RAJIV GANDHI NATIONAL UNIVERSITY OF LAW

PATIALA, PUNJAB

Definition and Essentials of a Valid Acceptance and Revocation

SUBMITTED TO- SUBMITTED BY-

Dr. Sangeeta Taak Pushpendra Sharma
(Assistant Professor (19016)
Of Law) GROUP: 4
Subject-Law of Contracts-I

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 Acknowledgement

I would like to take this opportunity to express my profound gratitude and deep regard to Dr
Sangeeta Taak (Assistant Professor of English) for her guidance and valuable feedback and constant
support throughout the duration of project. Her suggestions were of monumental help in the rough
work of my project.

I would also like to express my gratitude to Rajiv Gandhi National University of Law, Patiala for
giving me the topic that enriched my knowledge. I also like to thank the library staff for constant
support.

Lastly I am thankful to my parents and friends for their constant support and coordination in the
completion of the research work.

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 Certificate of Submission

This is to certify that this project is submitted to Rajiv Gandhi National University of Law, Patiala
in partial fulfilment of the requirement of the B.A. LLB (Hons.) course. It is an original and bona-
fide research work carried under my supervision and guidance. No part of this project has been
submitted to any University for the award of any Degree or Diploma, whatsoever. 

TABLE OF CONTENTS

INTRODUCTION................................................................................................................................5
Essentials of an Acceptance.................................................................................................................7
Revocation............................................................................................................................................8
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 Notice of revocation.........................................................................................................................9
Withdrawal before the expiry of a fixed period.............................................................................10
Acceptance of proposal under the voluntary retirement scheme...................................................11
Agreement to keep the offer open for a specified period...............................................................12
Communication of revocation of the offer.....................................................................................13
Revocation of the general offer......................................................................................................13
Superseding proposal by a fresh proposal......................................................................................14
Revocation of bid...........................................................................................................................14
Lapse of time......................................................................................................................................16
Where time is prescribed................................................................................................................16
Where no time is prescribed...........................................................................................................17
By failure to accept a condition precedent.....................................................................................17
The modes of revocation of offer...................................................................................................18
Conclusion..........................................................................................................................................19
Bibliography.......................................................................................................................................20

INTRODUCTION

The Indian Contract Act defines the meaning of the term “contract” under Section 2(h). According
to the Section, a contract is an agreement enforceable by law. Thus there are two essentials to be
fulfilled for the formation of a binding contract. Firstly, there should be an agreement between two
or more contracting party and secondly, the agreement should have legal enforceability. The term

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“agreement” has been defined as every promise or every set of promises in exchange for each other
which form a set of consideration for each other. Section 2(b) defines the term “promise” as a
proposal or offer which is accepted by the offeree.
Contracts play an important role in our everyday life ranging from insurance policies to
employment contracts. In Fact, we enter into contracts even without thinking for example while
buying a movie ticket or downloading an app. Contracts are oral or written agreements between two
or more parties. Parties entering into a contract might include individual people, companies, non-
profits or government agencies. The whole process of entering into a contract starts with an offer by
one party, an acceptance by another party, and an exchange of consideration (something of
value). Let us take a look at the definition of an offer and the essentials of a valid offer.
The Indian Contract Act 1872 defines acceptance in Section 2 (b) as “When the person to whom the
proposal has been made signifies his assent thereto, the offer is said to be accepted. Thus the
proposal when accepted becomes a promise.”
So as the definition states, when the offeree to whom the proposal is made, unconditionally accepts
the offer it will amount to acceptance. After such an offer is accepted the offer becomes a promise.
Say for example A offers to buy B’s car for rupees two lacs and B accepts such an offer. Now, this
has become a promise.
When the proposal is accepted and it becomes a proposal it also becomes irrevocable. An offer does
not create any legal obligations, but after the offer is accepted it becomes a promise. And a promise
is irrevocable because it creates legal obligations between parties. An offer can be revoked before it
is accepted. But once acceptance is communicated it cannot be revoked or withdrawn.
A revocation of offer is the withdrawal of a previous offer to engage in some sort of legally binding
contract.3 min read
A revocation of offer is the withdrawal of a previous offer to engage in some sort of legally binding
contract. The previous offer had to have been such that it would have immediately become legally
binding if the other party had formally agreed to it.
Revocation of offer is used by the offering party to formally cancel the offer before the other party
has accepted it. The offering party must communicate the revocation to the other party before they
accept the offer, but once the revocation has been communicated the offer it pertains to is no longer
considered valid and cannot legally be accepted. Revocation goes into effect as soon as it has been
communicated to the relevant party. A core ruling defining revocation of offers was established by
Payne v. Cave. This case established that neither party is bound to an agreement until an offer has
been made by one and formally accepted by the other.

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If an offer has been made, the offering party has a right to withdraw it up to formal acceptance by
the offeree. Revocation basically serves as formal, legally verifiable notice that a withdrawal was
made, and it's valid so long as it is communicated to the offeree before they accept.
The case of Byrne v. Van Tienhoven supports this by establishing that the withdrawal of an offer by
telegram is only valid if the telegram is received before the offer is accepted. The case of Dickinson
v. Dodds further establishes that the party making the offer can communicate the revocation
through a third party.
In legal terminology Revocation of Acceptance refers to the following
Proposer makes an offer.
Acceptor accepts the same and communicates the same to the proposer.
Acceptor revokes/cancels this acceptance before the communication reaches the proposer.
The Revocation of Acceptance is complete ONLY at any time before the communication of
acceptance is complete as against the acceptor, but not afterwards. Revocation of Acceptance too
can be either oral or written. Acceptance has to be revoked mandatorily before the same reaches the
Offerer.
Examples are the best way to understand these concepts. So let us look at a few scenarios which
shall make the concept of ‘Revocation of Acceptance’ clearer. The Indian Contract Act, 1872 was
created an amended at regular intervals. But technology and its speed has still not paved its way
inside the law. With technological advancements, situations are not as simple as a post, a telegram,
or a fax. It is easy to compare the timelines of the same but with business going totally on emails
and messages; it has become very difficult to understand the same. It is difficult because technology
has become as fast as the speed of lightning. The difference between one party sending out an
email/smart-phone message and the counter-party receiving the same is mere Nano-seconds.
Moreover, the party receiving the communication can claim that they have not opened the
post/email/message.1

Essentials of an Acceptance

1] Acceptance can only be given to whom the offer was made

In the case of a specific proposal or offer, it can only be accepted by the person it was made to. No
third person without the knowledge of the offeree can accept the offer.

1
https://www.toppr.com/guides/business-laws/indian-contract-act-1872-part-i/acceptance

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Let us take the example of the case study of Boulton v. Jones. Boulton bought Brocklehurst’s
business but Brocklehurst did not inform all his creditors about the same. Jones, a creditor of
Brocklehurst placed an order with him. Boulton accepted and supplied the goods. Jones refused to
pay since he had debts to settle with Brocklehurst. It was held that since the offer was never made to
Boulton, he cannot accept the offer and there is no contract.
When the proposal is a general offer, then anyone with knowledge of the offer can accept it.2

2] It has to be absolute and unqualified

Acceptance must be unconditional and absolute. There cannot be conditional acceptance, that would
amount to a counteroffer which nullifies the original offer. Let us see an example. A offers to sell
his cycle to B for 2000/-. B says he accepts if A will sell it for 1500/-. This does not amount to the
offer being accepted, it will count as a counteroffer.
Also, it must be expressed in a prescribed manner. If no such prescribed manner is described then it
must be expressed in the normal and reasonable manner, i.e. as it would be in the normal course of
business. Implied acceptance can also be given through some conduct, act, etc.
However, the law does not allow silence to be a form of acceptance. So the offeror cannot say if no
answer is received the offer will be deemed as accepted.

3] Acceptance must be communicated

For a proposal to become a contract, the acceptance of such a proposal must be communicated to
the promisor. The communication must occur in the prescribed form, or any such form in the
normal course of business if no specific form has been prescribed.
Further, when the offeree accepts the proposal, he must have known that an offer was made. He
cannot communicate acceptance without knowledge of the offer.So when A offers to supply B with
goods, and B is agreeable to all the terms. He writes a letter to accept the offer but forgets to post
the letter. So since the acceptance is not communicated, it is not valid.

4] It must be in the prescribed mode

Acceptance of the offer must be in the prescribed manner that is demanded by the offeror. If no
such manner is prescribed, it must be in a reasonable manner that would be employed in the normal
course of business.
2
https://www.upcounsel.com/revocation-of-offer

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But if the offeror does not insist on the manner after the offer has been accepted in another manner,
it will be presumed he has consented to such acceptance.
So A offers to sell his farm to B for ten lakhs. He asks B to communicate his answer via post. B e-
mails A accepting his offer. Now A can ask B to send the answer through the prescribed manner.
But if A fails to do so, it means he has accepted the acceptance of B and a promise is made.

5] Implied Acceptance
Section 8 of the Indian Contract Act 1872, provides that acceptance by conduct or actions of the
promisee is acceptable. So if a person performs certain actions that communicate that he has
accepted the offer, such implied acceptance is permissible. So if A agrees to buy from B 100 bales
of hay for 1000/- and B sends over the goods, his actions will imply he has accepted the offer.3

Revocation

Every contract is an agreement but not every agreement is a contract. An agreement becomes a
contract when the following conditions are fulfilled:
There should be some consideration in exchange for both the offer and acceptance by the parties to
the contract;
The parties entering into a contract must be competent to enter into it. The competency of parties to
enter into parties has been discussed under Section 11 and Section 12;
The consent of the parties to the contract should be free and should not be vitiated by any of the
vitiating factors mentioned under Section 19;
The object of entering into the contract should be lawful.
The dictionary meaning of “Revocation” is annulling any work which was previously done. In the
law of contract, a contract is entered into between two or more parties when one party makes an
offer to another with a view to obtaining the assent of the other party to the offer and once the offer
of the person is accepted a valid contract is entered. However, the parties to a contract are at the
liberty of revoking both offer and acceptance at a later point of time. The procedure and the rules of
revocation are laid down under Section 5 of the Contract Act. Revocation is a way of termination of
the offer. There are three ways of termination of an offer, the three of them are mentioned below:

3
https://www.advocatekhoj.com/library/bareacts/indiancontract/5.php?Title=Indian%20Contract%20Act,
%201872&STitle=Revocation%20of%20proposals%20and%20acceptances

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Notice of revocation

Section 5 of the Indian Contract Act, 1872 provides that any proposal can be revoked by the offeree
at any time before the communication of acceptance is complete as against the offeror and not
afterwards. The communication of acceptance is complete as against the offeror or the proposer
when the acceptance is put in the course of transmission to him and it becomes out of the control of
the acceptor. Therefore, in case of communication of acceptance by electronic mail, the
communication of revocation to have the effect must reach the offeree before he mails his
acceptance thus making it out of his control. It is important that the revocation in order to be
effective should be brought into the notice of the person to whom it is made.

In Henthorn v. Fraser, Mr Fraser who was the defendant handed over a note to the complainant
which detailed an option for the sale of the property at 750 euros with the condition that the
acceptance should be conveyed within fourteen days of such offer. While this offer was considered
another buyer approached the defendant and the defendant concluded the contract with him instead.
The very next day the defendant informed the plaintiff about the withdrawal of the offer. The note
reached the plaintiff after 5 pm and by that time Mr Henthorn had already responded positively to
the offer unconditionally at the price which was offered by the defendant. However, the acceptance
did not reach the defendant until the next morning and the defendant did not read the acceptance till
the very next day when the acceptance reached the defendant. The court, in this case, held that the
postal rule laid down by the court in Adam v. Lindsell will apply according to the rule it is
reasonable for the offer to take place by post. However, this rule is inapplicable to revocation of the
offer. The post was a way to communicate the offer to the offeree but the acceptance is completed
at the moment it is posted so as to be out of the control of the offeree. Practically the rule was a
reasonable one keeping in view the fact that the two parties stayed at different towns.
Thus, it is a settled principle that the notice of revocation by the offeror should reach the offeree
before he has put the acceptance into the course of transmission which shall then become out of his
power. The above principle is further clarified by the illustration which is attached to Section 5. ‘A’
by means of a letter proposes ‘B’ his house which was for sale. B accepts the proposal by the means
of acceptance sent through a post. In this case, A can revoke his offer at any time before or at the
time when B posts his letter of acceptance.
Section 4 and 5 contains the provisions related to the communication of proposal, acceptance and
revocation. Section 4 of the Indian Contract Act states the following with respect to the time when
communication is complete:

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The communication of a proposal is complete when the same comes to the notice of the person to
whom it is addressed to;
The communication of acceptance as against the proposer is complete when it is put in the course of
transmission addressed to him;
The communication of acceptance as against the acceptor or the offeree is complete when the
acceptance comes to the knowledge of the offeror or proposer;
The communication of revocation is complete as against the person who makes such revocation
when it is out in the course of transmission to the person to whom it is addressed so as to be out of
the power of the person making such revocation;
The communication of revocation is complete as against the person to whom it is made when such
communication comes to his knowledge.
Section 5 of the Indian Contract Act contains provisions regarding the revocation of proposals and
acceptance. The Section states that the revocation of the proposal can be made at any time before
the communication of acceptance is complete as against the proposer but not afterwards. While
acceptance may be revoked anytime before the completion of communication of acceptance as
against the acceptor but the same can not be done afterwards.4

Withdrawal before the expiry of a fixed period

In a case where the offeror prescribes a certain time period to the offeree within which the offeree
can accept the offer. The offeror has the authority to withdraw the offer even before the expiry of
the prescribed time period. In Alfred Schonlank And Anr. vs A. Muthunayana Chetti, the defendant
offered the plaintiff a proposal for sale of indigo and told the plaintiff that he can answer to his
proposal within a period of eight days. However, on the fourth day from making the offer the
defendant revoked the offer. The plaintiff, on the fifth day from the day when a proposal was made
to him, accepted the offer. The Madras High Court held that the acceptance was of no use in the
eyes of laws as it can be made clear both on principle and authority that in a case where there is no
consideration for the promise to keep the offer open for a certain time period is nothing but nudum
pactum or a bare promise.
When the notice of revocation reaches the offeree’s address it is deemed to be complete. In Tenax
Steamship Co v Owners of the Motor Vessel Brimnes, the defendant company owned a ship called
Brimnes. The defendants agreed to sell the ship Brimnes to the complainants on the condition that a
charter party agreement will take place between them. The hire payment was made a period later

4
https://thefactfactor.com/facts/law/civil_law/contract_laws/indian_contract_act/revocation-of-offer-s-3-and-5/2571/

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than which was agreed between the parties under the terms of the contract. On one fine day, the
complainant during the normal office hours gave the defendant a notice for the withdrawal of the
ship from services through telex. However, the defendant read the letter on a later period and by
that time he had already made the payment for the ships. The question before the appellate court
was whether notice of withdrawal of service had effect before the defendant made the payment of
hire of ships. The court held that the withdrawal was effective when the telex message was received
by the defendant and not when the defendant read the message. Therefore, this case became the
authority for the reasoning that in the case where the revocation is sent through instantaneous means
like telex, the revocation becomes effective from the time on which the revocation could have been
read and not the time when it was actually read by the person to whom it was addressed to.

Acceptance of proposal under the voluntary retirement scheme

Under the Voluntary Retirement scheme, the employees were given the right to apply for voluntary
retirement by requesting the same in writing to the authorities. However, the authorities in these
cases had the complete discretion to accept or reject these requests. The requirement of the
employee who requested under the scheme could take place only once the request has been
accepted by the authorities in writing. The scheme was only an invitation to offer and the
application made by the employee was an offer made to the authorities who were therefore offeree.
The employee being the offeror could withdraw the offer anytime before the same is accepted by
the offeree. The term in the scheme preventing the employee from the withdrawal of the proposal
was held to be non-binding.
In Shashikala Parashar vs State Of Goa & Another, the employee first made the request for his
voluntary transfer but later on, he requested that the request made by him should be suspended for
some time. The Government, however, accepted the resignation. The employee aggrieved by the
government’s decision moved to the court and the court held that the request made by the employee
was a mere assertion without having any backing of proof or an affidavit. The order of Government
was like an acceptance which was made after the revocation of the proposal was made and the
request to keep the proposal in suspension was not the same as withdrawal of the proposal.

In K. Appa Rao v. M/s Tungabhadra Steel Products Ltd. & Others, the plaintiff submitted his
resignation which was accepted on 31 March 2003 the resignation was accepted. However, the
resignation offer was to take effect from 23 June 2003 which is after the expiry of the three months
of the notice period. The question before the court was that which date should be considered as the

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effective date of resignation. The court held that the effective date of resignation will be the date on
which the employee will be released and not the date of acceptance of the request made by the
employee. Meanwhile, the employee is free to withdraw his resignation.
The employer is under no obligation to accept the proposal of premature retirement and therefore no
action could lie in any court of law where the employee has refused to accept such proposal. In
Visakhapatnam Port Trust & Others v/s T.S.N. Raju & Another, a large number of employees in a
company filed an application for voluntary retirement. However, the company decided that it would
not entertain all the application as the number of retirements that the company could afford had
already been exhausted. The Court held that the employer could not be necessarily bound to accept
all the application for resignation.
In New India Assurance Co. Ltd vs Raghuvir Singh Narang & Anr, the general principles of
contract provided that once an employee has made an application for the resignation under the
voluntary retirement scheme he could not withdraw the same at any time afterwards. The court held
that the terms of the statutory scheme guaranteeing voluntary retirement would prevail over the
general principles of law.5

Agreement to keep the offer open for a specified period

Where the offeror proposes an offer to be open for a specified period of time and it is accompanied
by a consideration. The offeror has no discretion to withdraw the offer before the completion of the
specified period. In Mountford and another v.Scott, the owner of the house who was the defendant
is essential that the communication of revocation should be made by the offeror himself or any
agent who is duly authorized by him. This rule does not apply in England. In England, Dickinson v.
Dodds is the authority on this matter, in this case, the defendant made an offer to the plaintiff for the
sale of the property at a fixed price and the terms of the proposal also made it clear that the offer
could be accepted by the plaintiff within a specified time period. However, before the expiration of
the specified time, the plaintiff was informed by a party that the offer has already been revoked as
the defendant has already sold the property to some other person. Despite knowing the fact that the
property which was offered to him the plaintiff before the expiration of the offer gave a letter of
acceptance of an offer to the defendant. The court, In this case, the court held that the offer can be
revoked anytime before the acceptance by the offeree is made and that the sale to the third party
was already in knowledge of the plaintiff and so the plaintiff already knew that the defendant was

5
https://www.lawyerservices.in/Indian-Contract-Act-1872-SECTION-5-Revocation-of-proposals-and-acceptances

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not minded to sell the property to him and therefore the acceptance by the plaintiff at a later point of
time when the property had already been transferred to the other party has no value in the eyes of
law.
The defendant in the present case made an offer to the plaintiff for the sale of his house for ten
thousand pound and the offer was made for specified time and was backed by consideration
according to which the plaintiff had the option of paying one pound to keep the offer of the
defendant open for a specified time period. The court, in this case, held that after the plaintiff
deposited one pound to the defendant, the defendant was not allowed to revoke the offer before the
expiry of the specified period as the effect of the offer made it irrevocable for the specified time and
therefore the offeree is free to accept the offer within the specified time notwithstanding the offerors
purported revocation.
In State Of Haryana & Ors vs M/S Malik Traders, the bid security was accompanied with a
condition that the bid security can not be forfeited by the bidders in case of withdrawal of the bid
before the expiry of its validity period. However, the court rejected the conditions put by the
authorities organizing the bid by holding them to be invalid and held that the withdrawal of bid
before the end of the validity period even before the acceptance did not put an end to the right of the
offeree to forfeit the bid security.

Communication of revocation of the offer

In India, as suggested by Pollock and Mulla, this rule has no applicability and reason behind it is the
Section 6(1) of the Indian Contract Act, 1872 which mandates that the revocation could be made
only by the offeror and no other person.

Revocation of the general offer

In the case where the offer of general nature is made known to the people through any media, the
withdrawal of the offer should be conveyed through the same media. The revocation so made would
be effective even where any person in ignorance of the revocation subsequently performs the term
of the offer which has already been withdrawn.6
In Shuey v. United States, an announcement was published in the newspaper announcing reward
for the person who reports certain criminals. However, this announcement was subsequently
withdrawn by publishing a subsequent notification. The plaintiff in this case, after the notification
was revoked reported the criminals in ignorance of the subsequent publication in the newspaper.

6
https://www.trans-lex.org/602550/_/the-indian-contract-act-1872%C2%A0
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The person reporting the crime was held not to be eligible for the reward price as the announcement
was withdrawn through the same channel through which it was published.

Superseding proposal by a fresh proposal

In a case where the proposal is renewed not in entirety but in some parts before the acceptance is
made to the original offer and the latter appears to supersede the earlier proposal. Then such a
proposal will no longer be available for acceptance by the offeree. The acceptance could only be of
the renewed part which has superseded the earlier or original proposal.
Cancellation of allotment of land
In Rochees Hotels Pvt. Ltd. And Anr. vs Jaipur Development Authority, under the order of a
Development Authority, an allotment of land was made. The people to whom the allotment was
made deposited the money and signed the agreement as a result of which a concluded came into
effect between the allottees and the authorities who made the allotment of the land. The subsequent
cancellation made by the authorities was challenged by the allottees in the court. The court held the
subsequent cancellation of the allotment as improper and arbitrary. It was held that the authorities
were bound by the obligation to approve building plans for the land. The pending criminal
investigations regarding the allotment of land were irrelevant.

Revocation of bid

In a case where the agreement is entered into by auction. The acceptance to the agreement is
signified by knocking down the hammer by the seller. A bid can be withdrawn before the hammer is
knocked down by the seller. In The Rajah Of Bobbili vs Akella Suryanarayana Rao Garu, the
petitioner at an auction made the highest bid. But before the hammer was knocked down he
withdrew his bid on finding that the property was subject to a mortgage. But even after the
retraction was made by the bidder the auctioneer knocked down the offer signifying the assent to
the offer made by the plaintiff. Later on, the owner of the property sued the bidder. The court, in
this case, held that the bid made by the plaintiff was nothing more than an offer and he had the
discretion of withdrawing the same before his offer was accepted by the auctioneer.
The principle laid down in the above-mentioned case has been significantly extended by the High
Courts in the subsequent cases which included even those cases where the bid was provisionally
accepted and was subjected to further confirmation by the higher authorities.
In Union Of India & Ors vs M/S. Bhim Sen Walaiti Ram, in a public auction the highest bid was
made by the plaintiff and therefore he got the liquor shop which was there for auction. The bid was
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subject to the consideration of the Chief Commissioner who had the duty to inquire into the
financial condition of the bidder before granting him the license. According to the rules of the
auction which was conducted the bidder was under the obligation to immediately pay the one-sixth
price of the liquor shop immediately. If he defaults in paying the said amount, the Government had
the power to can such bid and re-auction the shop. In this case, the plaintiff was unable to pay the
amount which was specified and as a result of which the Chief Commissioner ordered the resale.
The subsequent resale proved to be a loss for the Government since the price bidding realized in
resale was much less than the original bidding. The authorities decided to make the defendant liable
for making good the losses suffered by the authorities. The court, in this case, held that the
defendant is not liable to make good of the losses suffered due to the resale of the shop as the Chief
Commissioner had disapproved the bid made by the defendant.
In Haridwar Singh vs Bagun Sumbrui, a forest by way of the auction was given to the bidder
even below its minimum price. The confirmation of the bill was still in the process while the bidder
offered to pay the minimum value. The authorities who were holding the bill accepted it and by the
way of telegram sent their acceptance to the forest officers for carrying on further transactions. The
foreign officer due to some reasons never received the said telegram. Meanwhile, another person
offered a higher price for the forest and the same was accepted by the authorities holding the
auction. Later on, the authorities informed the forest officials about the acceptance. The acceptance
reached the forest officer this time and he passed on the bid to the new bidder. The earlier bidder
challenged the passing of bid. The court held that there was no concluded contract from the original
bid since the acceptance which was made by the authorities on the earlier bill will be considered to
be still present within the authorities as no communication as to their acceptance was ever made to
the earlier bidder.
The auctioneer has the authority to specify the manner in which the bids can be revoked by the
bidders.
In M. Lachia Setty & Sons Ltd. Etc. Etc vs The Coffee Board, Bangalore, one of the auction
rules in the present case specified that any instructions or bids by means of telegraph will not be
accepted. The defendant made his bid on the spot by filing the bid form. However, before the result
of the bid were to announce the defendant revoked his bid by means of telegraphic communication.
But the bid by the defendant was accepted by the auctioneer. The defendant later refused to perform
the bid on the grounds that he had already communicated his revocation. The court, in this case,
held that the express mentioning by the auctioneer of no entertainment of any telegraphic
communication with respect to instruction or anything pertaining to bidding was wide enough to

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include within its ambit revocation as well. Therefore, the revocation made by the defendant is not a
good revocation under law.

Lapse of time

Where time is prescribed

Where in a contract, a fixed time has been prescribed to the offeree to communicate the acceptance,
the offeree is bound to accept the offer within the fixed time so prescribed because after the expiry
of the fixed time the offer lapses. With regard to this facet of contract law, the Calcutta High Court
has suggested that in a case where the offeree has to communicate his acceptance within a specified
time and he posts his acceptance within the stipulated time period, a binding contract will be held to
have taken place between the parties. The validity of the offer by the offeree would not be affected
if the letter of acceptance so posted within the stipulated time reaches the offeror after the
completion of the specified time.

In the case of Bruner v. Moore, the offer was stipulated to last till the end of March. The offeree
posted his letter to the offeror on 28th March which reached the offeree on 30th March. The court,
in this case, held that the acceptance was valid.
In R. Vinoth Kumar vs The Secretary, the institution invited the applications for admission into
the institution for a prescribed time by sending the same either through post or in-person to the
institution. The candidate sent the application through the post before four days of the last date of
the stipulated date but the same reached the institute after the stipulated time period was over. The
court, in this case, held that the candidate was too late in sending the application. The rationale of
the majority of the two judges in the case was that where the mode of communication can be
decided by the acceptor at his free will, the agency whom the acceptor chooses acts as the agent of
the sender, whereas in cases where the delivery is made through the mode which has been
prescribed by the person to whom the delivery is addressed to, then the agency so prescribed by the
addressee acts as agent of the addressee. In the former case, the delivery to the agency does not
tantamount to delivery to the addressee. But in the latter case the delivery to the agency tantamounts
to the delivery to the addressee. The dissenting judge, in this case, upheld that when the candidate

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selects any of the mode prescribed by the addressee, then the agency which is prescribed by the
addressee would act as the agent of the addressee.

Where no time is prescribed

In the contracts where no time is specified within which the offer should be accepted it is a settled
principle that the offer must be accepted within a reasonable time. In Shree Jaya Mahal Co-
operative Housing Society Ltd. v. Zenith Chemical Works Pvt. Ltd. and others, the court held that
the determination as to what will be considered as a reasonable time would be decided by the courts
on a case to case basis keeping in view the facts and circumstances of the case. The definition of
“reasonable period” is a question of facts and it depends upon the circumstances and the situation in
which the agreement was entered into.
Contracts which involve precious materials like gold and other precious metals which are prone to
high fluctuating price then in those cases the reasonable period would be a very short span of time.
However, in contracts involving land the reasonable time period will not be the same as the time
period regarded reasonable in the contracts the precious metals.7

By failure to accept a condition precedent

Where the offer is subject to conditions precedent that is some preconditions have to be complied
with before the acceptance is made. If the acceptance is made without fulfilment of the condition
precedent then the offer lapses then and there.
In the State of West Bengal v. Mahendra Chandra Das, a salt lake was offered by way of a lease
with a condition precedent which mandated that the person accepting the lease has to deposit a
certain sum of money within the specified time. The defendant who was the intended lessee, in this
case, did not deposit the amount of money even after the expiration of the stipulated time. The court
held that the conduct of the defendant clearly indicated that the allotment stood cancelled.

The modes of revocation of offer

Section 6 mentions various modes of revocation of offer A proposal is revoked

a. By the communication of notice of revocation by the proposer to the other party.

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b. By the lapse of time described 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

c. By the failure of the acceptor to fulfill a condition precedent to acceptance

d. 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.
Illustrations
Illustration 1:-

If A tells B he will fix his roof for five thousand rupees, the communication is complete as soon as
the words are spoken.

Illustration 2:-

A writes to B offering to fix his roof for five thousand rupees. He posts the letter on 2nd July. The
letter reaches B on 4th July. So the communication is said to complete on 4th July.

Illustration 3:-

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

Illustration 4:-

Mr. S wants to sell his furniture. He writes about the same and makes an offer to his friend Mr. K to
buy the same. Mr. K has just bought another house for which this furniture would be useful. So
after going through the details he likes the same, writes to Mr. S stating that he has accepted the
offer, and posts it to him. Mr. K’s family is not OK with this second-hand furniture. Hence, they
convince him to refuse Mr. S’s offer. Mr. K then sends in a fax to Mr. S stating that he has revoked
his acceptance. In normal circumstances, a fax works faster than regular post. If Mr. S receives the
fax first then we say that this is considered as proper, legal Revocation of Acceptance.
Illustration 5:-

A accepts the offer and posts the letter on 10th July. B gets the letter on 14th July. But for B (the
proposer) the acceptance has been communicated on 10th July itself. So revocation of offer can
only happen before the 10th of July. The communication of the acceptance is complete against A
(acceptor) on 14th July. So till that date, A can revoke his/her acceptance, but not after such a date.
So technically between 10th and 14th July, A can decide to revoke the acceptance.

Conclusion

The Contract Act is the primary legislation in the country which deals with the contractual obligations
between the parties. The Act not only contains the provisions related to entering into the contract but
also the provisions related to the termination of the contract which is entered into by the parties. The
parties to a contract are at the liberty of revoking both offer and acceptance at a later point of time. The
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procedure and the rules of revocation are laid down under Section 5 of the Contract Act. revocation is a
way of termination of the offer. There are three ways of termination of an offer, the three of them are
Revocation, Rejection or Lapse of the offer. Offer and acceptance analysis is a traditional approach in
contract law used to determine whether an agreement exists between two parties. An offer is an
indication by one person to another of their willingness to contract on certain terms without further
negotiations. A contract is then formed if there is an express or implied agreement. A contract is said to
come into existence when acceptance of an offer has been communicated to the offeror by the offeree.

The communication of an offer is complete when it comes to the knowledge of the person to whom the
offer is made and the communication of an acceptance is complete when the acceptance is put in a
course of transmission to the offerer. Therefore, Offer and acceptance is the essential elements of a
contract and in either case, it should be done out of one’s free will and with an intention to enter into a
legally binding agreement.

Bibliography

Web-Links:-

 https://www.toppr.com/guides/business-laws/indian-contract-act-1872-part-i/acceptance
 https://www.upcounsel.com/revocation-of-offer

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  https://www.advocatekhoj.com/library/bareacts/indiancontract/5.php?Title=Indian
%20Contract%20Act,%201872&STitle=Revocation%20of%20proposals%20and
%20acceptances
 https://thefactfactor.com/facts/law/civil_law/contract_laws/indian_contract_act/revocation-
of-offer-s-3-and-5/2571/
 https://www.lawyerservices.in/Indian-Contract-Act-1872-SECTION-5-Revocation-of-
proposals-and-acceptances
 https://www.trans-lex.org/602550/_/the-indian-contract-act-1872%C2%A0-
 https://www.lawnn.com/indian-contract-act-offer-acceptance-revocation

Books:-

 Avtar Singh, Law of Contracts and Specific relief, Eastern Book Company, 12th edition
2020.
 Dr. R.K. Bangia, Contract-I, Allahbad Law Agency, 2015.
 Indian Contract Act, 1872 Universal Law Publishing, 2020.

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