An offer may revoke in any of the following ways :( Sec.6).
1-Notice of revocation:
An offer can be revoked by sending a notice of revocation to the other party. It means that the offeror may revoke his offer at any time before acceptance, even though the period of acceptance of offer has not yet expired. This way the offeree can not create a contract by accepting the revoked offer.
Example:
A, at an auction gives the highest bid to buy B,s goods. He withdraws the bid before the fall of hammer. The offer is revoked.
2-Laps of time:
When the offer is kept open for a specified time period, it may terminate if it is not accepted with in that period. If the offer does not specify any time period, it terminates after laps of a reasonable time. The reasonable time depends upon the circumstances of each case. If the commodity is perishable, the reasonable time will be relatively shorter.
Example:
N offered to buy shares of a company G, on 6th may. G allotted shares to N on 20th November. N refused to accept them. Held that the offer had lapsed by delay in accepting. (R.V Hotel Co. vs. Montefiore).
3-Failur to fulfill condition:
If an offer consist some conditions and the offeree fails to fulfill these conditions, the offer terminates.
Example:
W offers to sell his cycle to X, for Rs 7,000 if X gets admission in AWKUM. X fails to get admission, the offer is revoked.
4-Death or insanity of offeror:
An offer terminates on death or insanity of the offeror, if the offeree comes to know about the death or insanity of offeror before his acceptance. If the offeree does not know about the death of offeror and gives his acceptance, it is valid acceptance. It results in a valid contract and legal representatives of the deceased offeror will be bound by the contract.
Example:
Q requested R, to give credit to S and guaranteed payment up to Rs 2 lac. Q died and R in ignorance of this fact continued to give credit to S. R sued X, s legal representatives on the guarantee. Held, that the legal representatives were liable.
5-Revocation of offer by offeree:
If the offeree rejects the offer and communicates the rejection to the offeror, the offer terminates even though the period for acceptance of offer has not yet expired.
Example:
A offers to sell his car to B and keeps the offer open for 20 days. B refuses after five days. It terminates although the period has not yet expired.
6-Counter offer by offeree:
When an offer is accepted with some changes in the terms of the offer, such acceptance is called counter offer. An offer terminates when a counter offer is made. The party making a counter offer can not accept the original offer.
Examples:
a- W offers to sell his house to F for Rs 6 lac. F counter offers Rs 5 lac. Later, even if F is ready to pay Rs 6 lac, the original offer is terminated.
b- A offered to sell his farm to B for Rs 4 lac. B offered 3 lac. A refused the offer. Subsequently B offered 4 lac. Held, there was no contract as B by offering 3 lac had rejected the original offer. (Hyde vs. Wrence).
7-Death or insanity of offeree:
An offer can be accepted only by the offeree. it can not be accepted by his legal representatives upon his death. if the offeree dies or become insane before acceptance, the offer terminates.
Example:
A offers to sell his cycle to B. B dies before acceptance. The offer terminates.
8- Subsequent illegality:
An offer lapses if become illegal before its acceptance. An offer may also terminate if it becomes illegal due to change in law before its acceptance by the offeree.
Example:
A offers to sell 20 bags of wheat to F for Rs 4,000. Before its acceptance, a law bans the sale of rice. The offer terminates.
9- Destruction of subject matter:
An offer lapses if the subject matter of the offer is destroyed before its acceptance by the offeree.
Example:
Q offers to sell his cow to R. the cow dies before the acceptance of offer by R. the offer terminates.
10- Prescribed manner:
If the offeror prescribes the manner of acceptance, the offer terminates if the offeree does not accept it according to the prescribed manner. If the offeror wants to reject the offer, he must inform the offeree with in a reasonable time. If offeror does not inform, he will be bound by such acceptance.
Example:
T offers to sell his car to U. T requests U to give acceptance by telephone. U sends acceptance by letter. The offer terminates.