Revocation of Offer

Civil law 1466 views 3 replies

Vinayak

IPCC

119 Points Joined March 2007

Good Afternoon,

I have a doubt with regard to revocation of offer. Hence, I have created the following hyphothetical situation and kindly request you to help me in this regard.

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A(a resident of Andaman Nicobar Islands) posts his letter of offer by registered post(it is due to reach B on 6 May,2010) to B(a resident of Chennai) on 1 May, 2010 evening.

Realizing some error in his offer letter, he posts the letter of revocation by speed post 2nd,May 2010 evening(it is due to reach on 4th May 2010)...

Unfortunately due to earthquake in Andaman Nicobar Islands the next day, transportation and communication services were effected and so A's letter of revocation could not reach B, prior to his letter of offer reaching B, i.e his revocation reaches B on only 8th May, 2010 (by this time B has read A's letter of offer and sent his acceptance letter by post).

So, does A's revocation stands valid inspite of B's acceptance?

Replies (3)

Rahul Gupta

CA Final Student

1785 Points Joined February 2008

Hello Vinayak!!

The relevant provisions are as follows:

It is only after the acceptance of an offer that there arises a contract and then both the parties becomes bound by their respective promises.

Before the offer has been accepted it can be revoked. After the offer has been accepted it ripens into a contract and then it cannot be revoked.

The communication of acceptance is complete as against the proposer when the letter of acceptance is posted to him.

Once the letter of acceptance is posted the offeror becomes bound.

He becomes bound immediately on the posting of the letter to him and it makes no difference that the receipt of the letter is delayed in transit, or even if the letter is lost in the post and the offeror never receives it.

Conclusion: Applying the above provisions we can say that the revocation of offer will not be possible in any circumstances once the offer is acceptd.

Note: The answer is based on my understanding. kindly correct me if i am mistaken.

Regards

Rahul Gupta

Vinayak

IPCC

119 Points Joined March 2007

Hi Rahul,

In my case if A's revocation stands invalid (as per ur explanation), don't you feel he is made to suffer unnecesarily(as natural disaster has stopped his revocation letter to reaching B before his offer letter reaching B)

Rahul Gupta

CA Final Student

1785 Points Joined February 2008

Hi Vinayak!!

I agree that A is made to suffer unnecessarily. But let us consider the person who has accepted the offer. He might have also made an offer to someone. Thenin that case the acceptor too would have lost it.

I think the provision of the law has been made considering the various pros & cons.

Regards

Rahul Gupta