Discuss the Legal Rules Relating to the Communication of Offer, Acceptance and Revocation.
The communication of offer and acceptance must be complete so as to bind the concerned parties because as soon as the communication is complete the parties loose the right of withdrawal or revocation. The legal provisions relating to the communication of offer and acceptance are as under:
Communication of Offer:
The communication of proposal is complete when it comes to the knowledge of the person to whom it is made [Section 4]. Thus, communication of offer is not complete unless it comes to the knowledge of the person to whom it is made, Example X offers by a letter on 1st April, 2007 to sell his watch to Y for Rs. 1,000, The letter reaches Y on 3rd April, 2007. The communication of offer is complete on 3rd April.
Communication of Acceptance:
Communication of acceptance is complete
- As against the proposer when it is put in course of transmission to him so as to be out of the power of the acceptor to withdraw it and
- As against the acceptor, when it comes to the knowledge of the proposer [Section 4].
The offeror becomes bound the moment acceptor sends the acceptance and it is now out of his power to withdraw it. But as against the acceptor himself it is complete only when it comes to the knowledge of offeror, Example. If in response to a letter of offer B sends acceptance letter on 4th April, 2007 reaching A on 6th April, 2007 the communication of acceptance is complete as against A on 4th and as against B on 6th April.
Communication of Revocation:
Revocation means withdrawal communication of revocation is complete
- As against the person who makes it when it is put into course of transmission to the person to whom it is made, so as to be out of the power of the person who makes it, and
- As against the person to whom it is made, when it comes to his knowledge.
Time for Revocation of Offer and Acceptance:
Section 5 provides that a proposal may be revoked at any time before the communication of acceptance is complete as against the proposer but not afterwards. An acceptance may be revoked any time before the communication of acceptance is complete as against the acceptor but not afterwards. This means that acceptance can be revoked any time before the acceptance comes to the knowledge of the offeror,
Contract over telephone:
One may enter into contract either
- When he is. face to face with another person or
- Over telephone or
- Through fax/ e-mail.
When one is face to face with another person, the contract comes into existence immediately after the negotiations are completed with the process of offer and acceptance. Contracts over telephone are just Like contracts face to face. But the offeree must make it sure that his acceptance is received by the offeror otherwise there will be no contract if communication of acceptance is not complete.