeror gives the offeree (acceptor) an option to accept within a fixed period, he may withdraw it even before the expiry of that period. In Alfred Schonlank v M. Chetti (1892) 2 Mad LJ 57, the defendant left an offer to sell certain goods at the plaintiff's office allowing him 8 day's time to give his answer. On the 4th day however the defendant revoked his proposal. The plaintiff accepted it on the 5th day. The court held that acceptance is useless as in the absence of consideration for the promise to keep the offer open for a time, the promise is mere nudum pactum. Thus where the agreement to keep the offer open for a certain period of time is for some consideration (even one pound), the offeror cannot cacel it before the expiry of that period.
Notice of revocation shall be deemed to have been served when it reaches the acceptor's address. In The Brimmes (1974) 3 All ER 88, a notice of revocation was sent by telex and was received by the reads telex machine during normal business hours, but the plaintiff the message the next day. He was, however, held bound by the notice when his machine received it.
Under the Indian law, it is necessary that the communication of revocation should be from the offeror or from his duly authorised agent. However, under the English law, it is enough if the acceptor knows reliably that the offer has been withdrawn. Thus in Dickinson v Dodds ( overline 1876 )2 Ch D463, the plaintiff was informed by a third person that the property (about which an offer was made) had already been sold to another. Held that a sale to a third person which came to the knowledge of the person to whom the offer was made an effectual withdrawal of the offer.
2. By Lapse of Time Prescribed. It is revoked by the lapse of the time prescribed in such proposal for its acceptance, or, if no time is prescribed, by the lapse of a reasonable time, without communication of the acceptance; or
By the lapse of time prescribed in such proposal for its acceptance or if no time prescribed by the lapse of a reasonable time without any communication of the acceptance.-In other words, where time has been fixed in a proposal for acceptance, then proposal is revoked automatically by the lapse of fixed time. Where no such time is prescribed by the proposer his proposal is open to acceptance within a reasonable time only.
In Ramsgate Victoria Hotel v. Mantefiore (1866).-A offered by letter dated June 10, 1923, to purchase certain shares in a certain company. No reply was sent to him until November 10, 1923, when he was informed that shares were allotted to him (A). It was held that A was not bound by the allotment and could refuse to accept the shares as the acceptance of his proposal was too late.
3. By Failure to Fulfill A condition Precedent.-It is revoked by the failure of the acceptor to fulfill a condition precedent to acceptance; or
State of M.P v.
Goberdhan Dass
Where the offer is subject to a condition precedent, it lapses if t is accepted without fulfilling the condition. For example, if the offer requires the deposit of some earnest money, or the execution of some document, etc., these conditions must be fulfilled. Similarly, tenders may be invited subject to the condition that tenders must be accompanied by security deposit.
4. By Death or Insanity of Proposer.-It is revoked by the death or insanity of the proposer if the fact of his death or insanity comes to the knowledge of the acceptor before acceptance.
An offer lapses on the death or insanity of the offeror, provided that the fact comes to the knowledge of the offeree before he makes his acceptance. It means that if such fact has not comes to his knowledge while he accepts the offer, it is valid acceptance giving rise to contractual obligations.
There is no provision in the Act about the effect of the
death of an offeree. But as an offer can be accepted only by an offeree and not
by any other person, it should not be capable of being accepted by the
offeree's executor also. Where an offeree has written his acceptance but he
dies before posting, the offer lapses and the posting of the letter after his
death will not create a contract (In re
Irvine (1928) 3DLR 268) .
5. By counter-offer or by rejection.-If offer has been rejected or if in reply of offer, a counter-offer has been made, the offer would lapse.
Hyde v.Wrench (1840) 3 Beav, 334.-It was held that if the counter offer is made by the plaintiff it destroys the offer made by the defendant.
Communication must be from proposer or his authorized agent .-The words, "by the proposer" used in the clause imply that a notice of revocation shall be communicated to the other party by the proposer himself or his agent and not by any third person. But under the English law, the acceptor must come to know of the proposal by the proposer through some source. In English Law it is not necessary as under the Indian law that the proposer himself should communicate revocation of the proposal to the other party.
References
Avtar Singh – Law of Contract and Specific relief .
Mulla --- Law of Contract and Specific relief.
Dr. H.K. Saharay- Law of Contract.
Dr R.K. Bangia—Law of Contract.
https://www.slideshare.net/shrinivas1648/law-of-contract-business-law
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