A makes an offer to B for the sale of radio to B for Rs. 200 only. The next day he sells the radio to C and this fact comes to the knowledge of B from his friends. Can B still accept the offer of A? [HJS 1988]

Question: A makes an offer to B for the sale of radio to B for Rs. 200 only. The next day he sells the radio to C and this fact comes to the knowledge of B from his friends. Can B still accept the offer of A? [HJS 1988]

Find the answer to the mains question only on Legal Bites. [A makes an offer to B for the sale of radio to B for Rs. 200 only. The next day he sells the radio to C and this fact comes to the knowledge of B from his friends. Can B still accept the offer of A?]

Answer

Section 4 of The Indian Contract Act, 1872 states that, “communication of a proposal is complete when it comes to the knowledge of the person to whom it is made.”Acceptance should be made before the offer lapses. An offer lapse in the circumstances provided for in Section 6.

Section 5 of the Act lays down that “A proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards.”

Further, Section 6 of the Act provides “A proposal can be revoked:

• By the communication of notice of revocation by proposer to the other party.
• By the lapse of the time prescribed in such proposal for its acceptance, or, if no time is so prescribed, by the lapse of a reasonable time, without communication of the acceptance.
• By the failure of the acceptor to fulfill a condition precedent to acceptance.
• By the death or insanity of the proposer, if the fact of his death or insanity of proposer comes to the knowledge of acceptor before the acceptance.”

The time of such revocation has been stated in Section 4, which lays down that a proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer that is before the communication of its acceptance is put in the course of transmission to the proposer. The words, “by the proposer” used in the clause imply that a notice of revocation shall be communicated to the other party by the proposer himself or his agent and not by any third person. But under English law, the acceptor must come to know about the proposal by the proposer through some source. Also, it is not necessary as under the Indian Contract law that the proposer himself should communicate revocation of the proposal to the other party, and therefore the dictum of the famous case of Dickinson v Dodds, (1876) 2 Ch D 463, would not be applied in India.

In Dickinson v. Dodds (1876, 2 Ch D 463) case, on the 10^th June, Dodds made Dickinson an offer to sell him a dwelling house for $800. The offer was left to be open until Friday, 9 AM, 12^th June. On the 11^th of June Dodds entered into a contract to sell the house to one A. One B informed Dickinson of the sale to A, but he was not acting under the authority of Dodds. Dickinson handed Dodds an acceptance of the offer a few minutes before 9 AM on 12^th but Dickinson said he is too late; he has already sold his property.

The court of appeal, in this case, held that there was no contract; relying on Dickinson’s knowledge of the sale to the third party which was communicated to him by B. The correctness of this decision is doubted by Anson on the reasoning that in any event, it is no authority since the section makes it clear that revocation of a proposal can be made by a communication of a notice of revocation by the proposer to the other party and so knowledge of the proposer’s intention to revoke coming to the offeree from whatever other source would not be good notice of revocation; as notice of revocation must come from the proposer or his agent duly appointed.

Applying the aforesaid relevant provisions of the Indian Contract Act to the present proposition at hand, here 'A’ had made an offer to B to sell him radio for Rs. 200, and the very next day 'A’ sells the same Radio to 'C’. However, there was no time period specified by A in his offer to 'B’ to give his acceptance by that particular date. 'A’ didn’t even send any communication of revocation of an offer to 'B revoking.

The fact that A sells the radio to C the very next day, hence we can say that there has not been a lapse of reasonable time without communication of acceptance by B, so in the eyes of law, offer made by A to B still subsists, and B is allowed to accept the offer of A despite his knowledge that A has sold the radio to C.

The sale of the radio to C cannot be said to be a notice of revocation of the proposal. Since there is no notice of revocation from the proposer or his agent, B can still accept the offer of A.

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Law of Contract Mains Questions Series: Important Questions for Judiciary, APO & University Exams

1. Law of Contract Mains Questions Series Part-I
2. Law of Contract Mains Questions Series Part-II
3. Law of Contract Mains Questions Series Part-III
4. Law of Contract Mains Questions Series Part-IV
5. Law of Contract Mains Questions Series Part-V
6. Law of Contract Mains Questions Series Part-VI
7. Law of Contract Mains Questions Series Part-VII
8. Law of Contract Mains Questions Series Part-VIII
9. Law of Contract Mains Questions Series Part-IX
10. Law of Contract Mains Questions Series Part-X