CASE STUDY RELATING TO

OFFER & ACCEPTANCE

AND
LAW OF REVOCATION
BY,
DIVYA SRIVATSA DARBHA
96

Outline
Case highlights
Area of Law
Offer and Acceptance
Law of Revocation
Case Discussion
References

Case Highlights
On 7th July, Mr. Butters made a written-offer
to Mr. Scotch for the sale of his property for a
sum of I.N.R 50 lacs
Butters mentioned in the same written-offer
that the offer would be open till the 15th of
August 09:00 hours
On 14th August Butters sold the property to
Cherry without any notification to Scotch
On the same day, i.e. 14th August Mr. Scotch
accepts the offer and sues Butters for
specific performance of the Contract

Area of Law
According to the Indian Contract Act,
1872 the case revolves around the
following areas of law:
Offer and acceptance
Law of revocation of offer

Offer and Acceptance

An offer is a proposal by one party to another to
enter into a legally binding agreement
The person making the offer is known as the
offeror, proposer, or promisor and the person to
whom it is made is called the offeree or proposee
When the offeree accepts the offer, he is called
the acceptor or promisee
A contract emerges from the acceptance of an
offer
Acceptance is the act of assenting by the offeree
to an offer
An offer when accepted becomes a promise

Law of Revocation
Revocation of offer is the withdrawal of
an offer by the offeror so that it can no
longer be accepted
Revocation takes effect as soon as it is
known to the offeree
An offeror may revoke an offer before it
has been accepted, but the revocation
must be communicated to the offeree

Q1. Identify the issues involved in this matter. When does the
contract get concluded?

Initially, Mr. Butters made an offer to

Scotch regarding sale of his property
Later, Butters sales the property to
Cherry without notifying Scotch
Scotch accepts the offer and sues
Butters for wrongful conversion of
property
The contract gets concluded as soon as
the property is being sold to Cherry

Q2. Whether the sale by Butters is

valid? Can he be held liable for
wrongful conversion of property by
making the sale on 14th Aug?
Yes, the sale by Butters is valid
But Butters should have waited till 15th for
Scotch to accept his proposal
Without notifying Scotch, Butters sells the
property to Cherry
Yes, Butters should be held liable for
wrongful conversion of property for
breaching trust

Q3. Whether Scotchs acceptance on

14th concludes the contract in his
favor?
The contract does not get concluded if
Scotch would have accepted the offer
Since, Cherry is the new holder of the
property, the contract does not get
settled in Scotchs favor

Q4. Is there implied revocation in this

case?
Yes, implied revocation does exist in this
case
When Butters is selling the property to
Cherry he is simultaneously revoking the
offer made to Scotch

References
Gulshan, S. and Kapoor, G. (1992).
Mercantile law. New Delhi: Wiley Eastern
Ltd.
Kapoor, N. (2009). Elements of Mercantile
Law. 31st ed. New Delhi: Sultan Chand &
Sons.
Definitions.uslegal.com, (2016).
Revocation of Offer Law & Legal
Definition. [online] Available at:
http://definitions.uslegal.com/r/revocation-

Lawteacher.net, (2016). Distinguish

between a contract and when an offer
can be revoked | Law Teacher. [online]
Available at:
http://www.lawteacher.net/free-law-essay
s/contract-law/distinguish-between-a-con
tract-and-when-an-offer-can-be-revoked-c
ontract-law-essay.php
[Accessed 4 Feb. 2016].
TheFreeDictionary.com, (2016).
revocation. [online] Available at:
http://legal-dictionary.thefreedictionary.c
om/revocation
[Accessed 4 Feb. 2016]

Thank You