Proposals and Acceptance and its Revocation

1. Introduction

An important essential of a contract is that parties to the contract should have reached agreement. Generally speaking, an agreement is made when one party accepts a proposal, which is made by other party. It means that proposal and acceptance are very important as far as making of a contract is concerned.

2. Definition of Proposal

Proposal is the first as far as process of making a valid contract is concerned. Literally proposal means act of offering or suggesting something for acceptance. As a legal term, proposal can be defined as presentation of willingness by one person to another person for doing or abstaining from doing something so as to obtain the assent of the second person to such act or abstinence.

3. Definition of Acceptance

When a person makes proposal to another person and this another person accepts proposal, then it is said that proposal has been accepted and such acceptance of proposal is called acceptance.

4. Essentials of Valid Acceptance

Followings are main essentials of a valid acceptance.

i. Free Consent

It is essential for a valid acceptance that it should be made through free consent.

ii. Correspondence between Proposal and Acceptance

It is necessary that there should be correspondence between proposal and acceptance.

iii. communication of Acceptance

It is important that acceptance should be communicated through some usual and reasonable manner.

iv. Unconditional Acceptance

It is essential that acceptance should be unconditional.

v. Absolute Acceptance

It is necessary that acceptance should be absolute.

vi. Acceptance before Revocation of Proposal

It is important that acceptance should be made before revocation of proposal.

vii. Who can make Acceptance

It is essential that acceptance should be made by such party to whom proposal is made.

viii. To whom acceptance can be made

It is necessary that acceptance should be made by one party to another party. In other words, a party cannot accept his own proposal, but other party should make acceptance of his proposal.

ix. Same Meeting

It is important that acceptance should be made in the same meeting in which proposal has already been made.

5. How is communication of acceptance complete?

Communication of acceptance is considered completed in comparison of proposer and acceptor through following two ways.

i. Communication to Proposer

Communication of acceptance is complete against proposer when it is put in a course of communication to him and it becomes out of the power of the acceptor.

ii. Knowledge of Proposer

Communication of acceptance is complete as against the acceptor, when it comes to the knowledge of the proposer.

6. Revocation of Proposal and Acceptance

It has been settled in contract Act that proposal and acceptance can be revoked. Following points are important as far as revocation of proposal and acceptance is concerned.

i. Revocation of Proposal

A proposal can be revoked at an time before the communication of its acceptance is complete as against the proposer, but not afterwards.

ii. Revocation of Acceptance

An acceptance can be revoked at any time before its communication is complete as against the acceptor, but not afterwards.

iii. Ways for Revocation of Proposal

A proposal can be revoked through following four ways

a. Communication of Notice

A proposal can be revoked by communication of notice of revocation by the proposer to the other party.

b. Lapse of Time

A proposal can be revoked by lapse of time, which is prescribed in the proposal for its acceptance. However, if no such time is prescribed in the proposal, proposal can be revoked by lapse of a reasonable time, during which its acceptance is not communicated.

c. Failure of acceptor

A proposal can be revoked by the failure of acceptor to fulfill a condition precedent to acceptance.

d. Death of Insanity of Proposer

A proposal can be revoked by the death or insanity of proposer, if fact of his death or insanity comes to the knowledge of acceptor before acceptance.

Finial Analysis

To conclude, it can be stated that conditional proposal is not convenient for making of contract. The reality is that such proposal cannot be accepted because such proposal is itself rejection of proposal.

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