Revocation of an Offer under the Indian Contract Act, 1872 | Law Optional Notes for UPSC PDF Download

Revocation of Offer and Acceptance

• An offer is a proposal indicating a willingness to enter a contract on specific terms.
• Acceptance is the agreement of the other party to the terms of the offer.

Provisions under the Indian Contract Act, 1872

• The Indian Contract Act, 1872 governs the formation and enforcement of contracts in India.
• It establishes rules and regulations concerning offer, acceptance, and revocation in contract law.

Revocation of Offers under Section 5

Section 5 of the Indian Contract Act, 1872 outlines rules for communication, acceptance, and revocation of proposals.

Revocation of Proposal

• A proposal can be revoked before acceptance is communicated to the offeree.
• Revocation is effective when it reaches the offeree and must be done in a reasonable manner.
• Once acceptance is complete, the proposal cannot be revoked.

Revocation of Acceptance

• An acceptor can revoke acceptance before it is communicated to the proposer.
• The revocation must be communicated in the same manner as the acceptance.
• If acceptance has been communicated, revocation is not valid.

Revocation of an offer involves withdrawing or canceling an offer before it is accepted, while acceptance can be revoked under specific conditions. In the Indian Contract Act, 1872, an offer and acceptance are fundamental to contract formation. An offer is a proposal by one party to another, expressing readiness to contract on specific terms, while acceptance is agreeing to the offer's terms.

The Act details rules for offer and acceptance revocation. Section 5 governs communication, acceptance, and revocation of proposals, crucial for valid contract formation. A proposal can be revoked before acceptance is fully communicated, effective upon reaching the offeree. Revocation must be reasonable and communicated effectively. Once acceptance is complete, revocation is invalid.

Similarly, acceptance can be revoked by the acceptor before being communicated to the proposer. The revocation must match the acceptance method. If acceptance is already communicated, revocation is ineffective.

Modes of Revocation of an Offer

• Revocation by communication from the offeror to the offeree before acceptance: An offer can be withdrawn by the person making the offer at any time before the other party accepts it. The withdrawal needs to be clearly communicated for it to be effective. For instance, if you offer to sell your bike to a friend and later change your mind, you must inform your friend before they agree to buy the bike.
• Revocation by lapse of time: If an offer is not accepted within the specified time frame or within a reasonable period if no specific time is mentioned, the offer is considered expired. This means that the offeree can no longer accept the offer. For example, if you offer to sell a product online and state that the offer is valid for 7 days, the offer lapses if the buyer does not accept within that time.
• Revocation by the failure of a condition precedent: Sometimes, an offer is made based on a specific condition that must be met for the offer to remain valid. If the condition is not fulfilled, the offer is automatically withdrawn. For instance, if you offer to hire someone on the condition that they pass a certain exam, and they fail the exam, the offer is revoked.
• Revocation by death or insanity of the offeror: If the person making the offer passes away or becomes mentally incapacitated before the offer is accepted, the offer is no longer valid. In such cases, the other party cannot accept the offer. For example, if a landlord offers to rent an apartment to a tenant but passes away before the tenant accepts, the offer is revoked.

It is crucial to remember that revocation of an offer must be communicated to the offeree before they accept it. Once the offeree accepts the offer, a contract is formed, and the offeror cannot revoke the offer. Once a contract is in place, it can only be terminated as per the terms of the contract or as prescribed by the Indian Contract Act of 1872.

Section 6 of the Indian Contract Act, 1872

Modes of Revocation of an Offer:

• Revocation by Communication: Occurs when the offeror communicates the revocation to the offeree before acceptance. This can be done through various means such as email, phone call, or letter.
• Revocation by Lapse of Time: When the offer is not accepted within a specified period, it is considered revoked due to the expiration of time.
• Revocation by Failure of a Condition Precedent: If a specific condition outlined in the offer is not met, the offer can be revoked.
• Revocation by Death or Insanity of the Offeror: In cases where the offeror passes away or becomes mentally incapacitated, the offer is automatically revoked.

Conclusion

Section 6 of the Indian Contract Act, 1872 details the methods of revocation of an offer, including communication, lapse of time, failure of condition precedent, and death or insanity of the offeror.