MODES OF REVOCATION OF OFFER
Sec. 6 mentions various modes of revocation of offer. The section is as under :—
"A proposal is revoked—
1. by the communication of notice of revocation by the proposer to the other party;
2. by the lapse of the time described in such proposal for its acceptance, or, if no time is so prescribed, by thelapse of a reasonable time, without communication of the acceptance;
3. by the failure of the acceptor to fulfill a condition precedent to acceptance; or
4. by the death or insanity of the proposer, if the fact of his death or insanity comes to the knowledge of the acceptor before acceptance."
1. BY NOTICE OF REVOCATION
According to section 6(1),A proposal may be revoked by the communication of notice of revocation by the proposer to the other party. To be effective the notice of revocation has to be communicated by the proposer (or his agent) and not by anybody else.
On this point English law is different from Indian law.
In India, the notice of revocation has to be communicated by the proposer only, whereas in England the offer stands revoked even though the offeree comes to know about the revocation of offer through some other source and not by a notice by the offeror himself.
DICKINSON V. DODDS [(1876) 2 CH. D. 463.]
Above case is an authority of English law on this point.
1. In that case Dodds made an offer on 10th June, 1874 to Dickinson for the sale of his property for £ 800. Itwas mentioned that the offer was open till 12th June, 9.00 am.
2. On 11th June, Dodds sold the same property to somebody else. Dodds did not himself inform Dickinson about the sale of property to somebody else, but Dickinson had come to know about this act from someother source.
3. On 12th June before 9.00 A.M. Dickinson accepted the offer and then sued Dodds to specifically performthe contract for sale of property.
It was held that sale of property to somebody else by Dodds on 11th June amounted to implied revocation of the offer for the sale of that property to Dickinson and, therefore, the offer having been revoked on 11th June was incapable of being accepted on 12th.
This case is an authority for the rule that the revocation of the offer was valid even though the fact of the sale of property to somebody else was communicated to Dickinson by somebody other than Dodds or his authorised agent.
Another point explained by this case is that even though Dodds had originally stated that the offer was open till 9.00 A.M. on 12th June, he was still free to withdraw this offer at any time before it was accepted because no legal obligation is created until the offer is accepted.
2. BY LAPSE OF TIME
According to section 6(2), a proposal is revoked by the lapse of the time prescribed in such proposal for its acceptance, or, if no time is so prescribed, by the lapse of a reasonable time, without communication of the acceptance.
Sometimes the parties may expressly fix the time upto which the offer will remain open. For example, it may be stated that the offer is open till 15th January, 5.00 P.M. Such an offer lapses automatically if it remainsunaccepted till the stipulated time and the same cannot be accepted further thereafter.
Even if no time has been prescribed within which the acceptance can he made, the offer stands revoked on thelapse of a reasonable time.
Non-acceptance within a reasonable time means an implied refusal by the offeree to accept the offer.
RAMSGATE VICTORIA HOTEL CO. V. MONTEFLORE. [(1866) L.R. I EX., 109;
The defendant, Monteflore, made an offer to purchase shares in the plaintiff company in June. This offerwas accepted by the plaintiff company by allotting shares to him in November.
The defendant contended that his offer has lapsed and, therefore, he was not bound to take the shares.
It was held that the offer had lapsed as the same had not been accepted within a reasonable time and thedefendant was not bound to take the shares.
3. BY FAILURE TO FULFIL A CONDITION PRECEDENT
According to section 6(3) when the offer is subject to some condition precedent, and the acceptor fails to fulfilsuch condition the offer stands revoked.
For example, if the offer requires the deposit of some earnest money, or the execution of some document, etc.,these conditions must be fulfilled.
When an offer has been made subject to a certain condition, the offeror may subsequently waive the condition. If the offeror has waived the condition and the offeree accepted the offer, that results in a valid contract.
4. BY DEATH OR INSANITY OF THE OFFEROR
In India the death or insanity of the offeror does not automatically make the offer to lapse.The offer stands revoked if the fact of death or Insanity comes to the knowledge of the acceptor before acceptance. It means that if the fact of death or insanity has not come to the knowledge of the offeree while he accepts the offer, it is valid acceptance giving rise to a contractual obligation.
There, after the offeree knows about the offeror's death, the offer lapses and cannot be accepted. [Caouthart v. Clementson, (1879) 5 Q.B.D. 42.]
As regards the point, whether a valid contract is created if the offeree accepts without having knowledge of the death, the position does not appear to be very clear.
