REVOCATION OF CONTRACT
Contract has formed the basis of the business world. It is a type of security which prevails between the parties. Contract, though a single term, is made up of several elements. Contract is formed by the offer and acceptance of the parties. The term ‘Contract’ is governed under The Indian Contract Act, 1872 and so do the terms ‘offer’ and ‘acceptance’ under section 2(a) and 2(b) of the Contract Act. It’s not with these just two terms that the contract is formed. With the offer and it’s acceptance Coupled with consideration mentioned under section 2(d) forms a valid agreement which when becomes enforceable by law forms a valid contract under section 2(h) of the Contract Act.
There are other conditions as well which influences the enforceability of the contract. These conditions have been mentioned under section 10 of the Indian Contract Act. They are:
- Free consent of the parties ( section-13,14)
- Competent to contract (section-11)
- Lawful object (section-23)
- Lawful consideration (section-25)
- Hereby not expressly declared to be void (section-24-30)
If a contract is coupled with these essential elements then it would be a binding contract.
Now coming on to the mode of communicating a contract. A contract can be accepted and revocated by the parties but there are certain rules which the parties have to follow before. Section 3 defines these modes and the later sections describes the mode Section-4 talks about the acceptance of contract whereby section-5,6 talks about the revocation.
Section-5: REVOCATION HOW MADE
Just like acceptance, the revocation is also made. For the revocation to become effective, the section says:
As against the proposer, before the acceptor posts his letter of acceptance.
As against the acceptor, before the letter of acceptance reaches the proposer.
This means that both the parties are allowed to revoke anytime before the communication reaches the other parties and that too by a faster means of communication .
Section 6: REVOCATION HOW MADE
Revocation can be revoked by the means mentioned below:
- By the communication of notice of revocation by the proposer
- By the lapse of time
- Failure of the acceptor to fulfil condition precedent
- Death or insanity of the proposer
COMMUNICATION OF NOTICE
The first mode is the notice of revocation which takes effect when the knowledge of the notice reaches the acceptor.
LAPSE OF TIME
If any time is prescribed for acceptance then the revocation should be made before the expiry of that period and if not time is mentioned in the notice then before the expiry of a reasonable period.
If there is any condition mentioned by the proposer before the acceptance then it should be fulfilled by the acceptor otherwise it would make the ground for revocation.
DEATH OR INSANITY OF THE PROPOSER
If the knowledge of the death or insanity of the proposer comes to the acceptor before the acceptance then the same can be revoked.
There are other modes of revocation as well with which the notice can be revoked and sometimes when there is a confusion whether a particular mode is applicable or not, the judicial interference is required.