REVOCATION OF OFFER
AND ACCEPTANCE
Sec. 5: Revocation of Proposals and acceptance:
A proposal may be revoked at any time before the
communication of its acceptance is complete as
against the proposer, but not afterwards.
An acceptance may be revoked at any time before the
communication of the acceptance is complete as
against the acceptor, but not afterwards.
Managing Committee SGA High School v. State of
Bihar & others (1981)
Dr. Parmanand, the secretary of the Management
Committee of a school send his resignation on
9.7.1980
He sent another letter dated 9.8.1980 withdrawing
his resignation.
Managing Committee on 11.8.1980 and ignoring
his subsequent withdrawal, accepted his
resignation.
Question before court was whether he his
withdrawal was valid or not?
Decision
Court held that it is clear that an offeror can
withdraw his offer before its acceptance. And in
present case acceptance of resignation by
Managing Committee was invalid.
J.K. Enterprises v. State of M.P.
A tender to purchase tendu leaves was submitted by
petitioner on 11.01.1993.
And the same was accepted by a registered letter
dated 12.02.1993.
The letter however did not reached to the petitioner.
Petitioner purported to withdraw his tender by a fax
message on 3.3.1993.
Whether his fax for revocation is valid or not?
Decision
It was held that a valid contract has come into
existence on 12.02.1993 when letter of acceptance
has been send to him and the revocation of an offer
is not possible after its acceptance.
Modes of Revocation of Offer
Sec. 6: Revocation how made
A proposal is revoked -
(1) by the communication of notice of revocation by the proposer to
the other party;
(2) by the lapse of the time prescribed in such proposal for its
acceptance, or, if no time is so prescribed, by the lapse of a
reasonable time, without communication of the acceptance;
(3) by the failure of the acceptor to fulfil a condition precedent to
acceptance; or
(4) by the death or insanity of the proposer, if the fact of the death or
insanity comes to the knowledge of the acceptor before acceptance.
1. By Notice
An offer can be revoked before its acceptance by
communicating a notice to this effect by offeror (or
his authorised agent) to offeree.
From sec. 6(1) it is clear that notice of revocation
must be communicated by offeror (or his
authorised agent) only.
But position in England is different, revocation of
offer may come to offeree from other sources also,
which produces same effect of revocation of offer.
Dickenson v. Dodds (1876)
(This is an authority of English law on this point)
Dodds made an offer on 10.06.1874 to Dickenson for
the sale of his property for £ 800 and mentioned that
offer is open till 9 am of 12th June.
But Dodds sell his property to another person on 11
june.
This fact came into the knowledge of Dickenson from
some third person.
He accepted the offer before 9 am of 12 june and sued
Dodds for the breach of contract.
Whether Dodds is liable towards Dickenson?
Decision
No, offer stands cancelled when Dickenson got the
notice that Dodds sell his property to some other
person (though notice was not communicated by
Dodds).
2. By Lapse of Time
Acc to sec. 6(2) A proposal is revoked –
by the lapse of the time prescribed in such proposal
for its acceptance, or, if no time is so prescribed, by
the lapse of a reasonable time, without
communication of the acceptance;
Reasonable time
A reasonable time may differ in different cases or situations.
No straight jacket formula is there to count reasonable time.
In Ramsgate Victoria Hotel co. V. Montefiore (1866)
Montefiore made an offer to purchase shares in the plaintff’s
co. in june.
This offer was accepted by the co. in november.
It was held that the offer had lapsed as the same had not been
accepted within a reasonable time. So defendant is not bound
to take the shares.
Revocation of offer before the time prescribed
If time is prescribed under any offer for it
acceptance, offeror is not bound to observe that
time strictly, he is free to withdraw his offer even
before the time so prescribed.
Eg: A made an offer to B on 1st of November 2013
and mentioned that this offer can be accepted
before 1st of December 2013. A is not bound to
observe the period one month, he can withdraw his
offer even before 1st of december 2013.
By failure to fulfil a condition precedent
If an offer is subject to some condition precedent,
such condition has got to be fulfilled by the
acceptor before making the acceptance.
Eg: if acceptor is required to deposit any earnest
money he must deposit the same otherwise failure
in this regard may lead to lapse of the offer.
State of M.P. v. Gobardhan das (1973)
Tender for sale of certain goods were invited
subject to the condition that 25% amount to be paid
when the tender was accepted.
Gobardhan das’s tender was highest and same was
accepted but he failed to deposit the 25% of tender
money.
Later on he refused to take goods and to pay for
them.
Whether he is bound to take the goods?
Decision
Court held that deposit of 25% of tender money is
condition precedent to the acceptance, failure to
which lead to the lapse of offer and there arises no
contract between the parties, so he is not liable to
pay for the goods and to take those goods.
Waiver of the condition by offeror
If any condition is attached to any offer it may be waived by the
offeror and still a valid contract can be made between the parties.
In M/S. Bismi Abdullah &sons v. The Regional Manager FCI,
Trivendrum (1987)
FCI invited some tender with a condition, “ tenders not
accompanied by the security money are liable to be rejected
summarily”
Appellant did not deposit any security money but his tender was
accepted and communicated to him.
It was held that offeror can waive any condition attached to
offeror, so in this case a valid contract arises between the parties.
By Death or insanity of the offeror
An offer is revoked by the death or insanity of the
offeror if the fact of his death or insanity comes to
the knowledge of offeree.
It means that death of insanity does not
automatically revoked the offer unless it is
communicated to the offeree.
if fact of death or insanity has not come to the
knowledge and offeree accepted the offer, it arises
contractual obligations.
Revocation of Acceptance
An acceptance can be revoked any time before it is
communicated to the offeror.
Sec. 5 gives that An acceptance may be revoked at
any time before the communication of the
acceptance is complete as against the acceptor, but
not afterwards.
English law
Under English law once the latter of acceptance is
posted to the offeror both parties become liable to
each other and acceptance can not be revoked.
