Revocation of an Offer under the Indian Contract Act, 1872
Revocation of an offer means withdrawing or cancelling an offer before it is accepted. Acceptance can also be revoked under certain circumstances.
Under the Indian Contract Act, 1872, an offer and acceptance form the basis of a contract. An offer is a proposal made by one party to another, expressing a willingness to enter into a contract on specific terms. Acceptance is the agreement of the other party to the terms of the offer.
The Indian Contract Act provides for the following provisions regarding revocation of offer and acceptance.
Revocation of offers and acceptances under Section 5
Section 5 of the Indian Contract Act, 1872 deals with the communication, acceptance, and revocation of proposals (offers). This section lays down certain rules for the communication, acceptance, and revocation of proposals, which are essential for the formation of a valid contract.
Revocation of proposal
A proposal may be revoked at any time before the communication of its acceptance is complete. The revocation of a proposal is complete when it comes to the knowledge of the person to whom the proposal was made. It can be done by the proposer himself or through his authorized agent.
However, the revocation must be communicated to the offeree in a reasonable manner and before the acceptance is complete. Once the acceptance is complete, the proposal cannot be revoked.
Revocation of acceptance
An acceptance may be revoked by the acceptor at any time before the communication of the acceptance is complete. The revocation must be communicated to the proposer in the same manner as the acceptance. If the acceptance has already been communicated, the revocation will not be effective.
Modes of Revocation of an Offer
Section 6 of the Indian Contract Act, 1872 deals with the revocation of an offer. It lays down the various modes of revocation of an offer, which are as follows:
Revocation by communication from the offeror to the offeree before acceptance
An offer can be revoked by the offeror at any time before it is accepted by the offeree. The revocation must be communicated by the offeror to the offeree. If the offeror fails to communicate the revocation, the offer remains valid and can be accepted by the offeree.
Revocation by lapse of time
An offer lapses if it is not accepted within the time specified in the offer or, if no time is specified, within a reasonable time. The determination of a reasonable time depends on the facts and circumstances of each case. Once the offer has lapsed, it cannot be accepted.
Revocation by the failure of a condition precedent
An offer can be revoked if it is subject to a condition precedent, and the condition precedent does not occur. For example, if an offer is made on the condition that the offeree obtains a license, and the offeree fails to obtain the license, the offer is revoked.
Revocation by death or insanity of the offeror
An offer is automatically revoked if the offeror dies or becomes insane before the offer is accepted. In such cases, the offeree cannot accept the offer.
It is important to note that the revocation of an offer must be communicated to the offeree before acceptance. If the offeree accepts the offer before receiving the revocation, the contract is formed, and the offeror cannot revoke the offer.
Furthermore, an offer cannot be revoked if it has been accepted by the offeree and the parties have entered into a contract. Once a contract is formed, it can only be terminated by the methods provided for in the contract or by the Indian Contract Act, of 1872.
In conclusion, Section 6 of the Indian Contract Act, 1872 lays down the modes of revocation of an offer, which are revocation by communication from the offeror to the offeree before acceptance, revocation by lapse of time, revocation by failure of a condition precedent, and revocation by death or insanity of the offeror.
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