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of Offer

EXAMS

Indian Contract Act 1872: Part I

Communication
ASK
of Offer and Acceptance and
Revocation of Offer
CONCEPTS

We know that two very important aspects of a contract are the

offer and the acceptance of the offer. However, in the practical
world of business and economics, the communication of the
offer and the acceptance and the timings of these are also very
important factors. Let us look at this communication timeline
and also learn about the revocation of an offer.

Communication of Offer and Acceptance

Now we have seen previously that an offer cannot be revoked

after the offeror has communicated it to the offeree. Then the
offer becomes binding, it creates legal relations between the two
parties.

So when is the communication complete? Effective

communication of the offer and a clear understanding of it is
important to avoid misunderstanding between all the parties.

If the parties are talking face-to-face this is not a problem. The

communication happens in real time and the offer and
acceptance will be communicated on the spot, creating no
confusion.
But often times in business the communication occurs via letters
and emails etc. So, in this case, the timeline of communication is
important.

Communication of Offer

Section 4 of the Indian Contract Act 1872 says that the

communication of the offer is complete when it comes to the
knowledge of the person it has been made to. So when the
offeree (in case of a specific offer) or any member of the public
(in case of a general offer) becomes aware of the offer, the
communication of the offer is said to be complete.

So when two people are talking, face-to-face or via telephone,

etc the communication will be complete as soon as the offer is
made. Example if A tells B he will fix his roof for five thousand
rupees, the communication is complete as soon as the words are
spoken.

Let us take the same example. 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.
Communication of Acceptance

Mode of Acceptance

In this case of communication of acceptance, there are two

factors to consider, the mode of acceptance and then the timing
of it. Let us first talk about the mode of acceptance. Acceptance
can be done in two ways, namely

A. Communication of Acceptance by an Act: This would

include communication via words, whether oral or
written. So this will include communication via telephone
calls, letters, e-mails, telegraphs, etc.

B. Communication of Acceptance by Conduct: The offeree

can also convey his acceptance of the offer through some
action of his, or by his conduct. So say when you board a
bus, you are accepting to pay the bus fare via your
conduct.

Timing of Acceptance

The communication of acceptance has two parts. Let us take a

look

A. As against the Offeror: For the proposer, the

communication of the acceptance is complete when he
puts such acceptance in the course of transmission. After
this it is out of his hand to revoke such acceptance, so his
communication will be completed then. So, for example, A
accepts the offer of B via a letter. He posts the letter on
10th July and the letter reaches B on 14th For B (the
proposer) the communication of the acceptance is
completed on 10th July itself.
 B. As against the Acceptor: The communication in case of
the acceptor is complete when the proposer acquires
knowledge of such acceptance. So in the above example,
A’s communication will be complete on 14th July, when B
learns of the acceptance.

Revocation of Offer

The Indian Contract Act lays out the rules of revocation of an

offer in Section 5. It says the offer may be revoked anytime
before the communication of the acceptance is complete against
the proposer/offeror. Once the acceptance is communicated to
the proposer, revocation of the offer is now not possible.

Let us take the same example of before. 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 the revocation of offer can only happen before the 10th of
July.

Revocation of Acceptance

Section 5 also states that acceptance can be revoked until the

communication of the acceptance is completed against the
acceptor. No revocation of acceptance can happen after such
date.

Again from the above example, 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
date. So technically between 10th and 14th July, A can decide to
revoke the acceptance.
Solved Question on Revocation

Q: Can an acceptor revoke the acceptance after they have

mailed the letter of acceptance?

Ans: Yes. The acceptor can revoke the offer until the
communication of the acceptance is complete against the said
acceptor. Such communication is complete when the proposer
receives the letter of acceptance. So in the time frame between
posting the letter and the letter being received by the proposer,
the acceptor can revoke the acceptance.

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Indian Contract Act 1872: Part I

Essentials of a Contract Legal Rules Regarding Consideration

Doctrine of Privity of Contract Agreements without Consideration

Types of Contract – Based on Performance Proposal or Offer Acceptance

What is a Contract according to Indian Contract Act?

Types of Contracts – Based on Validity Types of Contract – Based on Formation

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Browse
Indian Contract Act 1872: Part I

Essentials of a Contract

Legal Rules Regarding Consideration

Doctrine of Privity of Contract

Agreements without Consideration

Types of Contract – Based on Performance

Proposal or Offer

Acceptance

What is a Contract according to Indian Contract Act?

Types of Contracts – Based on Validity

Types of Contract – Based on Formation

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