An offer, its acceptance and their revocation (withdrawal) to be complete when it must be communicated. When the contracting parties are face to face and negotiate in person, a contract comes into existence the movement the offeree gives his absolute and unqualified acceptance to the proposal
made by the offeror.
Rules regarding the communication of offer, acceptance and revocation are laid down in section 4, as follows.
Communication of offer: The following are the rules regarding communication of offer:
1) The communication of an offer is complete when it comes to the knowledge of the person to whom it is made.
2) An offer may be communicated either by words spoken (or) written (or) it may be inferred from the conduct of the parties.
3) When an offer/proposal is made by post, its communication will be complete when the letter containing the proposal reaches the person to whom it is made.
Example: ‘A’ makes proposal to ‘B’ to sell his house at a certain price. The letter is posted on 10th July. It reaches ‘B’ on 12th July. The communication of offer is complete when ‘B’ receives the letter (i.e.., on 12th July).
Communication of acceptance:
The following are the rules regarding communication ofacceptance:-
1) Communication of an acceptance is complete:- a) As against the proposer/offeror when it is put into the certain course of transmission to him, so as to be out of the power of the acceptor.
b) As against the acceptor, when its comes to knowledge of the proposer.
2) When a proposal is accepted by a letter sent by the post the communication of acceptance will be complete:-
a) As against the proposer when the letter of acceptance is posted and
b) As against the acceptor when the letter reach the proposer.
Communication of revocation:
The following are the rules regarding communication of revocation:
1) As against the person who makes it, when it put into a course of transmission.
2) As against the person to whom it is made, when its comes to his knowledge.
Example: ‘A’ proposes by a letter, to sell a house to ‘B’ at a certain price. The letter is posted on 15th may. It reaches ‘B’ on 19th may. ‘A’ revokes his offer by telegram on 18th may. The telegram reaches ‘B’ on 20th may. The revocation is complete against ‘A’ when the telegram is dispatched (i.e.., in 18th may). It is complete as against the ‘B’ when he receives it (i.e.., on 20th may).