How Does an Offer Come To An End?

An offer comes to an end by revocation.

Revocation or lapse of an offer:

According to Sec. 6, an offer is revoked in the following circumstances:

1. By notice:

An offer can be revoked by the communication of notice of revocation before acceptance is complete as against the offeror, i.e., before the letter or acceptance is posted.

Example:

A offers his house to B for Rs. 20000. Before B accepted the offer, A withdrew his offer by informing B. There will be no contract as the offeror has withdrawn his offer.

2. By lapse of time:

If time is prescribed for the acceptance of an offer, it lapses by not being accepted within the time prescribed. However, if no time is prescribed, it lapses by the expiry of a reasonable time.

What is reasonable time? It will depend upon the facts and circumstances of each case. In one case a period of one week may be reasonable, while in another, even a period of the one month may not be reasonable. It is determined by the Court.

3. By the failure of the acceptor to fulfill a condition precedent to acceptance:

Acceptance must be absolute, i.e. all the conditions of the offer must be fulfilled, otherwise the offer will lapse.

Example:

A applied for 100 shares of a company on the condition that he should be appointed Secretary of the company. The company allotted him shares but did not appoint him as Secretary. The offer in this case lapsed as the company did not fulfill the condition precedent to acceptance, i.e., it did not appoint A as the Secretary of the Company.

4. By the death of the proposer: If the fact of death of the proposer comes to the knowledge of the acceptor before acceptance, the offer is revoked.

5. By the insanity of the proposer: If the fact of death of the proposer comes to the knowledge of the acceptor before acceptance, the offer is revoked.

In addition, an offer lapses by the following:

6. By counter offer: Counter offer means not accepting the offer as it is, but making a fresh offer.

Example :

A offers his watch to B for Rs. 200. B instead of saying yes, offers only Rs. 150. A’s offer is revoked and there is no contract.

8. Revocation by not accepting the offer in the mode prescribed:

An offer should be accepted in the mode prescribed. If an offer is not accepted according to the mode prescribed, the offeror can reject such acceptance by giving notice to the offeree within a reasonable time that his acceptance was not according to the prescribed or usual mode. However, if he does not raise May objection, he is deemed to have accepted the acceptance.