Important ways in which an offer may come to an end as stated in sec. 6 of the Indian contract act are as follows:
Lapse of an offer means end of an offer. An offer should be accepted before it lapses (i.e. comes to an end). An offer may come to an end in any of the following ways stated in Sec. 6 of the Indian Contract Act.
1. By communication of notice of revocation:
An offer may come to an end by communication of notice of revocation by the offeror. It may be noted that an offer can be revoked only before its acceptance is complete for the offeror.
In other words, an offeror can revoke his offer at any time before he becomes bound by it. Thus, the communication of revocation of offer should reach the offeree before the acceptance is communicated.
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A notice of revocation will take effect only when it is brought to the knowledge of the offeree. It may be noted that notice of revocation must come from offeror or his duly authorised agent.
2. By lapse of time:
Sometimes, the time is fixed for the acceptance of the offer, and it is not accepted within the fixed time. In such cases, the offer comes to an end automatically on the expiry of fixed time.
3. By failure to accept condition precedent:
Sometimes, the offer requires that some condition must be fulfilled before the acceptance of the offer. In such cases, the offer lapses, if it is accepted without fulfilling the condition.
4. By the death or insanity of the offeror:
Sometimes, the offeror dies or becomes insane. In such cases, the offer comes to an end if the fact of his death or insanity comes to the knowledge of the acceptor before he makes his acceptance.
ADVERTISEMENTS:
But if the offer is accepted in ignorance of the fact of death or insanity of the offeror, the acceptance is valid. This will result in a valid contract, and legal representatives of the deceased offeror shall be bound by the contract.
It will be interesting to know that there is no provision in the Indian Contract Act about the effect of the death of an offeree, if he dies before acceptance. But it is an established rule that the offer comes to an end by operation of law, because death automatically brings about the termination of the offer.
As an offer can be accepted only by an offeree and not by any other person, therefore it cannot be accepted by his executors also.
ADVERTISEMENTS:
In addition to the modes stated in Sec. 6, an offer is also revoked in the following cases.
5. By counter-offer by the offeree:
Sometimes, a counter-offer is made by the offeree. In such cases, the original offer automatically comes to an end, as the counter-offer amounts to rejections of the original offer.
6. By not accepting the offer, according to the prescribed or usual mode:
Sometimes, some manner of acceptance is prescribed in the offer. In such cases, the offeror can revoke the offer if it is not accepted according to the prescribed manner. It may be noted that within a reasonable time offeror should give notice to the offeree that the offer should be accepted in the prescribed manner, and not otherwise.
7. By rejection of offer by the offeree:
Sometimes, the offeree rejects the offer. In such cases, the offer comes to an end. Once the offeree rejects the offer, he cannot revive the offer by subsequently attempting to accept it.
The rejection of offer may be express or implied. Express rejection is that where the offeree rejects the offer by words, written or spoken. Implied rejection is that where offeree’s conduct shows that he is not accepting the offer e.g. where the offeree makes a counter-offer, or where he gives conditional acceptance.
8. By change in law:
Sometimes, there is a change in law which makes the offer illegal or incapable of performance. In such cases also, the offer comes to an end.