Explain briefly the law relating to communication of offer, acceptance and revocation. Is there any limit of time after which an offer cannot be revoked?
Solution
The ideas of offer, acceptance, and revocation are crucial in contract law and are the building blocks upon which a legally enforceable agreement is constructed. This section provides an explanation of these ideas and the legal concerns associated with them.
Offer: An offer is a proposition made by one party (the offeror) to another (the offeree) suggesting that the offeror is prepared to engage into a contract on particular conditions. An offer is made by one party (the offeror) to another (the offeree). In order for an offer to be considered legitimate, it must first be conveyed to the person who will be receiving it, and it must also be unambiguous and explicit. One can make an offer in a number of different ways, including verbally, in writing, or even by their behavior.
For example, if John offers to sell his car to Jane for $10,000, this would be considered an offer.
Acceptance: The act of reaching an agreement with the conditions of an offer is known as acceptance. A legally binding agreement is formed between the parties once acceptance has been given. Acceptance has to be expressed to the person making the offer, and it has to be a reaction to the offer, for it to be considered genuine. Additionally, the acceptance needs to be unconditional, which means that it can’t include any additional or different terms of any kind.
For example, if Jane agrees to buy John’s car for $10,000, this would be considered acceptance of John’s offer.
Revocation: The act of withdrawing an offer prior to it being accepted is referred to as revocation. Unless the offer is irreversible, the person who made the offer has the ability to withdraw it at any point before it is accepted. One can withdraw their acceptance of an offer in a number of different ways, including verbally, in writing, or even by their actions.
For example, if John decides to sell his car to someone else before Jane accepts his offer, he can revoke his offer to Jane.
Yes, there is a limit of time after which an offer cannot be revoked, and it is known as the option contract. An option contract is a separate contract that gives the offeree the right to accept the offer within a specified time period. During this time, the offeror is bound to keep the offer open and cannot revoke it.
For example, if John offers to sell his car to Jane for $10,000, and Jane pays John $500 for the right to accept the offer within the next three days, this would create an option contract. During this time period, John is bound to keep his offer open, and he cannot revoke it. If Jane decides to accept the offer within the specified time period, a legally binding contract is formed. However, if Jane does not accept the offer within the specified time period, the offer is no longer valid, and John is free to sell his car to someone else.
In most cases, an offer can be withdrawn at any point prior to it being accepted. The only exceptions to this rule are when the offer is irreversible or when an option contract has been established. It is essential to keep in mind that communication is the cornerstone of contract law, and all parties involved in the transaction need to be informed of the terms and circumstances of the offer, acceptance, and revocation in order to prevent any misunderstandings or disagreements from arising.