The Indian Contract Act 1872 Section 5: Revocation Rules
Section 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.
Illustrations
(a) A proposes, by a 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 B posts his letter of acceptance, but not afterwards.
(b) B accepts A’s proposal by a letter sent by post. B may revoke his acceptance at any time before the letter of acceptance is received by A, but not afterwards.
Explanation of The Indian Contract Act 1872 Section 5
Section 5 of the Indian Contract Act, 1872 governs the revocation of proposals and acceptances, a key aspect of contract revocation in Indian contract law. It establishes precise timelines for proposal withdrawal and acceptance withdrawal during contract negotiation, ensuring clarity in Indian contract rules. The section integrates with Section 4 (communication completion) to define when parties can withdraw:
- Revocation of a Proposal:
- A proposal (per Section 2(a)) can be revoked through proposal withdrawal before the acceptance is complete as against the proposer, per Section 4 (i.e., when the acceptor sends the acceptance, such as posting a letter).
- After the acceptor sends the acceptance, contract revocation is not possible, as the contract negotiationphase advances to formation.
- Example: A offers to sell a car to B via letter. A can initiate proposal withdrawal before B posts the acceptance letter (Illustration a).
- Revocation of an Acceptance:
- An acceptance (per Section 2(b)) can be revoked through acceptance withdrawal before the acceptance is complete as against the acceptor, per Section 4 (i.e., when the proposer receives the acceptance).
- Once the proposer receives the acceptance, acceptance withdrawal is barred, finalizing the contract.
- Example: B posts an acceptance letter but sends a telegram for acceptance withdrawal before A receives the letter. The contract revocation is valid if the telegram arrives first (Illustration b).
Section 5 ensures flexibility in contract negotiation by allowing contract revocation before communication is finalized, while enforcing commitment once key steps are complete, per Indian contract rules and the postal rule in Section 4.
Key Points The Indian Contract Act 1872 Section 5
- Purpose: Section 5 Indian Contract Act defines timelines for revocation of proposals and acceptances, ensuring clarity in contract revocation.
- Proposal Withdrawal: A proposal can be revoked before the acceptor sends the acceptance, enabling proposal withdrawal.
- Acceptance Withdrawal: An acceptance can be revoked before the proposer receives it, allowing acceptance withdrawal.
- Link to Section 4: Relies on Section 4’s communication completion rules to set contract revocation deadlines.
- Postal Rule: Contract negotiation is governed by dispatch (for the sender) or receipt (for the recipient), per Section 4.
- Relevance: Essential for understanding Indian contract rules and resolving disputes in contract formation.