Revocation of Acceptances and Proposals

[leaglesamiksha]

Revocation of Acceptances and Proposals
As per Section 5.of the Indian Contracts Act, 1872.- “Revocation of proposals and acceptances.—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.”
Ques: What if the letter of acceptance and revocation were posted on different days but it was received by the proposer on the same day?

Topic

[Intern]

To explain this situation two Sections of The Indian Contract Act, have to read simultaneously i.e., Section 4 and 5. Section 4 talks about WHEN THE COMMUNICATION OF ACCEPTANCE AND REVOCATION IS COMPLETE. Firstly, the communication of Acceptance as against the Proposer of the contract is complete when The Letter of acceptance is despatched by the acceptor. The same letter will form completion on the part of the acceptor when it is received by the proposer. Thus, coming to the knowledge of the Proposer is a vital point for this question. Secondly, the communication of revocation is complete is as against the person who makes it, when it is put into a course of transmission to the person to whom it is made, 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 knowledge. Again, coming to the knowledge of the other person is important.
Putting in these two sections to the question, it can be concluded that even if the letter of acceptance and revocation was put on different dates but received by the proposer on the same day. The essential element would the which letter he opens first. By opening one, the effect of the other would be nullified. Thus, to make revocation of acceptance in effect, it should be made to the knowledge of the offeror before the letter of acceptance is opened.

[Intern]

Section 5 of the Indian Contract says 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. An emphasis on the word communication of acceptance is to be made.
Communication of acceptance according to Section 4 of the Indian Contract Act,1872 is said to be completed when the said communication comes to the knowledge of the person who made the offer. The communication of acceptance can be understood in two multiple aspects.

In the given question of law to be discussed the acceptance would be considered valid and revocation will be declared ineffective as the acceptance of proposal will be completed as soon as the letter is put in transmission i.e it become out of the power of the acceptor to make any change, and revocation of the acceptance will only be completed as soon as the offeror is made aware of the such revocation. Thus the communication of revocation should reach the offeree before the acceptance is out of his power. In an illustration in section 5 A proposes, by a letter sent by post, to sell his house to B. B accepts the proposal by a letter sent by post. A may revoke his proposal at any time before or at the moment when B posts his letter of acceptance, but not afterwards. B may revoke his acceptance at any time before or at the moment when the letter communicating it reaches A, but not afterwards.

against proposer = Put in transmission, becoming out of his power
against acceptor = when it comes to knowledge of the proposer

Applying the above-mentioned sections and illustration of the bare act, even if the acceptance and revocation were posted by the receiver on different days and reaches the offeror on the same day as the acceptance is completed as soon as it becomes out of his power to make any change, so for revocation of acceptance to be considered effectual, it should be made to the knowledge of the offeror before the letter of acceptance is posted.

[leaglesamiksha]

A proposal must be accepted by the other party to constitute a legally binding contract. If the other party accepts a proposal and it is properly conveyed to the party who proposed, it becomes a legally binding contract, as long as the object and consideration are legal and the parties want to form a legal relationship. The parties cannot back out of their promises once it has become a legally enforceable contract. Before the proposal or acceptance is fully communicated to the other party, the parties might cancel it at any time.
A proposal may be revoked at any moment until the final notification of its acceptance as against the proposer, but not thereafter, according to Section 5 of the Indian Contract. An acceptance may be reversed at any point until the acceptance is fully communicated to the acceptor, but not after that. It’s important to put a lot of emphasis on the word “transmission of acceptance.” According to Section 4 of the Indian Contract Act, 1872, communication of acceptance is considered complete when it reaches the knowledge of the person who made the offer.
Acceptance communication can be viewed from a variety of perspectives. The acceptance of the proposal will be considered valid and revocation will be declared ineffective in the given question to be discussed because the acceptance of the proposal will be completed as soon as the letter is put in transmission, i.e. it will be out of the acceptor’s power to make any changes, and revocation of the acceptance will only be completed once the offeror is made aware of the revocation.
Even if the acceptance and revocation were posted by the receiver on different days and reach the offeror on the same day as the acceptance is completed as soon as it becomes out of his power to make any change, using the above-mentioned sections and illustration of the bare act, even if the acceptance and revocation were sent on different days by the receiver and arrived at the offeror on the same day, the acceptance is completed as soon as he is no longer able to make any changes. For revocation of acceptance to be effective, it must be made with the offeror’s knowledge before the acceptance letter is sent.

[leaglesamiksha]

– according to section 5 of Indian contract act, 1872, A proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards.
– As in the specified problem there are two circumstances to act
– a) The persons receives the letter at two different time but on same day. In this scenario section 4 of Indian contract act, 1872 comes into act and the first letter received by it will only be considered. I.e. if the person receives letter of revocation first then it will be taken into consideration and if the person receives letter of acceptance first it will be taken into consideration.
– b) The person received the letter of revocation and acceptance at the very same moment. In this scenario the first letter read can be considered as the first communicated letter.

[leaglesamiksha]

Since the question above talks about acceptance and revocation from both angles, that is when it’s in transmission and when it’s complete, so to understand this question, two section of the Indian contract act have to be read simultaneously; section 4 and section 5.
Section 4 says the communication of acceptance is complete
-As against the proposer when it is put in the course of transmission to him so as to be out of the power of the acceptor to withdraw the same;
– As against the acceptor when it comes to the knowledge of the proposer
It’s important to put a lot of emphasis on the words “knowledge of the proposer”
Section 5 states that An acceptance may be revoked at any time before the communication of the acceptance is complete as against the acceptor but not afterwards the intimation of the acceptance has reached the offer or has been brought to his or her knowledge as a result the revocation of the acceptance must reach the offer before the initial acceptance reaches him.
In the given question the acceptance and revocation of acceptance reaches the principal at the same time and the letter of the acceptance comes in the knowledge of the proposer, completing the acceptance of proposal Therefore revocation of acceptance is considered ineffectual, for it the revocation to be effectual it should come to the knowledge of the proposer before the completion of acceptance.
Contrary to all this reasoning , in the case of Countess of Dunmore v Alexander wherein the letter of acceptance and the letter of revocation of acceptance had reached the principal on the same day, the revocation was upheld, and the case was put to an end.

[manishka_seal]

Section 5 of the Indian Contract Act, 1872 states that an acceptance may be revoked at any time before the communication of the acceptance is complete as against the acceptor, but not afterwards. Section 4 of the Indian Contract Act, 1872 states that the communication of acceptance is complete, as against the acceptor, when it comes to the knowledge of the proposer. For example, if X proposes, by a letter by post, to sell his house to Y on 1st January. Y accepts the proposal by a letter sent by post on 4th January. The letter reaches X on 6th January. In this case, Y could have revoked his acceptance at any time before 6th January, but not afterwards.
Here, the keyword is ‘the knowledge of the proposer’. Let us understand the given problem to elucidate the keyword. A proposes to sell his car to B, and communicates his proposal to B via a post on 1st February. The letter reaches B on 4th February. B reads the letter and accepts A’s proposal. B communicates his acceptance to A via a post on 7th February. On 8th February, B decides to revoke his acceptance, and wrote a letter to A, informing him of the revocation of the acceptance. B posted the letter on the same day, that is, 8th February. Coincidentally, both the letters- letter of acceptance and letter of revocation- reach A on 10th February. Here, lies the question: which letter will be taken into consideration, or, which letter will be considered as the first communicated letter? Let us discuss two different scenarios:
i. If A reads the letter of revocation before the letter of acceptance, then the letter of revocation will be considered as the first communicated letter, as it came to A’s knowledge first, even though both the letters reached him on the same day. In this instance, B’s acceptance will be revoked.
ii. If A reads the letter of acceptance before the letter of revocation, then the letter of acceptance will be considered as the first communicated letter, as it came to A’s knowledge first, even though both the letters reached him on the same day. In this instance, B’s acceptance will be not be revoked.
This example, thus, proves that ‘the knowledge of the proposer’ is the keyword in the problem. It entirely depends on which letter is read by the proposer first.

[Author]

Replies