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Communication of Offer, Acceptance & Revocation in Contracts | Legal Reasoning for CLAT PDF Download

Introduction

As mentioned earlier that in order to be a valid offer and acceptance.

  • the offer must be communicated to the offeree, and
  • the acceptance must be communicated to the offeror.

Similarly, revocation of offer by the offeror to the offeree and revocation of the acceptance by the offeree to the offeror must be communicated.

Communication of a proposal

According to Section 4, the communication of a proposal is complete when it comes to the knowledge of the person to whom it is made.

Example-

  • A proposes by letter, to sell a house to B at a certain price. The communication of the proposal is complete when B receives the letter.

Communication of a Acceptance

The completion of communication of acceptance has two aspects, viz:

  • as against the proposer, and
  • as against the acceptor.

The communication of acceptance is complete:

  • as against the proposer, when it is put into a course of transmission to him, so as to be out of the power of the acceptor;
  • as against the acceptor, when it comes to the knowledge of the proposer.

Example-
A proposes, by letter, to sell a house to B at a certain price. B accepts A’s proposal by a letter sent by post. The communication of acceptance is complete:
(i) as against A, when the letter is posted by B;
(ii) as against B, when the letter is received by A.

Communication of a Revocation

The communication of a revocation (of an offer or an acceptance) is complete:

  • as against the person who makes it, when it is put into a course of transmission to the person to whom it is made, so as to be out of the power of the person who makes it.
  • as against the person to whom it is made when it comes to his knowledge.

Example-

  • A proposes by letter, to sell a house to B at a certain price. B accepts the proposal by a letter sent by post.
  • A revokes his proposal by telegram. The revocation is complete as against A, when the telegram is despatched. It is complete as against B, when B receives it.
  • B revokes his acceptance by telegram. B’s revocation is complete as against B, when the telegram is despatched, and as against A, when it reaches him.

Revocation of Proposal and Acceptance

  • Section 5 provides that a proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards.
  • Also an acceptance may be revoked at any time before the communication of the acceptance is complete as against the acceptor, but not afterwards.

Example-

  • A proposes, by a letter sent by post, to sell his house to B. B accepts the proposal by a letter sent by post.
  • A may revoke his proposal at any time before or at the moment when B posts his letter of acceptance, but not afterwards.
  • B may revoke his acceptance at any time before or at the moment when the letter communicating it reaches A, but not afterwards.

Revocation of Proposal 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. Also an acceptance may be revoked at any time before the communication of the acceptance is complete as against the acceptor, but not afterwards.

Example-

  • A proposes, by a letter sent by post, to sell his house to B. B accepts the proposal by a letter sent by post.
  • A may revoke his proposal at any time before or at the moment when B posts his letter of acceptance, but not afterwards.
  • B may revoke his acceptance at any time before or at the moment when the letter communicating it reaches A, but not afterwards.

Contracts over Telephone or Telex

  • Persons may enter into contracts either: (1) when they are face to face, or (2) over telephone or telex, or (3) through post office. When persons are face to face, one person making the offer and the other accepting it, the contract comes into existence immediately.
  • Similarly, in the case of conversation over telephone, the contract is formed as soon as then offer is accepted but the offeree must make it sure that his acceptance is received by the offeror, otherwise there will be no contract, as communication of acceptance is not complete.
The document Communication of Offer, Acceptance & Revocation in Contracts | Legal Reasoning for CLAT is a part of the CLAT Course Legal Reasoning for CLAT.
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FAQs on Communication of Offer, Acceptance & Revocation in Contracts - Legal Reasoning for CLAT

1. What is an offer in a contract?
Ans. An offer in a contract refers to a specific proposal made by one party to another, expressing the intention to enter into a legally binding agreement. It must contain clear and definite terms, including the price, quantity, and subject matter of the contract.
2. Can an offer be revoked?
Ans. Yes, an offer can be revoked by the party who made the offer at any time before it is accepted by the other party. However, the revocation must be communicated effectively to the other party for it to be valid.
3. What is acceptance in a contract?
Ans. Acceptance in a contract occurs when the offeree agrees to all the terms and conditions of the offer made by the offeror. It creates a legally binding agreement between the parties involved.
4. Can an offer be accepted by silence?
Ans. Generally, an offer cannot be accepted by silence. The offeree must communicate their acceptance explicitly to the offeror. However, there are exceptions to this rule, such as in cases of previous dealings between the parties or when the offeror has indicated that silence will be considered as acceptance.
5. What are the consequences of revoking an offer after acceptance?
Ans. Once an offer is accepted, a contract is formed, and revoking the offer becomes a breach of contract. The party who accepted the offer can seek legal remedies, such as damages, to compensate for any losses incurred due to the revocation.
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