Fundamentals of Business Laws and Business Communication · Essential Elements of a Contract, Offer and Acceptance

Communication and Revocation of Offer and Acceptance

Updated 10 October 2026 · Fact-checked

Under the Indian Contract Act, 1872, communication of an offer is complete when it comes to the knowledge of the person it is made to. Acceptance is complete against the proposer when posted, and against the acceptor when it reaches the proposer. An offer can be revoked until the acceptance is posted; an acceptance, until it reaches the proposer.

Understand Communication and Revocation of Offer and Acceptance

A contract starts with an offer and an acceptance. But neither has legal effect until it is communicated. So the exam asks one thing again and again: at what moment is communication complete, and until when can the person take it back?

Communication of an offer is complete when it comes to the knowledge of the person to whom it is made. If Ravi posts a letter offering to sell his scooter to Meena, the offer is not complete until Meena receives and reads or learns of it. Before that she cannot accept it.

Communication of acceptance has two moments. Against the proposer it is complete when the acceptance is put into a course of transmission (for example, posted) so that it is out of the acceptor's power to withdraw it. Against the acceptor it is complete when it comes to the knowledge of the proposer. This is the postal rule. It applies when acceptance is by post, and the proposer is taken to have chosen that mode.

Revocation means taking back. A proposer may revoke an offer at any time before the acceptance is complete as against the proposer. An acceptor may revoke acceptance at any time before the acceptance is complete as against the acceptor. Revocation of an offer is itself communicated: it takes effect against the person receiving it only when it comes to their knowledge.

An offer can also lapse (end by itself) in these ways: the stated time expires, or a reasonable time passes if none is stated; the acceptor fails to fulfil a condition precedent to acceptance; the acceptor refuses or makes a counter-offer; the proposer dies or becomes of unsound mind, if that fact comes to the acceptor's knowledge before he accepts. An offer also ends if it is revoked.

Key formulas to remember

Communication of a proposal: Complete when it comes to the knowledge of the person to whom it is made; Section 4. Knowledge, not posting, is the test for an offer.
Communication of acceptance: Against proposer: when put in course of transmission. Against acceptor: when it comes to the proposer's knowledge; Section 4. This is the postal rule.
Communication of revocation: Against the person making it: when put in course of transmission. Against the person it is made to: when it comes to their knowledge; Section 4. A revocation by post does not bind the other party until it reaches them.
Time limit for revoking an offer: Revocable at any time before acceptance is complete as against the proposer; Section 5. After the acceptance is posted, the proposer cannot revoke.
Time limit for revoking acceptance: Revocable at any time before acceptance is complete as against the acceptor, but not afterwards; Section 5. Acceptor can overtake the posted acceptance by a faster message that reaches first or at the same time.
Modes by which an offer lapses: Notice of revocation | Lapse of the time fixed, or of a reasonable time if none is fixed | Failure of the acceptor to fulfil a condition precedent to acceptance | Death or insanity of the proposer (if it comes to the acceptor's knowledge before acceptance); Section 6 lists these four modes. Know all four for list-type MCQs. Rejection or a counter-offer by the offeree also ends the offer, but that rule comes from general law, not from s.6.

How to solve Communication and Revocation of Offer and Acceptance questions

Most questions give a timeline of letters, telegrams or calls. Fix the dates and apply the test for each step.

1Identify what is being asked: is the issue communication, revocation, or lapse of an offer or acceptance?
2Write the timeline in order: offer made, offer received, acceptance sent, acceptance received, revocation sent, revocation received.
3Mark when the offer is complete: when the offeree learns of it.
4Mark when the acceptance is complete against the proposer: when it is posted. Against the acceptor: when it reaches the proposer.
5Check whether the revocation came before the relevant moment. An offer can be revoked only before acceptance is posted. A revocation takes effect against the receiver only when it reaches them.
6Check for lapse: time limit passed, condition not met, counter-offer or rejection, death or insanity of the proposer known to the acceptor.
7State the result: contract formed or not formed, with the reason in one line.

Quickest way: Two-moment check

When to use it: For any MCQ with a sequence of letters or messages and a question on whether a contract exists.

Find the moment the acceptance was posted. If the revocation of the offer reached the offeree before that moment, the offer is gone and no contract forms.
If the revocation reaches the offeree only after the acceptance was posted, the revocation is too late. A contract exists.
For revoking an acceptance, it must reach the proposer before or at the same time as the acceptance.
Look for a time limit, a counter-offer or the proposer's death. Any of these ends the offer straight away (death only if the acceptor knows of it before accepting).
Eliminate options that say revocation is effective from the date it is posted.

Common mistakes in Communication and Revocation of Offer and Acceptance

Saying a revocation of an offer is effective when it is posted.
Students mix it up with the postal rule for acceptance.
Fix: Revocation binds the person it is sent to only when it reaches their knowledge. The postal rule helps acceptance, not revocation.
Treating acceptance as complete for both parties when posted.
The postal rule is remembered as one sentence.
Fix: Posting completes it against the proposer only. Against the acceptor it is complete when the proposer receives it.
Forgetting that a counter-offer ends the original offer.
Students think the offeree can still accept later.
Fix: A counter-offer is a rejection plus a new offer. The original offer lapses.
Thinking the death of the proposer always ends the offer.
The rule is learned without its condition.
Fix: Death ends the offer only if the acceptor learns of it before accepting. The condition is part of the rule.
Applying the postal rule to instant modes such as telephone.
Any acceptance is assumed to follow the postal rule.
Fix: For instantaneous communication, acceptance is generally complete when the proposer receives it. Use the postal rule when acceptance is sent by post or telegram.
Believing silence can be taken as acceptance.
Students read it into 'no reply means yes'.
Fix: A proposer cannot impose acceptance by saying silence will mean consent. Acceptance must be communicated by words or conduct.

Worked examples

Example 1

On 1 June, A posts a letter offering to sell his car to B for ₹2,00,000. B receives it on 3 June and posts a letter of acceptance on 4 June. A sends a telegram revoking the offer, and B receives it on 5 June. Is there a contract?

Show the solution

The offer was complete on 3 June when B received it.
B's acceptance was posted on 4 June. Against A, acceptance is complete from that moment.
A can revoke only before acceptance is complete against him, that is, before B posted the letter.
A revocation is effective against B only when it reaches B. The telegram reached B on 5 June, after B posted his acceptance on 4 June.
So the revocation is too late.

Answer: Yes. A valid contract was formed when B posted the acceptance on 4 June.

Example 2

Which of these does NOT terminate an offer? (a) The offeree makes a counter-offer (b) The time fixed for acceptance expires (c) The proposer revokes it before acceptance is posted (d) The offeree posts an acceptance within the time allowed

Show the solution

Option (a): a counter-offer rejects the original offer, so it ends.
Option (b): lapse of the stipulated time ends the offer.
Option (c): revocation before acceptance is complete ends the offer, once communicated.
Option (d): a proper acceptance does not end the offer. It turns the offer into a promise and forms a contract.

Answer: (d). Acceptance within time does not terminate the offer; it creates a contract.

Exam tips

Draw a quick timeline on the question paper and mark each posting and receipt date.
Memorise the three communication tests: offer on knowledge, acceptance on posting (for the proposer), revocation on knowledge.
Learn the full list of ways an offer ends. Section 6 style list questions are common.
Read the words carefully: 'posted', 'received' and 'sent' decide the answer.
With no negative marking, attempt every question. Eliminate options that say revocation takes effect on posting.

Practice questions from Essential Elements of a Contract, Offer and Acceptance

Communication and Revocation of Offer and Acceptance in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

CMA IntermediateOffer, Acceptance and Revocation of Proposals

Communication and Revocation of Offer and Acceptance: frequently asked questions

What is the postal rule of acceptance in India?

Under the Indian Contract Act, acceptance is complete against the proposer when it is posted, so the proposer can no longer revoke the offer. Against the acceptor it is complete when it reaches the proposer. So the acceptor can still stop it by a faster message that arrives first.

When does revocation of an offer take effect?

It takes effect against the person who receives it only when it comes to their knowledge. The offer can be revoked only before the acceptance is posted. If the offeree has already posted the acceptance, revocation is too late.

How does an offer lapse?

An offer lapses when the time for acceptance expires, or a reasonable time passes if no time is given. It also lapses if the acceptor fails to fulfil a condition precedent, if the offeree rejects it or makes a counter-offer, or if the proposer dies or becomes of unsound mind and the acceptor learns of it before accepting.

Can an acceptance be revoked?

Yes, but only before the acceptance is complete against the acceptor, which is before it reaches the proposer. The acceptor must send the revocation so that it reaches the proposer before or at the same time as the acceptance.