TOPIC: REVOCATION OF OFFER AND

ACCEPTANCE

SUBMITTED TO
N.NIKHILESH
Assistant Professor,
Bhavans Palsar
Contents
1 INTRODUCTION ..................................................................................................................................... 3
1.1 1.OFFER ......................................................................................................................................... 3
1.2 2.ACCEPTANCE .............................................................................................................................. 3
2 Revocation of offer ............................................................................................................................... 4
3 Section 5................................................................................................................................................ 4
4 REVOCATION OF OFFER ........................................................................................................................ 4
4.1 Illustration ..................................................................................................................................... 4
5 Case laws; Revocation of offer ............................................................................................................. 5
5.1 Managing committee of SGA high school V. state of Bihar and others : ..................................... 5
5.2 Payne V. Cave: ............................................................................................................................... 5
6 Modes of revocation of offers .............................................................................................................. 6
7 Various modes of revocation ................................................................................................................ 6
8 Revocation of acceptance ..................................................................................................................... 7
9 Section 4................................................................................................................................................ 7
10 Revoction of Acceptance case .......................................................................................................... 8
10.1 Byrne and Co V. Leon van Tienhoven and Co (citation) [1880]5 CPD 344 .................................... 8
10.2 Illustration ..................................................................................................................................... 8
11 CONCLUSION ..................................................................................................................................... 9
12 Bibliography .................................................................................................................................... 10
1 INTRODUCTION

1.1 1.OFFER
1.1 Section 2(a) of the Indian contract act 1872 defines the term proposal as when one person
signifies to another his willingness to do or abstain from doing something with a few to obtaining
the assent of the other to such an act or abstinence, he is said to make a proposal or offer is called
the promisor or offeror.

1.2 2.ACCEPTANCE
2.1: A proposal when accepted, result in an agreement. According to section 2(b) 1: when the
person to whom the proposal is made signifies his assent thereto, the proposal is said to be
accepted. A proposal when accepted becomes a promise.

1
Section 2(b), The Indian Contract Act, 1872.
2 Revocation of offer

It is only after the acceptance of an offer that there arises a contract and then both the parties
become bound by their respective promises. Before the offer has been accepted it can be
revoked. After an offer has been accepted it ripens in to a contract and then it can not be
revoked. According to section 5,

3 Section 5

A proposal may be revoked at any time before the communication of its acceptance is complete
as against the proposer but not afterwards.

4 REVOCATION OF OFFER

4.1 Illustration
A proposes by a letter sent by post to sell his house to B, B acceptes the proposal by letter sent
by a post. B may revoke his acceptance at any time before or at the moment when the letter
communicating it reaches A, but not afterwards.2

2
Indian Contract Act, Bare act
5 Case laws; Revocation of offer

5.1 Managing committee of SGA high school V. state of Bihar and others :
Fact of the case Dr Paramanand the secretary of managing committee of a school sent his
letter of resignation on 9/7/1980 , requesting the management to accept the same. He sent
another letter dated 9/8/1980, withdrawing his resignation. The managing committee which met
on 11/8/1980, considered his resignation but ignored his subsequent withdrawal of resignation
and decided to accept the resignation.

Issues : whether the resignor could withdraw the resignation submitted by him?

Relevant legal provisions at the very out let it is pertinat to mention the following important
principles of Indian contract act 1872.

According to section 5(a) A proposal may be revoked at any time before the communication of
its acceptance is complete as against the proposer, but not afterwards.

Reasoning : It was observed that in view of the withdrawal of the resignation, resolution of the
managing committee accepting the resignation in its meeting held on 11/8/1980 was invalid.

5.2 Payne V. Cave:

Mr. Cave made the highest bid for Payne s good at an action. But the Mr. Cave changed
his mind and he withdraw his bid before the auctioneer bought down his hammer it was
held that Mr. Cave the defendant was not bound to purchase the goods . His bid
amounted to an offer which he was untitled to withdraw at any time before the auctioneer
signified acceptance by knocking down the hammer.3

3
Sale of goods Act UK 1979s57 (2)
6 Modes of revocation of offers4

1) Section 6 mentions various modes of revocation of offer. The section is as under when a
proposal is revoked;

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

By the laps of time in such proposal for its acceptance or if no time is so
prescribed by the laps of a reasonable time without communication of the
acceptance.
By the failure of the acceptor to full fill a condition precedent to acceptance.
By the death or insanity of the proposer if the fact of his death or insanity comes
to the knowledge of the accepter before acceptance.

7 Various modes of revocation

By notice of revocation.
By laps of time.
By failure to full fill a condition precedent.
By death or insanity of the offeror

4
Contract 1 by Bangia
8 Revocation of acceptance

An acceptance may be revoked at any time before the communication of the acceptance is
complete as against the acceptor but not afterwards. It has already been noted above that when
the contract is created through post , according to section 4, by posting of the letter of
acceptance:

1.The proposer becomes bound when the letter of acceptance is posted to him

2.But the acceptor becomes bound when the letter of acceptance reaches the proposer.

Since the acceptor does not become bound immediately on posting his letter of acceptance, he is
free to revoke the acceptance by adopting speedier mode of communication , where by his
communication of revocation of acceptance may reach earlier than his letter of acceptance
.section 5 expressly permits the revocation of acceptance through following provision .

9 Section 4

Commumication when complete the communication of a proposal is complete when it comes to

the knowledge of the person to whom it is made .The communication of a proposal is complete
when it comes to the knowledge of the person to whom it is made . The communication of an
acceptance is complete as against the proposer when it is put in a course of transmission to him
so as to be out of the power of the acceptor as against the acceptor when it comes to the
knowledge of the proposer. The communication of a revocation is complete as against the person
who makes it when it is put into a course of transmission to the person to whom it is made , so as
to be out of the power of the person who makes it ;as against the person to whom it is made
,when it comes to his knowledge5.

10 Revoction of Acceptance case

10.1 Byrne and Co V. Leon van Tienhoven and Co (citation) [1880]5 CPD 344

Van Tienhoven and Co posted letter from their office in cardiffto Byrne and Co in New york
city, offering 1000 boxes of tin plates for sale on October 1. Byrne and Co got the letter on 11
October they telegraphed acceptance on the same day .But on 8 October Van Tienhoven had
send another letter withdrawing their offer because tin plate prices had just risen 25% they
refused to go through with the sale.

10.2 Illustration

A proposes by a letter send by post to sell his to B ,B accepts the proposal by a letter send 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.6

5
Section 4 from Bare Act
6
From bare Act
11 CONCLUSION

In this assignment there have been some important sections are mentioned .That is included in
the Indian contract Act1872

In this topic revocation of offer and acceptance are clearly mentioned .Offer means the made
with a view to obtaining assent of the other party there too.

In the case of acceptance a proposal when accepted, result in an

agreement it is only offer the acceptance of the proposal that a contract between two parties can
arise. so after an offer has been accepted it ripens in to a contract and then it cannot be revoked.
12 Bibliography
http://:www.googlescholar.com

Contract-1, Dr. S.R. Myneni, First Edition 2010-11