Revocation PDF

REVOCATION WHEN AN ACCEPTANCE IS COMPLETE As against the Offeror: For the proposer, the communication of the acceptance is complete when he puts such acceptance in the course of transmission. After this it is out of his hand to revoke s...

REVOCATION WHEN AN ACCEPTANCE IS COMPLETE As against the Offeror: For the proposer, the communication of the acceptance is complete when he puts such acceptance in the course of transmission. After this it is out of his hand to revoke such acceptance, so his communication will be completed then. So, for example, A accepts the offer of B via a letter. He posts the letter on 10th July and the letter reaches B on 14th For B (the proposer) the communication of the acceptance is completed on 10th July itself. As against the Acceptor: The communication in case of the acceptor is complete when the proposer acquires knowledge of such acceptance. So in the above example, A’s communication will be complete on 14th July, when B learns of the acceptance.  revocation of offer - anytime before the acceptance is done/complete revocation of acceptance - anytime as long as the offeror is unaware of the acceptance notice INTRODUCTION  When can an offer / acceptance be revoked is as important as how one revokes  Anyone knows that an offer can only be taken back before acceptance  For ‘acceptance’, however, it is more complicated, i.e.  an acceptance can only be ‘cancelled’ as long as the offeror is unaware of it 2 © Dr Izura Masdina  REVOCATION OF OFFER 3 INTRODUCTION  Recall: s.6 on how offer is revoked  Notice  Time © Dr Izura Masdina  Non-compliance with condition  Death/mental illness of offeror  When an offer can be revoked:  S.5(1)  Read together with s.4(2)(a)  When the revocation is valid:  S.4(3)(a) and s.4(3)(b)  Note: remember postal rule 4  s.5(1) A proposal may be revoked at any time before the communication of its acceptance is complete as © Dr Izura Masdina against the proposer, but not afterwards s.4(2)(a) The communication of 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 A proposal may be revoked at any time before the 5 letter of acceptance is posted. AS AGAINST THE PROPOSER  S.4(3) WHEN THE REVOCATION IS VALID The communication of revocation is complete (a) as against the person who makes it, when it is put into a course of transmission to the person © Dr Izura Masdina to whom it is made, so as to be out of the power of the person who makes it, and  Binds offeror once he posts his letter of revocation (can’t take it back) (b) as against the person to whom it is made, when it comes to his knowledge. REFER TO WHEN HE RECEIVE THE LETTER, NOT WHEN HE READ SUCH LETTER  Binds acceptor once he receives the letter of revocation of offer 6  REVOCATION OF OFFER s.5(1) & s.4(2)(a) s.4(3) A proposal may be The communication of revocation is complete © Dr Izura Masdina revoked at any time (a) as against the person before the who makes it, when communication of its it is put into a course of transmission to acceptance is complete the person to whom as against the proposer it is made … and ie can revoke offer so long as (b) as against the person letter of acceptance not posted to whom it is made, yet when it comes to his 7 knowledge  So what about instantaneous communication?  S.5(1) still applies, but not s.4(2) AS SECTION 4(2) DEALS WITH POSTAL RULE  S.4(2) deals with postal rule  S.5(1)... A proposal may be revoked at any time before the communication of its acceptance is © Dr Izura Masdina complete as against the prop os e r , b u t n ot afterwards  Instantaneous: Acceptance is complete when it is heard by the proposer  No distinction between when it is complete against proposer or acceptor  Bhagwandas case, Entores case Note: however, it is argued that using s.4(2) Contracts Act 8 should not be a problem.  s.5(1) A proposal may be revoked at any time before the communication of its acceptance is complete as © Dr Izura Masdina against the proposer, but not afterwards s.4(2)(a) The communication of 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 So, you can revoke your proposal so long as it is 9 before acceptor says his acceptance.  BYRNE & CO V LEON VAN TIENHOVEN [1874-1880]  Oct 1 : D posted a letter of offer  Takes 10-11 days to arrive © Dr Izura Masdina  Oct 8: D posted letter of revocation  Oct 11: P telegraphed acceptance  Oct 20: P receives letter of revocation of offer Consider: When was the revocation of offer valid? YES When was the contract binding on D? 10  REVOCATION OF ACCEPTANCE 11 INTRODUCTION  How, is as per s.3 … “act or omission”  When, is as per s.5(2) © Dr Izura Masdina  In line with s.4(2)(b)  When the revocation is valid  S.4(3)(a) and s.4(3)(b) 12  s.5(2) ACCEPTANCE MAY BE REVOKED AT ANY TIME BEFORE COMMUNICATION OF ACCEPTANCE COMPLETE AGAINST THE ACCEPTOR An acceptance may be revoked at any time before the communication of its acceptance is complete © Dr Izura Masdina as against the acceptor, but not afterwards s.4(2)(b) COMMUNICATION OF ACCEPTANCE COMPLETE AGAINST ACCEPTOR WHEN IT COMES TO THE KNOWLEDGE OF THE OFFEROR (WHEN HE RECEIVE THE ACCEPTANCE LETTER) The communication of acceptance is complete as against the acceptor, when it comes to the knowledge of the proposer. May revoke acceptance anytime before letter of acceptance 13 is received BY THE OFFEROR  s.4(3) WHEN REVOCATION OF ACCEPTANCE IS COMPLETE? The communication of revocation is complete (a) as against the person who makes it, when it is © Dr Izura Masdina 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. Once acceptor posts revocation of acceptance, he cannot rescind it. 14  REVOCATION OF ACCEPTANCE s.5(2) & s.4(2)(b) s.4(3) A acceptance may be The communication of revocation is complete © Dr Izura Masdina revoked at any time (a) as against the person before the who makes it, when communication of its it is put into a course of transmission to acceptance is complete the person to whom as against the acceptor it is made … and ie when it comes to the (b) as against the person to whom it is made, knowledge of the when it comes to his 15 proposer knowledge Scenario  Oct 1 : D posted a letter of offer  Takes 10-11 days to arrive  Oct 11: P posted acceptance © Dr Izura Masdina  Oct 12: P posted revocation of acceptance  Oct 22: D receives letter of acceptance and revocation of acceptance Consider: When was acceptance valid? When was the revocation of acceptance valid? 16 © Dr Izura Masdina 17 END