8/11/2019 Communication of Offer

1/3

3) Discuss briefly the law relating to communication of offer acceptance and revocation.

When may an offer and acceptance be revoked?

Communication of offer, cceptance and !evocation

An offer, its acceptance and its revocation (withdrawal) to be complete must be communicated.

When the contracting parties are face to face and negotiate in person, a contract comes intoexistence the moment the offeree gives absolute and unqualified acceptance to the proposal made

by the offeror. When the parties are at a distance and the offer and acceptance and their

revocation are made through post i.e.

"y letter or telegramwhen the offer an acceptance of offer is made by letter or telegram the

following rules apply.

#ode of Communication $%ec.3)

The communication of an offer, its acceptance and their revocation respectively are deemed to be

made any (a) act, (b) omission, of the party offering, accepting or revoing. !uch act or

omission must, however have the effect of communicating such offer, acceptance or revocation.

"n other words, offer acceptance or revocation may be communicated by words spoen or

written, or by conduct. Thus installation of a weighing machine at a public place is an offer,

putting of a coin in the slot the machine is the acceptance of the offer, and switching off the

machine amounts to revocation of the offer.

When is communication complete $%ec.&)

The communication of an offer is complete when it comes to nowledge of the person to whom

it is made.

#xample$A purpose, by a letter, to sell a house to % at a certain price. The letter is posted on &'

th

uly.

"t reaches % on &thuly.

The communication of acceptance is complete as against the proposer when it is put into course

of transmission to him, so as to be out of the power of the acceptor.

'ime for !evocation of offer and acceptance

A proposal may be revoed at any time before the communication of its acceptance is complete

as against the proposer, but not afterwards.

An Acceptance, may be revoed at any time before the communication of the acceptance iscomplete as against the acceptor, but not afterwards.

#xample$A proposes by a letter sent by post to sell his house to %. The letter is posted on the & st

of the month. % accepts the proposal by a letter sent by post on the *th. The letter reaches A on the

+th.

8/11/2019 Communication of Offer

2/3

A may revoe his offer at any times before % posts his letter of acceptance, i.e. * th but not

afterwards.

% may revoe his acceptance at any time before the letter of acceptance reaches A, i.e. + th, but

not afterwards.

(oss of (etter acceptance in postal 'ransit

Acceptance is complete as against the offeror as soon as the letter of acceptance is posted. The

contract is complete even if the letter of acceptance goes astray or is lost through an accident in

the post. %ut in order to bind the offeror, it is important that the letter of acceptance is correctly

addressed, sufficiently stamped and posted. "f it is not correctly addressed and sufficiently

stamped, the communication of acceptance is not complete.

Contracts ver telephone or tele* or oral communication

A contact by telephone or telex has the same effect as an oral agreement entered into between the

parties when they are face to face. %ut the offeree must mae sure that his acceptance is properly

received, i.e. heard and understood by the offeror.

#xample$A maes an offer to % across a river or courtyard % shouts bac accepting As offer, but

A does not hear %s reply as it was drowned by an aircraft flying overhead. There is no contract

that moment. "f % wishes to mae a contract, he must wait till the aircraft is gone and then shout

bac his acceptance so that A can hear what % says. -ntil A hears % reply, there is no contract.

When does an offer come to an end?

An offer may come to an end by revocation or lapse, or reection.

". %y communication of notice of revocation by the offer at any time before its acceptance

is complete as against him.

#xample$At an auction sale, A maes the highest bit for %s goods. /e withdraws the bit before

the fall of the hammer. The offer has been revoes before its acceptance.

"". %y lapse of time if it is not accepted within the prescribed time if however not time is

prescribed, it lapses by the expiry of a reasonable time.

#xample$A offered to sell wool to % on Thursday and agreed to give him three days time to

accept. % accepted the offer on 0onday, but by the time A had sold the wool. /eld the offer had

lapsed.

""". %y non1 fulfilment by the offeree of a condition precedent to acceptance.

#xample$ A, a !eller, agrees to sell certain goods subect to the condition that %, the buyer, pays

the agreed price before a certain date. "f % fails to pay the price that date, the offer stands

revoed.

8/11/2019 Communication of Offer

3/3

"2. %y death or insanity of the offeror provide the offeree comes to now of it before

acceptance. "f he accepts an offer in ignorance of the death of insanity of the offer, the

acceptance is valid.

2. "f a counter1offer is made to it. Where an offer is accepted with some modification in

terms of the offer or within some condition not forming part of the offer, such qualified

acceptance amounts to a counter1offer.

#xample$an offeree agreed to accept half the quantity of goods offer by the offeror on the same

terms and conditions as would have applied the full contract. /eld, there was no contract as

there was a counter1offer to offer.