contract offer.docx - 1.0 REVOCATION OF OFFER There may be situations where an offeror who has communicated his offer changes his mind and wishes to

contract offer.docx - 1.0 REVOCATION OF OFFER There may be...

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1.0 REVOCATION OF OFFER There may be situations where an offeror who has communicated his offer changes his mind and wishes to withdraw his offer. The Contracts Act provides for the rules as to (i) when an offer may be revoked and when the communication of the revocation is complete; and (ii) the different modes to revoke an offer. 1.1 WHEN AN OFFER MAY BE REVOKED AND WHEN COMMUNICATION COMPLETE Section 5(1) of the Contracts Act sets out when an offer may be revoked as follows: A proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards. This section must be read with s 4(2)(a) of the Contracts Act (on communication of acceptanceas against the proposer) which states that: The communication of an acceptance is complete – (a) 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, Reading both sections together, thus, an offer may be revoked at any time before the acceptance has been sent to the proposer. Therefore, even though the proposer has put his proposal in a course of transmission to the acceptor, the proposer is still free to revoke it as long as the acceptor’s acceptance has not been put in a course of transmission to the proposer, so as to be out of the power of the acceptor. This rule is explained in the illustration to s 5 of the Contracts Act that “ A may revoke his proposal at any time before or at the moment when B posts his letter of acceptance, but not afterwards”. It is, however, still necessary to determine when the communication of the revocation of the proposal is complete. Section 4(3) of the Contracts Act provides that the communication of a revocation is complete: (a) 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, and (b) As against the person to whom it is made, when it comes to his knowledge. Thus, the communication of revocation of a proposal is complete as against the proposer who revokes, when he has sent out the notice of his revocation. However, it will only be complete as against the person to whom it is made when the said person receives the notice of revocation of the proposal. In Byrne & Co v Leon Van Tienhoven & Co , 1 the defendants posted a letter in Cardiff on October 1, addressed to the plaintiffs in New York, offering to sell 1000 boxes of tinplates. It 1 [1874-1880] All ER 1432
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should be noted that it takes 10 or 11 days for a letter posted at either place to reach the other. On October 8, the defendants posted a letter revoking the offer. The plaintiffs telegraphed their acceptance on October 11 and confirmed it in a letter posted on October 15. The letter of revocation reached the plaintiffs on October 20.
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  • Fall '15
  • Dodds

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