Government of India
Bare Act As Per The Government of India

Section 5 of Indian Contract Act

5. Revocation of proposals and acceptances.— A proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards. An acceptance may be revoked at any time before the communication of the acceptance is complete as against the acceptor, but not afterwards.

Illustration

A proposes, by a letter sent by post, to sell his house to B.
B accepts the proposal by a letter sent by post.
A may revoke his proposal at any time before or at the moment when B posts his letter of acceptance, but not afterwards.
B may revoke his acceptance at any time before or at the moment when the letter communicating it reaches A, but not afterwards.

STATE AMENDMENT

Uttar Pradesh
Amendment of section 5 of Act (9 of 1872).—In section 5 of Indian contract Act, 1872, hereinafter in this Chapter referred to as the principal Act, at the end of the first paragraph, the following explanation shall inserted, namely:–

“Explanation— Where an invitation to a proposal contains a condition that any proposal made in response to such invitation shall be kept open for a specified time and a proposal is thereupon made accepting such condition, such proposal may not be revoked within such time.”
[Vide Uttar Pradesh Act, 57 of 1976, s. 2]

MCQs Based on Section 5 of the Indian Contract Act, 1872

Q1. Under Section 5 of the Indian Contract Act, 1872, a proposal can be revoked:

A. At any time before the contract is signed by both parties
B. At any time before the communication of acceptance is complete as against the proposer
C. At any time after the communication of acceptance
D. Only after acceptance is received by the acceptor

Correct Answer:B

Explanation: As per Section 5, a proposer can revoke the offer before the acceptance is communicated against him (i.e., before the acceptor posts the letter of acceptance).

Q2. An acceptance can be revoked:

A. Anytime before the contract is formed
B. After the proposer reads the letter of acceptance
C. Before the acceptance is complete as against the acceptor
D. Anytime after posting the letter of acceptance

Correct Answer:C

Explanation: The acceptor can revoke the acceptance before it is communicated against him (i.e., before the proposer receives the acceptance).

Q3. In case of postal communication, when is the communication of acceptance complete against the proposer?

A. When the letter is written by the acceptor
B. When the letter is posted by the acceptor
C. When the proposer receives the letter
D. When the proposer reads the letter

Correct Answer:B

Explanation: Communication is complete against the proposer when the letter of acceptance is posted by the acceptor.

Q4. In the illustration under Section 5, A offers to sell his house to B by post. B posts his letter of acceptance. When can A revoke his proposal?

A. After B posts the letter
B. Anytime after sending the offer
C. Before or at the moment B posts the letter of acceptance
D. Anytime before B receives the letter

Correct Answer:C

Explanation: Once B posts the acceptance, communication is complete against A. So A can revoke the offer only before or at the moment B posts the acceptance letter.

Q5. In the same illustration, when can B revoke his acceptance?

A. After A receives the acceptance
B. Before the acceptance reaches A
C. After posting the letter
D. After A accepts the offer

Correct Answer:B

Explanation: B can revoke acceptance before the letter reaches A (i.e., before communication is complete against the acceptor).

Q6. According to the Uttar Pradesh amendment to Section 5, a proposal made in response to an invitation containing a condition to keep it open for a specific time:

A. Can be revoked at any time
B. Cannot be revoked during the specified time
C. Can be revoked only after acceptance
D. Can be revoked without notice

Correct Answer:B

Explanation: The U.P. amendment adds an explanation that if the proposer agrees to keep the proposal open for a specified time (as per invitation), he cannot revoke it during that time.

Q7. What is the main objective of the Uttar Pradesh amendment to Section 5?

A. To allow early revocation
B. To make acceptance optional
C. To prevent revocation during the agreed time period
D. To change postal rules for contracts

Correct Answer:C

Explanation: The amendment is intended to protect parties who rely on the offer being kept open for a certain time, and to prevent unfair revocation.

Q8. Which of the following is TRUE about revocation under Section 5?

A. Acceptance cannot be revoked once posted
B. Proposal can be revoked after the acceptance reaches the proposer
C. Acceptance can be revoked before it reaches the proposer
D. Proposal can only be revoked with mutual consent

Correct Answer:C

Explanation: Revocation of acceptance is allowed before the communication is complete against the acceptor, i.e., before it reaches the proposer.

Q9. What does the term “communication is complete as against the proposer” mean?

A. When proposer reads the letter
B. When acceptor writes the letter
C. When acceptor posts the letter of acceptance
D. When contract is signed

Correct Answer:C

Explanation: As per the Indian Contract Act, communication is complete against the proposer when the acceptance letter is posted, not necessarily when it is received or read.

Q10. Under the Indian Contract Act, which section deals with the revocation of proposals and acceptances?

A. Section 3
B. Section 4
C. Section 5
D. Section 6

Correct Answer:C

Explanation: Section 5 of the Indian Contract Act, 1872 specifically deals with revocation of proposals and acceptances.

Section 5: Condition-Based Practice Questions

Q1. Condition-Based

Condition: A proposes to sell his car to B by sending a letter on 1st October. B receives it on 4th October and posts the letter of acceptance on 5th October. On the morning of 5th October, before B posts his acceptance, A sends a telegram revoking his offer.

Question: Is A’s revocation of offer valid under Section 5?

Answer: Yes, A’s revocation is valid because it was made before B posted the letter of acceptance. As per Section 5, a proposal can be revoked before the communication of acceptance is complete against the proposer, which happens when the acceptor posts the letter.

Q2. Condition-Based

Condition: X makes an offer to Y via email on 2nd November. Y accepts the offer through a courier letter on 3rd November. The courier reaches X on 6th November. Y sends another email on 5th November revoking his acceptance.

Question: Is Y’s revocation of acceptance valid?

Answer: Yes, the revocation is valid because Y’s revocation was communicated before the acceptance reached X. As per Section 5, an acceptance may be revoked at any time before the communication is complete as against the acceptor.

Q3. Condition-Based

Condition: A company invites tenders for supply of goods and clearly states in the invitation that offers must remain valid for 30 days. B submits a tender agreeing to the condition but tries to withdraw it after 10 days.

Question: Can B revoke his tender before 30 days under U.P. Amendment?

Answer: No, under the Uttar Pradesh amendment, if a proposal is made accepting the condition to remain open for a specified time, revocation is not allowed within that time period.

Section 5: Problem-Based Practice Questions

Q4. Problem-Based

Facts: Ram offers to sell his plot to Shyam for ₹10 lakhs. He sends this offer by post on 1st August. Shyam receives it on 3rd August and posts his acceptance on 4th August. On 5th August, Ram sends a letter of revocation.

Issue: Is Ram’s revocation valid?

Answer: No, Ram’s revocation is not valid. The communication of acceptance is complete against the proposer (Ram) once Shyam posts the acceptance on 4th August. Since the revocation was made after the acceptance was posted, it is invalid.

Q5. Problem-Based

Facts: A proposes to sell his bike to B. B sends a letter of acceptance but also sends a WhatsApp message the next day saying he has changed his mind and revokes his acceptance. The letter reaches A after the message.

Issue: Is B’s revocation of acceptance valid?

Answer: Yes, B’s revocation is valid because the revocation reached A before the acceptance did. Under Section 5, an acceptance may be revoked before it is communicated to the proposer, i.e., before the proposer receives it.

Q6. Problem-Based

Facts: The Government of Uttar Pradesh invites tenders stating the offer must be kept open for 45 days. M submits a bid agreeing to this condition but tries to withdraw it after 20 days.

Issue: Is M allowed to revoke his tender?

Answer: No, due to the U.P. state amendment to Section 5, a proposer cannot revoke a proposal made in response to such an invitation before the expiry of the specified time, if he agreed to that condition.

Q7. Problem-Based

Facts: X makes an offer by email to Y to sell 100 bags of rice. Y accepts by replying to the email. X reads the acceptance after 2 hours. Y tries to revoke his acceptance before X reads it.

Issue: Is the revocation valid?

Answer: No, the revocation is not valid. In case of instant communication (like email), the acceptance is complete when it enters the knowledge of the proposer (X). Once Y sent the email and it was received by X’s system, revocation was no longer allowed.

Final Thoughts

Introduction

The Indian Contract Act, 1872, governs the formation and enforcement of contracts in India. One important step in contract formation is “offer and acceptance”. Section 5 deals with the revocation (cancellation) of proposals and acceptances—explaining when a party can legally take back their offer or acceptance.

Explanation in Simple Words

Revocation of Proposal (Offer):

Revocation of Acceptance:

Illustration (Example from Act)

A proposes to B through a letter sent by post to sell his house. B accepts this offer, also through a letter.

Important Legal Principle: “Communication Completion”

This timing is important because it decides who can revoke and when.

Uttar Pradesh State Amendment

U.P. Act 57 of 1976, Section 2 – An explanation was added at the end of Section 5 in Uttar Pradesh.

Explanation Added: If a proposal is made in response to an invitation to proposal (like an advertisement) and the invitation clearly states that the proposal must be kept open for a certain period, then:

Purpose of the Amendment:

Conclusion

Section 5 of the Indian Contract Act defines the legal boundaries of revoking an offer or acceptance. It ensures fairness in communication and avoids confusion during contract formation. The Uttar Pradesh amendment further strengthens this by placing limits on revocation in special cases where the proposal is expected to remain open for a fixed time. This section is crucial for understanding how and when a contract becomes legally binding, and when it is too late to back out.