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In
previous article we discussed about offer and acceptance.
In this edition, lets discuss about revocation of offer.
Revocation
means "cancellation". Revocation of an offer means its withdrawal
by the offeror. An offer may be revoked at any time before
the offeree accepts it. Revocation of an offer means after
acceptance will be ineffective. If it to be effective, it
must be communicated before the dispatch of the letter of
acceptance. Section
5 lays down "a proposal may be
revoked at any time before the communication of its acceptance
as against the proposer". An offer is made irrevocable
by acceptance. Revocation may be express or implied.
For example, Mr. Sunil proposes to Mr. Sridhar that
he will sell his car. Mr. Sunil can revoke his offer before
Mr. Sridhar posts his letter of acceptance.
Modes
of revocation:
Section 6 describes various modes of revocation of
offer. An offer may be revoked in any of the following ways;
1.
By communication of notice:
An offer may be revoked by the offeror by giving a notice
of revocation to the other party before it is accepted.
Notice of revocation will take effect only when it comes
to the knowledge of the offeree.
For example, A offers his house to B for Rs.100000.
Before B accepted the offer, A withdrew his offer by informing
B. There will be no contract as the offer has been revoked
before its acceptance.
2.
By lapse of time:
If time is prescribed for acceptance, the offer gets revoked
by non-acceptance within that time. If no time is fixed,
the offer lapses by the expiry of a reasonable time. In
a celebrated case, M applied for shares on 28th June. But
shares were allotted on 23rd November. M, therefore, refused
to take the shares. The Court held that M was entitled to
refuse as the offer had lapsed by delay in acceptance.
3.
By non-fulfillment of conditions:
An offer is revoked when the acceptor fails to fulfill a
condition precedent to the acceptance of the offer.
For example, A offers to sell certain goods to B
on a condition that B pays a certain amount before a certain
date. If B fails to pay the required amount within the given
time, the offer stands revoked.
4.
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 of the offeror, if
the fact of his death or insanity comes to the knowledge
of the acceptor before acceptance.
Under English Law, death of the offeror revokes an offer
even if acceptance is made in ignorance of the death.
5.
By counter-offer:
An offer is revoked if a counter-offer is made to it.
For example, A offers his watch to B for Rs.500.
B instead of saying yes, offers only Rs.350. A's offer is
revoked and there is no contract.
6.
By failure to accept in the mode prescribed:
An offer must be accepted according to the mode prescribed.
If no mode is prescribed, the acceptance must be according
to some usual or reasonable mode. If the offer is not accepted
according to the prescribed or usual mode, the offer lapses
provided the offeror gives notice to the offeree within
a reasonable time that the acceptance is not according to
the mode prescribed. If the offeror fails to do so, he is
deemed to have accepted the acceptance.
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