Revocation of Offer & Acceptance related to Business Law.pptx

Revocation of Offer & Acceptance

1. Revocation of Offer and Acceptance Dr. M. Vadivel Assistant Professor Department of B. Com PA SRCAS, CBE.

2. Revocation of Offer under Indian Contract Act The   Revocation of Offer under Indian Contract Act  is a crucial aspect of contract law in India. The Indian Contract Act, 1872, serves as the backbone of contract formation in India. A well-structured offer and its acceptance are essential for creating a legally binding contract. But what occurs when the offeror changes their mind before the offeree accepts? This is where the  revocation of offer  comes into play.

3. Understanding Revocation of Offer The   revocation of offer  refers to the act of the offeror withdrawing their offer before the offeree accepts it. According to  Section 5  of the Indian Contract Act, the offeror retains the right to revoke their offer at any time before acceptance is complete . The Act outlines several ways to revoke an offer: 1. Communication First and foremost, the offeror must clearly communicate the  revocation of the offer  to the offeree. You can convey this revocation verbally, in writing, or through any reliable means that effectively communicates the withdrawal. Importantly, silence does not equate to revocation. 2. Lapse of Time If the offer specifies a time frame for acceptance (e.g., “This offer is valid for 24 hours”), it automatically lapses after that period. Similarly, if a reasonable time for acceptance passes without a response from the offeree, the offer becomes void.

4. 3. Failure to Fulfill Condition Precedent If the offer includes a condition that must be met before acceptance, and the offeree fails to meet this condition, the offer gets revoked. 4. Death or Unpredictable Behavior of Offeror If the offeror dies or exhibits unpredictable behavior before the offeree accepts, the offer automatically revokes—provided the offeree is aware of the offeror’s condition. 5. Counteroffer When the offeree presents a counter-offer, the original offer is deemed revoked. 6. Non-Acceptance If the offeree fails to accept the offer in the specified manner or within a reasonable time frame, the offer can be revoked.

5. Importance of Revocation of Offer Understanding the  revocation of offer  is crucial for both parties involved: 1. Offerors : Knowing your right to revoke gives you flexibility in negotiations. 2. Offerees : Being aware of revocation timelines empowers you to act promptly and secure an offer that meets your needs.

6. Revocation of Acceptance: 1. Section 5 - Revocation of Proposal: Section 5 of the Indian Contract Act deals with the revocation of proposals (offers). An offer can be revoked before it is accepted by the offeree. However, the revocation must be communicated to the offeree before they have accepted the offer. 2. Section 6 - Revocation of Acceptance: Section 6 specifically addresses the revocation of an acceptance of an offer. As per this section, an acceptance may be revoked at any time before the communication of the acceptance is complete . The communication of acceptance is considered complete when it reaches the offeror (in the case of a written or verbal acceptance). If the acceptance is by post, the revocation of acceptance is valid only if it reaches the offeror before the acceptance has been posted. Essentially, the revocation of acceptance must occur before the acceptance is communicated completely to the offeror .

7. 3. Section 7 - Acceptance must be absolute: Acceptance must be absolute and unqualified. If any conditions or qualifications are added to the acceptance, it is not considered valid acceptance but a counteroffer. In case of revocation of acceptance, if a qualified acceptance is given, it can lead to a legal issue of whether the initial offer has been rejected or if the counteroffer is being revoked. 4 . Section 8 - Communication of Acceptance: The section further explains that when an offeror and offeree are in contact via postal communication, the revocation of acceptance is valid only if it reaches the offeror before the acceptance is posted or delivered to them.

8. Thank You…..