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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 into
existence 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 telegram when 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 &)
th
(uly.
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 is
complete 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.
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 A,s 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 re.ection.
". %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 sub.ect 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.
"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.