Revocation of Contract

Revocation of contract

According to the Black’s Law dictionary Revocation is :-
The recall of some power, authority, or thing granted, or a destroying or making void of some deed that had existence until the act of revocation made it void. It may be either general, of all acts and things done before; or special, to revoke a particular thing.

5 Coke, 90.
Ford v. Greenawalt, 292 Ill. 121, 126 N.E. 555, 556;
O’Hagan v. Kracke, 300 N.Y.S. 351, 361, 165 Misc

Revocation by act of the party is an intentional or voluntary revocation. The principal instances
occur in the case of authorities and powers of attorney and wills. A revocation in law, or constructive revocation, is produced by a rule of law, irrespectively of the intention of the parties. Thus, a power of attorney is in general revoked by the death of the principal. Sweet.

 

 

LAPSE OF OFFER
Acceptance should be made before the offer lapses. An offer lapses in the
circumstances provided for in Section 6.
S. 6. Revocation how made.—A proposal is revoked—

(1) by the communication of notice of revocation by the proposer to the
other party;

(2) 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;

(3) by the failure of the acceptor to fulfil a condition precedent to acceptance; or

(4) by the death or insanity of the proposer, if the fact of his death or insanity
comes to the knowledge of the acceptor before acceptance.

 

1. Notice of revocation
Section 5 provides that “a proposal may be revoked at any time before
the communication of its acceptance is complete as against the proposer,
but not afterwards”. It has already been seen that as against the proposer,
the communication of acceptance is complete “when it is put in a course of
transmission to him, so as to be out of the power of the acceptor”. It means,
therefore, that the communication of revocation to be effective must reach
the offeree before he mails his acceptance and makes it out of his power. A
revocation is effective only when it is brought to the mind of the person to
whom the offer is made. This was laid down in Henthorn v Fraser}
The secretary of a building society handed to the plaintiff in the office
of the society an offer to sell a property at £750 giving him the right to
accept within fourteen days. The plaintiff resided in a different town and
took away with him the offer to that town. The next day at about 3.50
p.m. he sent by post his letter of acceptance. This letter was received
at the society’s office at 8.30 p.m. But before that at about 1.00 p.m.
the society had posted a letter revoking its offer. The revocation and the
acceptance crossed in the course of post. The plaintiff received the letter
of revocation at 5.30 p.m. The revocation was held to be ineffective.
Explaining the principle. Lord Herschell observed: “If the acceptance
by the plaintiff of the defendant’s offer is to be treated as complete at the
time the letter containing it was posted, I can entertain no doubt that the
society’s attempted revocation of the offer was wholly ineffectual. I think
that a person who has made an offer must be considered as continuously
making it until he has brought to the knowledge of the person to whom it
was made that it is withdrawn.”
Thus the communication of revocation should reach the offeree before
the acceptance is out of his power. An illustration to Section 5 explains the
matter. A proposes by letter sent by post, to sell his house to B. B accepts
the proposal by a letter sent by post. A may revoke his proposal at any
time before or at the moment when B posts his letter of acceptance, but not
afterwards.”

S.4. Communication when complete.—^The communication of a proposal
is complete when it comes to the knowledge of the person to whom it is made.
The communication of an acceptance is complete as
against the proposer, when it is put in a course of transmission to him, so
as to be out of the power of the acceptor;
as against the acceptor, when it comes to the knowledge of the proposer.
The communication of a revocation is complete,—
as against the person who makes it, when it is put into a 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;
as against the person to whom it is made, when it comes to his knowledge.

S. 5. Revocation of proposals and acceptances.—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.

Case Law

In the case Sadhoo Lal Motilal v. The State of M.P., AIR 1972 All 137, the tender that was presented by the party to the respective Government was accepted later. But, a telegram was subsequently sent to that respective Government withdrawing the acceptance. The court found the strong evidence of the conclusion of the contract and could not find any reason to revoke the contract. The reason is that as soon as the letter of acceptance was posted, the tender contract was concluded. Thus, revocation could not be made.

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