The word Contract
´┐Ż is defined under section 2(h) of the Indian Contract
Act, 1872 as an agreement which is legally binding and is legal enforceable. So
in order to establish a legally binding contract there are two elements which
are to be satisfied; there should be an agreement between two or more people and
the agreement should be legally enforceable. A proposal´┐Ż made by a person
in order to indicate his/her readiness to carry out or refrain to carry out
anything, when accepted becomes a promise
´┐Ż, the promise/set of promises
further in exchange of consideration forms an agreement
´┐Ż. The term promise
and agreement are defined under section 2(b) and 2(e) of the Indian Contract
Act, 1872 respectively.
Not all agreements are contracts but all contracts are agreements. For an
agreement to be a contract there should be:
What Is Revocation Of Offer?
- Promise/set of promises in exchange of some consideration. An agreement
without consideration is void.
- The parties should be Competent to enter into a contract as defined
under Section 11&12 of the ICA.
- Free consent of parties to the contract and ought not to be vitiated by
coercion, Undue influence, fraud, misrepresentation and mistake.
- Lawful object and consideration.
Revocation in literal sense means to nullify something but in legal phrasing,
Revocation of Offer alludes to a withdrawal of an offer made by the offeror/proposer
whenever before the acceptor/offeree acknowledges it. In the event that the
offeror wishes to repudiate/pull back the equivalent after the offeree's
acknowledgment, it doesn't fall in the domain of 'Revocation'. It is explained
under section 5 of ICA.
Relevant Legal Provision(S)
A valid offer and a valid affirmation are the two prerequisites of a sound
contract and communication acts as a channel between the offer and its
affirmation. There are two types of communication under the ICA; the
communication of offer and the communication of acceptance. As explained under
the Section 4 of ICA a communication of offer concludes when it comes to the
understanding of the person to whom it directs.
The communication of acceptance
on the other hand as explained under Section 5 of the ICA concludes against the
person by whom the offer is made at the point when it is placed in course of
transmission to the offeror. ICA provides flexibility to the parties to the
contract i.e. the offeror and the offeree to rescind or revoke the offer at a
particular point of time.
Communication of Revocation
The communication of revocation is finished ´┐Ż as against the individual who
makes it, when it is placed into a course of transmission to the individual to
whom it is made, in order to be out of the intensity of the individual who makes
it, as against the individual to whom it is made, when it comes to his
Modes of Revocation of an offer
Section 6 of Indian Contract Act describes the modes of revocation of an offer
Rejection of offer by the offeree
- Revocation of offer before acknowledgement by communication of the
notice of revocation by the offeror
- Revocation by lapse of time.
For example, the firm stipulated January 18 to accept the offer, and person A
could not send an acceptance letter till January 18. The offer is revoked.
- Revocation by non-performance to fulfil a promise prior to acceptance.
For example, A agrees to sell her watch to B if she pays a quarter of the actual
price till January 11. If B is not able to pay the said amount by January 11
then the offer can be revoked.
- Revocation by death or insanity of the offeror
- Revocation by cross offer.
For example, A agrees to sell his bike to B for Rs.400,000. B replied I will buy
it for Rs.375,000. The offer from A is revoked by this counter offer from B.
- Revocation by failure to accept in the manner prescribed.
Offeree might dismiss the offer and once the offer has been dismissed, it can't
be acknowledged subsequently by the offeree.
Dismissal might be communicated or inferred:
Rules governing the procedure of revocation of offer by the offeree
- Express: by words spoken or written.
- Implied: by counter offer or contingent offer
Rules governing the procedure of revocation of offer by the offeror
- Offeree can deny the proposal for revocation whenever before the communication
of its acknowledgment is finished as against the offeror but not later.
- Revocation is complete when it is conveyed to the offeree and it comes to his
- Offeror can rescind the proposal whenever the offer is acknowledged by the
- In the event that offeror has consented to save the offer open for a specific
period, he can deny it before termination period if there is no consideration
for keeping the offer open
- The offer, once rescinded, cannot be subsequently accepted.
- The offer, once accepted, cannot be subsequently revoked.
- Payne v Cave[i]
The respondent made the most elevated offer for the plaintiff party's
merchandise at an auction, however he pulled back his offer before the fall of
the auctioneer´┐Żs final call. It was held that the respondent was not bound to
purchase the products. His offer added up to an offer which he was qualified to
pull back whenever before the auctioneer connoted acknowledgement by thumping
down the mallet. Note: The customary law rule set down for this situation has
now been classified in s 57(2) Sale of Goods Act 1979.
- Martin Walford v. Charles Miles[ii]
Dodds offered to Dickinson to sell a house for ┬ú800. Dodd's offer letter
expressed that the offer was to be opened until 12 June, 9 a.m.'. On 11 June
morning, Dodds offered the house to the third party and Dickinson was recounted
the deal by someone else on that day evening. Before 12 June 9 a.m. on Friday
Dickinson needed to acknowledge Dodds' offer so Dickinson gave him a
It was held that no acknowledgement was made. The offeree knew that Dodds was
not, at this point, disapproved of offering property to him already and
subsequently the offer was truly pulled back.
Critical Analysis And Conclusion
Mainly, an agreement is supposed to be closed when and where the offeree
proclaims the consent to be limited by the proposition of the offeror. Deciding
the proper time of determination of an agreement is by and by not as simple as
it might appear at a first look. This issue is exacerbated by the opportunity of
people to pull back or renounce their recommendations of finishing up an
The guideline of withdrawal and revocation of offer and acceptance assumes an
imperative job not just in deciding the hour of determination of an agreement
yet in addition in keeping up smooth exchanges among people. Thus, it helps the
gatherings in limiting exchange costs. Up until now, no accord is reached among
lawful instruments concerning this basic issue. Various laws moved toward the
issue from their points of view in this manner making the procedure of
harmonization scarcely conceivable.
- [100 E.R. 502]
-  ADR.L.R. 01/23