LAW OF

CONTRACT
PART 04
REVOCATION OF
OFFER
 REVOCATION OF OFFER

A proposal, once communicated, remains

open

until it is withdrawn, cancelled, retracted

or lapsed.
 REVOCATION OF OFFER

• S.5(1) of the CA :
“ a proposal may be revoked at any time
before the communication of its
acceptance is complete as against the
proposer, but not afterwards”
 Communication of Acceptance

s. 4(2) of the Contracts Act 1950

➢(a) against the OFFEROR : put in the

course of transmission to him.
• i.e.: Offeree post the LOA to Offeror.
 Communication of Acceptance

• Illustration (b) of s4 stated :

– B accepts A’s proposal by a letter sent by
post. The communication of the
acceptance is complete as against A, when
the letter is posted.

6
 REVOCATION OF OFFER

• S.5(1) of the CA :

“ a proposal may be revoked at any time

before the acceptor send letter of
acceptance, but not afterwards”
 Routledge v Grant
• The D offered to sell a house to P and the
acceptance was to be made within 6 weeks.
• Issue:
Whether the D could revoke the offer before 6
weeks is lapsed?
 Routledge v Grant
• Court laid down the principle :
“the Offeror can revoke his offer at any time
provided that NO acceptance be made by the
Offerree during that time “.
 HOW Revocation can be made

Section 6 of CA:
A Proposal is revoked:
(a) Communication of notice of revocation by
the proposer to the acceptor;
(b) Lapse of time prescribed in the proposal or if
no time prescribed, by of lapse of a
reasonable time;
(c) Failure of the acceptor fulfill a condition of
an acceptance;
(d) Death or mental disorder of the proposer.
how Revocation can be made – S6

By communication
Death, mental
of
Disorder (d)
notice of revocation (a)

Failure of the
Lapse of the time
acceptor
Prescribed (b)
to fulfil the
(Ramsgate’s Case)
condition (c )
 Revocation :

Section 6 of CA:
(a) Communication of notice of revocation by the
proposer to the acceptor;
When communication of revocation of
proposal is complete?
⚫ Section 4(3)(a) of CA:

on the part of the offeror, when it is put

into a course of transmission to the
offeree. (A sent the LORO to B)

⚫ Section 4(3)(b) of CA:

on the part of the offeree when it
comes to his knowledge. (B received
the LORO from A)
 Byrne v Van Tienhoven
(1880) 5 CPD 344
• The D offered to sell 1000 boxes of tinplate to
the P.
• 1/10= D posted a LO from Cardiff to the P in
New York
• 8/10= D posted a LOR to the P revoking the
offer
• 11/10= P received the D's offer letter and at
once posted his acceptance via telegram.
 Byrne v Van Tienhoven
(1880) 5 CPD 344
• 15/10= P sent again the LOA to reconfirm his
acceptance that made on 11/10
• 20/10= P received the D's letter of revocation
which is posted on 8/10.
 Byrne v Van Tienhoven
(1880) 5 CPD 344
The court held:
There was a contract.
Revocation of offer posted on 8/10 was not
effective till 20/10 ( when the P received
the said LORO)
At the meantime, P had already accepted the
offer on 11/10 (telegram).
 Byrne v Van Tienhoven
(1880) 5 CPD 344
The court held:
There was a contract.
Revocation of offer posted on 8/10 was not
effective till 20/10 ( when the P received
the said LORO)
At the meantime, P had already accepted the
offer on 11/10 (telegram).
 Example:
⚫ A offers by letter to sell a house to B. The
communication of offer complete when B
receives the letter.
⚫ A then revokes his offer by telegram.(S.6(a)
of CA.
⚫ The revocation is complete (S. 4(3)(a) (b) of
CA.
− on the part of A when the telegram
is despatched.
− On the part of B when B receives it.
 Revocation :

Section 6 of CA:
(b) Lapse of time prescribed in the proposal or if
no time prescribed, by of lapse of a
reasonable time;
Macon Works & Trading Sdn Bhd v
Phang Hon Chin (1976) 2 MLJ 177
⚫ Court laid down the principles:
⚫ An offer lapses after a reasonable time.
Failure to accept the offer within
reasonable time shows rejection by
the offeree.
 Ramsgate Victoria Hotel Co v
Montefiore (1866)LR Ex Ch 109
⚫ The D applied for shares in the P
company on 8 June, and had paid a
deposit.
⚫ He received no further news until 23
November when he was informed that
the shares had been alloted to him and
that he should pay the balance due on
them.
⚫ D refused to pay the balance.
 Ramsgate Victoria Hotel Co v
Montefiore (1866)LR Ex Ch 109
⚫ The court held:
that there was no valid binding contract
bacause acceptance was not made within
reasonable time.
 Revocation :

Section 6 of CA:
( c) Failure of the acceptor fulfill a condition of
an acceptance;
 Example:

A company offers to employ Iskandar

on condition that he passes a skill test.
If the applicant fails the test, the
proposal is revoked because Iskandar
does not fulfill a condition
 Financing Ltd v Stimson

The D offered to buy a car from P’

company if the car remain in the same
conditions.
However, before the D accepted the
offer, the said car was stolen and was
subsequently recovered in damaged
condition.
 Financing Ltd v Stimson

The court held:

The D’s offer to buy the car is only
accepted if the car remained in the
same condition when the offer was
made.
Since, the offerree fails to fulfill the
condition, offer is automatically
revoked.
 Revocation :

Section 6 of CA:
(d) Death or mental disorder of the proposer;
 Example
❖ the offer only revoked if the offeree aware
the facts that before he makes acceptance ,
the offeror is death/mental disorder.
❖The acceptance without prior knowledge
of the death or mental disorder of the
proposer is a good acceptance.

acceptance is valid and binding.

 Bradbury v Mogan
❖ Court laid down the principle:

The death of the offeror WILL NOT

TERMINATE the offer if the acceptance is
made in IGNORANCE of his death.
Thank You