Notice of Revocation: Section 6 of The Indian Contract Act, 1872 Lays Down The Methods by Which

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INTRO-

A contract is said to be complete when there is an offer and acceptance of


that offer, and there are other basic requirements which need to be fulfilled
such as free consent, lawful consideration and competency. Consensus ad
idem meaning meeting of minds for the formation of contract is also a
necessary element. But, there are certain important intermediary elements in
between which are essential and can result in the change in course of events.
The contract can terminate before attaining the finality between promisor
and promise. This termination would take place in case certain stipulations
were fulfilled. This is called revocation.

Revocation means act of annulment. Section 5 of the Indian Contract Act,


1872 lays down the rules of Revocation of Proposal. Section 5 says that a
Contract can be revoked any time before the communication of acceptance is
made to the proposer and not afterwards. Once the communication of
acceptance is made then the contract cannot be revoked.

Section 6 of the Indian Contract Act, 1872 lays down the methods by which
a revocation of proposal is made. This article deals with the methodologies
that are prescribed by the Indian Contract Act, 1872 by which revocation can
be put to practice. The following methodologies are mentioned below.

Notice of Revocation
First method is revocation of a proposal by communication of notice. A
proposal/offer may be revoked by the proposer/offeror by giving notice to
the offeree before it is accepted. Notice of revocation will take effect when it
is in the knowledge of the offeree before the communication of acceptance.

Lapse of Time
Second method is revocation of proposal by lapse of time period. If there is a
time period prescribed for acceptance, then the proposal gets revoked if the
acceptance is not communicated before expiry of the prescribed time period. 

Condition Precedent to Acceptance


A proposal can be revoked if the condition precedent to acceptance is not
fulfilled. Sometimes, a proposer may ask the offeree to fulfil certain
conditions before acceptance of the proposal, if the offeree fails to comply
with those conditions prescribed in the communication of proposal, the
proposal can revoke the offer. Thus, if these condition precedent to
acceptance is not fulfilled, the proposal/offer lapses.
Death or Insanity of Proposer
Another method by which a proposal can be revoked is by the death or
insanity of the proposer. A proposal can be revoked by the death or insanity
of the proposer, if the fact of his death or insanity comes into the knowledge
of the offeree before the communication of acceptance. 

Under English Law, a proposal can be revoked even after acceptance by the
offeree if the acceptance is made in ignorance of fact about the proposer’s
death or insanity.

Other Methods for Revocation of Proposal


Rejection of Proposal
Rejection of proposal is another method for revocation of proposal. A
proposal can be rejected if it is not accepted by the offeree. Once the
proposal is rejected it can be revived again by the offeree.

For Example: Ali by letter offers his car to Haider for INR 3,00,000. Haider
rejects the offer of Ali, now Haider cannot revive it again as once the offer is
rejected it cannot be revived again. 

Death of Offeree
Death of an offeree is also a way by which a proposal can be revoked. A
proposal which is communicated for acceptance can be revoked if the offeree
who has to communicate the acceptance is dead before the communication
of acceptance of proposal.

Counter Offer
A proposal is revoked if a counter offer is made to it. Offeree accepts the
proposal after modifications and variations in the original offer, then the
proposal made by the offeree is called a counter offer. The acceptance of
counter offer amounts to rejection of original offer. 

In the case Airfred Schontank V. Muthurayna Chetty, (1892) 2 Mad LJ


57, the court held when an offer gives the offeror an option to accept within
a fixed period, it may be withdrawn even before the expiry of that period
unless there is some consideration for keeping it open.
In the case J.K. Enterprises v. The State of M.P., AIR 1997 MP 68, the
court held communication of the revocation of proposal has to be crystal
clear and to the correct address. In this case the revocation letter was being
sent by fax message. Unfortunately, it reached the wrong address. The court
considered it to be of no effect.

In the case of Asia Tech. Nagercoil V. D.G. Ministry of Road Transport


and Highways, New Delhi, AIR 2010 Mad 54, the court held where the
tenders submitted by bidders never opened as its opening stood postponed,
the tenders cannot be said to have been accepted. The tenderers have the
right to withdraw their proposal.

Conclusion
The contracts are considered closed when the acceptance is communicated.
Putting letter of acceptance in course of transmission and the contract
completes. That is the reason that even when the revocation of proposal has
been communicated, the contract does not end as there was communication
of acceptance before revocation of proposal by the proposer.

The courts sometimes interfere in such cases by modifying the contract


between the parties. The courts are not supposed to modify the contractual
term between the parties to the contract. It is not the duty of the courts to
make the contracts for the parties. It is the duty of the parties to make their
own contract and it is not for the courts to interfere in such commercial
nature of business.

However, considering the interpretation of law involved, the courts are


frequently asked to dig into the question of the validity of the revocation of a
proposal. It is certainly evident from this article that the revocation is a
statutorily provided right of both parties and moreover, revocation of
proposal has an overriding effect over the accepted principles of
communication of proposal and acceptance of proposal.

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