COMMUNICATION OF OFFER AND ACCEPTANCE

COMMUNICATION WHEN COMPLETE

COMMUNICATION OF OFFER (SECTION 4) :

The communication of an offer is complete when it comes to the knowledge of

the person to whom the offer is made.

In other words, when the offeree comes to know about the offer, the

communication is said to be completed.

Let us consider,

Mr. Habib proposes by letter, to sell a house to Mr. Kumar for Rs.100000. The

letter is posted on 6th August, 2003. The letter reaches Mr. Kumar on 8th

instant. The communication of the offer is complete when Mr. Kumar, the

offeree, receives the letter i.e., on 8th.

COMMUNICATION WHEN COMPLETEAS AGAINST THE PROPOSER:  The communication of an acceptance is complete as against the

proposer, when the acceptance is put in a course of transmission to him,

so as to be out of power of the acceptor.

Let us consider,

Mr. Habib offer by letter, to sell a house to Mr. Kumar for Rs. 100000. The

letter is posted on 6th August. The letter reaches Mr. Kumar on 8th. If Mr.

Kumar accepts the offer of Mr. Habib in the above case and sends a

letter by post on 9th instant, the communication of the acceptance

against Mr. Kumar is complete on 9th instant.

COMMUNICATION WHEN COMPLETE

AS AGAINST THE ACCEPTOR:  The communication of an acceptance is complete as against the

acceptor, when it comes to the knowledge of the proposer.

As for instance,

Mr. Habib offer by letter, to sell a house to Mr. Kumar for Rs. 1,00,000.

The letter is posted on 6th August, 2003. The letter reaches Mr. Kumar on

8th instant. If Mr. Kumar accepts the offer of Mr. Habib in the above case

and sends a letter by post on 9th instant which reaches Mr. Habib on 10th

instant, the communication of acceptance against Mr. Habib is

completed on 10th instant.

REVOCATION OF OFFER AND ACCEPTANCE (SEC 5):

A person making an offer or accepting an offer already made to him

retains the option to withdraw the said offer/acceptance. Such a

withdrawal of offer/acceptance made by the offeror or acceptor is

termed as ‘revocation’.

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

EXAMPLE FOR REVOCATION

Mr. Habib proposes, by a letter sent by post, to sell his house to

Mr. Kumar for Rs. 1,00,000.

Mr. Kumar accepts the proposal by a letter sent by post.

Mr. Habib may revoke his proposal at any time before or at the

moment when Mr. Kumar posts his letter of acceptance, but not

afterwards.

Mr. Kumar may revoke his acceptance at any time before or at the

moment when the letter communicating it reaches Mr. Habib ,

but not afterwards.

HOW REVOCATION IS MADE

A proposal is revoked -

by the communication of notice of revocation by the proposer to the

other party;

by the lapse of the time prescribed in such proposal for its acceptance,

or, if no time is so prescribed, by the lapse of a reasonable time, without

communication of the acceptance;

by the failure of the acceptor to fulfill a condition precedent to

acceptance; or

by the death or insanity of the proposer, if the fact of the death or

insanity comes to the knowledge of the acceptor before acceptance.

ESSENTIAL OF VALID ACCEPTANCE Acceptance must be communicated to the Proposer:

If the offeree is silent and give no acceptance to the offeror , no contract is formed.

Acceptance must be made within reasonable time:

Acceptance to be valid must be within the time allowed by the offeror and if no

time is specified ,it must be made within the reasonable time .Acceptance made

after the offer has been withdrawn is invalid.

It must be according to the mode prescribed or usual or reasonable mode :

Acceptance has to be made in the manner prescribed or indicated by the offeror.

Section7(2)states that if the acceptance is not made in the manner prescribed ,the

proposer may within the reasonable time after the acceptance is communicated to

him insist that the acceptance must be made in the prescribed manner.

CONTD…

Acceptance must be unqualified and without condition ie., it should be

absolute and unqualified.

When the acceptor puts in a new condition while accepting, the offer

already offered by the proposer is not complete until the proposer

accepts the condition

An acceptance with a variation is no acceptance; it is simply a counter

proposal which must be accepted by the original proposer before a

contract is made.

CONTD.. Mr. Habib offered to sell land to Mr. Kumar at Rs. 1,00,000.

Mr. Kumar replied accepting the offer and enclosing Rs.50,000 and

promising to pay balance amount by monthly installments of Rs.25,000

each.

Since Mr. Kumar accepted the offer subject to making payment in

installment ,it was held that acceptance was conditional and qualified .

CONTD… The acceptor must be aware of the proposal at the time of the offer :

Acceptance follows offer. If Mr. kumar is not aware of the existence of the

offer and conveys his acceptance ,no contract comes into existence. There

must be knowledge of the offer before anyone could consent to it .

Acceptance must be given before the offer lapse or before the offer is

revoked :

It means that acceptance should be communicated by Mr. Kumar, while the

offer is in force that is before the offer has been revoked or offer has lapsed.

Acceptance cannot be implied from silence:

When Mr. Habib offers to sell his house for Rs.100000 and if Mr. Kumar

remains silent , it doesn’t imply any acceptance

WHO MAY ACCEPT : An offer can be accepted by the person to whom it is made , Where

offer is made by A to B ,the acceptance by C would be inoperative.

Let us consider,

Mr. Habib sent an offer to firm with whom he had accounts. Mr. Raj

who had just taken over the said firm got a letter addressed to old

firm ,accepted the offer and sent the goods .

Mr. Raj sued for the price of the goods. The court held that there was

no contract since the order was to the old firm and the acceptance by

the new firm .