There must be a request that the other party needs to support in order to establish a legally enforceable contract. Once the other party supports a proposal and it is correctly conveyed to the party making the proposal, it becomes a contractual contract if the purpose and consideration is not unlawful and the parties agree to build a legal relationship. The parties can not go back on their respective agreements until it becomes a binding contract. A proposal or approval can be withdrawn by the parties at any time before the communication of the proposal to the other party is completed.
PROPOSAL AND APPROVAL CORRESPONDENCE :
When the proposal is approved, legal relationships between the two parties are established. To prevent confusion between both sides, it is necessary to have good communication and a clear understanding of it. The conversation takes place in real time when the parties meet face-to-face and the offer and acceptance can be conveyed on the spot, causing no misunderstanding. In company, however, communication often takes place via letters and emails, etc. So, the timeline of contact is important in this situation.
All contact should be in compliance with the mode prescribed. If no mode is prescribed, an appropriate mode must be used for communication. If the offer is not approved in accordance with the prescribed or normal mode, the offer will expire if the offeror notifies the offree within the same reasonable period of time that the acceptance is not in line with the agreed mode.
REVOCATION OF PROPOSAL:
Revocation of Proposal In order to be out of the power of the acceptor, the correspondence of approval of a proposal is complete against the proposer when it is placed in the course of transmission to him (Sec 4, Indian Contract Act 1872). Before the other party accepts the bid, the proposed party must convey the revocation to the other party.
If the revocation has been conveyed to the other party, the initial proposal is cancelled because, since the proposal is no longer in effect, the other party cannot legally accept the proposal. As early as it has been reported to the appropriate party, revocation comes into effect. The revocation of the proposal is dealt with in section 5 of the Indian Contract Act. By sending the other party a notice of revocation, a resolution may be withdrawn.
The notice of revocation may be direct or indirect and may be submitted by a third party. If the contact is indirect, a “reasonable person” requires to be explicit, unambiguous and understood and should be conveyed by a credible source. Offers made by a publication are an unique circumstance of anything. Without directly contacting the offeree, these deals can be withdrawn by a notification in that document.
In section 4 of the Act, the notice of revocation is discussed.
A revocation’s contact is complete:
(a)When it is put into a path of transmission to the person to whom it is made, as being against the person who makes it, so as to be out of the power of the person making it;
(b)When it comes to his understanding, as opposed to the individual to whom it is created.
There are two variables to take into account in the communication of acceptance, the mode of acceptance and then the moment of acceptance. Acceptance can be by an act involving gestures, oral or written contact by telephone, letters, e-mails, fax, etc. or by actions such as boarding a bus, etc.
WHEN IS ACCEPTANCE FINISHED?
The offeree can approve a proposal at any time before the disclosure of the revocation against him is complete. Once approved by the offeree, the approval notice is complete:
(a)As against the proposer, so as to be out of the power of the acceptor, when it is placed in a path of transmission to him;
(b)When it comes to the awareness of the proposer, as opposed to the acceptor.
REVOCATION OF ACCEPTANCE:
Revocation of Acceptance Can this approval be reversed or cancelled by the accepter? Yes, before the correspondence of approval reaches the proposer, the accepter will cancel this acceptance. As against the acceptor, that is before the acceptance correspondence is complete. There could be a legitimate revocation of acceptance if the revocation of acceptance has reached the proposer before the acceptance comes to the attention of the proposer. The revocation of acceptance shall be complete only at any time until, as against the acceptor, the notice of acceptance is given, but not thereafter.
COMMUNICATION OF WITHDRAWAL OF ACCEPTANCE:
For the revocation of acceptance, the correspondence rules for the revocation of the bid would also be valid. When it comes to information, the correspondence with the proposer is complete.
A proposal and approval can be reversed in a nutshell at any time before a binding contract is formed. In order to create a binding contract, a proposal may be revoked any time before the approval against the proponent is complete. And an acceptance may be revoked any time before the acceptance correspondence against the acceptor is complete. The contact mode should be as prescribed. In the light of the advances of e-commerce and use of e-contracts the conventional rules of contract should be revisited so as to appeal to the new forms of communication to establish a binding contract.