In the illustrations (a) and (b) given above, there arises a question: whether the revocation of offer by A is operative or not, or whether the revocation of acceptance by B is operative or not? For answering this question, it is necessary to know the limit of time within which an offer or acceptance can be revoked. Section 5 deals with this question and provides as follows:
“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.”
Applying Section 5 to our illustrations given above: A may revoke his offer at any time before or at the moment when B posts his letter of acceptance, i.e., 9th, but not afterwards. B may revoke his acceptance at any time before or at the moment when the letter of acceptance reaches A, i.e., 11th, but not afterwards.
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ADVERTISEMENTS:
While discussing the rule regarding ‘communication of revocation’, ‘we have-observed earlier ‘that the revocation of offer is complete as against B (the acceptor) on 10th, when the letter of revocation is received by him.
As B posts his letter of acceptance on 9th and the communication of acceptance is complete as against on the day of posting itself, i.e., 9th, A’s revocation of his offer, which is complete as against B on 10th, is inoperative. S’s acceptance is valid and there shall be a binding contract.
For the sake of practice of the rules regarding communication of offer, acceptance and revocation discussed above, we take another illustration.
ADVERTISEMENTS:
Illustration:
(i) A offers by letter, to sell his car to B for Rs 75,000 on 1st August. B receives the letter on 3rd August.
(ii) B puts the letter of acceptance in post on 4th August, which reaches A on 6th. (iii) A writes a letter of revocation of his offer and posts it on 3rd August, which reaches B on 5th August.
Rules applied, (i) Communication of offer is complete on 3rd August, i.e., when it comes to the knowledge of B.
ADVERTISEMENTS:
(ii) Communication of acceptance is complete as against the proposer, i.e., A, when the letter of acceptance is posted, i.e., on 4th, and as against the acceptor i.e., B, when the letter of acceptance reaches the proposer i.e., on 6th August.
(iii) Revocation of offer is complete as against A on 3rd August, when the letter of revocation is posted, and as against B on 5th August, when the letter of revocation is received by him.
(iv) As B has put his acceptance into transmission on 4th August and revocation of offer is communicated to him on 5th August, his acceptance is valid and there shall be a binding contract. A cannot revoke his offer after 4th August, when the communication of acceptance is complete as against him.