Communication and Revocation of Acceptance

When the contracting parties are face to face and negotiate in person, there is instantaneous communication of offer and acceptance, and a valid contract comes into existence the moment the offeree gives his absolute and unqualified accep­tance to the proposal made by the offeror. The question of revocation of either offer or acceptance does not arise, for, in such cases a definite offer is made and accepted instantly at one and the same time.

But where services of the post office are utilized for communi­cating among themselves by the contracting parties because they are at a distance form one another, it is not always easy to ascertain the exact time at which an offer or /and an acceptance is made or revoked. In these cases the following rules, as laid down in section 4 and 5, will be applicable;

1.                Communication of an offer. The communication of an offer is complete when it comes to the knowledge of the person to whom it is made, i.e., when the letter containing the offer reaches the offeree.

2.                Communication of an acceptance. The communication of an acceptance has two aspects, viz., as against the proposer and as agonist the acceptor. The communication of an acceptance is complete (a) as against the proposer, when it is put in a course of transmission to him, so as to be out of power of the acceptor, and (b) as against the acceptor, when it comes to the knowledge of the proposer i.e., when the letter of acceptance is received by the proposer.

Illustrations

(i) A proposes, by letter, to sell a house to B for Rs. 80,000. the letter is posted, on 6^th instant. The letter reaches B on 8^th instant. The communication on the offer is complete when B, the offeree, receives the letter i.e., on 8^th.

(ii)   B accept A’s proposal, in the above case, by a letter sent by post on 9^th instant. The letter reaches A on 11^th instant. The communication of the acceptance is complete. As against A when the letter is posted i.e., on 9^TH, and as against B, when the letter is received by A.  i.e., on 11^th.

3.     Communication of a revocation. The communication of a revocation is complete. (a) 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 poser of the person revoking, i.e., when the letter of revocation is posted, and (b) as against the person to whom it is made, when it comes to his knowledge, I.e., when the letter of revocation is received by him.

Illustration

(a)            In the illustration (i) given above. A revolves his offer by letter on 8^th instant. The letter reaches B on 10^th instant. The revocation is complete as against A on 8^th, when the letter of revocation is received by him.

(b)     In the illustration (ii) given above, B revokes his acceptance by letter on 10^th instant. The letter reaches A on 12^th instant. The revocations complete as against B on 10^th, the date on which the letter of revocation is posted and as against A on 12^th, the date on which the letter reaches him.

Time during which an offer or acceptance can be revoked. In the illustrations (a) and (b) given above, there arises a question. Whether the revocation of offer by A is operative or not, or whether the revocation of acceptance by B is operative or not? For answering this question, it is necessary to know the limit of time within which an offer or acceptance can be revoked. Section 5 deals with this question and provides as follows.

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

Applying section 5 to our illustrations given above. A may revoke his offer at any time before or at the moment when B posts his letter of acceptance i.e., 9^th, but not afterwards. B may revoke his acceptance at any time before or at the moment when the letter of acceptance reaches A. i.e., 11^th, but not afterwards. While discussing the rule regarding communication of accep­tance is complete as against A on the day of posting itself i.e., 9^th, A’s revocation of his offer, which is complete as against B on 10^th is inoperative. B’s acceptance is valid and there shall be a binding contract.

For the sake of practice of the rules regarding communication of offer, acceptance and revocation discussed above, we take another illustration.

Illustration

(i) A offers, by letter, to sell his car to B for Rs. 75,000 on 1^st August B receives the letter on 3^rd august.

(ii) B puts the letter of acceptance in post on 4^th August, which reaches A on 6^th.

(iii) A write a letter of revocation of his offer and posts it on 3^rd August i.e., which reaches B on 5^th August.

Rules Applied

(i)    Communication of offer is compete on 3^rd August i.e., when it comes to the knowledge of B.

(ii) Communication of acceptance is complete as against the proposer i.e.,. A when the letter of acceptance reaches the proposer i.e., on 6^th August.

(iii) Revocation of offer is complete as against A on 3^rd August, when the letter or revocation is posted, and as against B on 5^th August, when the letter of revocation is received by him.

 Rules Regarding Acceptance

 Communication and Revocation of Acceptance

 Instances in which the rule of Quantum Meruit is applied. What is meant by Champerty?

==============================================================================

This site is mainly dedicated for Students of Law Schools, Law Universities, Students of Higher Education in Law, Admission in Law Schools, Scholars in Law, Students of Bar-at-Law, Law admission information, College of Law, Law Notes, Law Training, Law Tuition,  Law Study Guidelines, Business Law, Students of ACCA, CIMA, CFA,CA,ICWA,CPA, MBA,CMA