Revocation means withdrawal of the offer. Whenever an offer/ proposal is taken back by the offeror, it is a revocation of an offer. If acceptance is withdrawn, it is a revocation of an acceptance.
When both parties accept the respective offer and form a contract then they are bound by their respective promises. After the contract acceptance it cannot be revoked. Before accepting the offer, the offer can be revoked.
According to Law of Contract Section 5: Revocation of proposals and acceptances:
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 no afterwards.
Different modes of revocation:
According to Law of Contract Section 6 mentions various modes of revocation.
A proposal is revoked-
1) By the communication of notice of revocation by the proposer to the other party;
Before the acceptance of an offer it can be revoked at any time as it has no legal obligations. A proposal is revoked by the communication of notice of revocation by the proposer to the other party. A notice of revocation shall be done by the proposer itself and not by any other person. It’s the effective way to revocation.
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;
If the proposer has mentioned a specific period of time limit for the acceptance of proposal, then the proposal lapses after the expiry of reasonable time. If the proposer has not mentioned time for the acceptance of proposal, then the proposal lapses after the expiry of reasonable time. Reasonable time will depend on the facts and cases.
3) by the failure of the acceptor to fulfill a condition precedent to acceptance; or
Before the acceptance of the offer, when the precedent offers has certain conditions to fulfill to consider as accepted offer, but when the acceptor fails to fulfill the condition provided by the precedent the offer gets revoked.
4) 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 gets lapses after the death or insanity of the offeror, when it comes to knowledge before making acceptance. If the offeror makes acceptance without the knowledge of the death or insanity the acceptance is considered as valid.
Other Modes of Revocations:
5) Revocation by counter offer/ Revocation by cross offer:
If the offeror offers a counter or cross offer the original offer automatically comes to an end.
6) Revocation by subsequent illegality:
If the offer is subsequently illegal then the offeree offer gets revoked automatically.
7) Revocation by refusal/ rejection by the offeree:
When an offeree rejects the offer, then he cannot accept it. Revocation of such can happen orally or written or through conditional acceptance.
1. In the famous case decided by Madras High Court Alfred Schonlank V. Muthunayna Chetti (1892), it was held that before the acceptance if a proposal is revoked then there is no Contract.
2. Hyde Vs Wrench, 1840.
The defendant offered to sell an estate to the plaintiff for Rs.950, which was refused by the defendant. Finally, the plaintiff prepared to pay Rs.1000, but the defendant refused to sell the estate. It was held that counter offers revoked the original offer and there existed no contract.
Revocation of offer and acceptance can be done through different modes of revocation as per Section 6 of Law of Contract. Revocation cannot be done or can’t happen when the offer or acceptance is accepted and a contract is formed as per Section 5 of Law of Contract.
This article is written by Kshitija Sarode of Vidya Pratishthan Vasantrao Pawar Law College, Baramati.