Revocation

Definition

Revocation is the formal cancellation or withdrawal of an authority, offer, or instrument that was previously granted or effective. This concept is critical in various fields of law and business, as it alters the legal status of an offer, an authority, or a legal document.

Detailed Definition

Recall of Authority Conferred: Revocation can occur when an authority that was previously delegated or conferred upon a party is withdrawn. This change means the party no longer holds the power or permission granted to them.
Cancellation of an Instrument: An instrument, in legal terms, refers to a formal written document. Revocation in this context means the invalidation or cancellation of such a document. For example, the cancellation of a power of attorney or a will.
Cancellation of an Offer: When an offeror rescinds or withdraws an offer, it terminates the offer’s effectiveness. Consequently, the offeree loses the power to accept the offer. Effective revocation must occur before acceptance by the offeree to be legally valid.

Examples

Authority Revocation: A principal revokes the authority of an agent to act on their behalf by formally withdrawing the power of attorney.
Instrument Revocation: A person revokes a will by creating a new one that explicitly states the old will is no longer valid.
Offer Revocation: A seller offers to sell goods to a buyer but then revokes the offer before the buyer accepts. The revocation can be through direct communication or by performing an inconsistent act that indicates the offer is no longer valid.

Frequently Asked Questions

What are the methods of revoking an offer?

An offer can be revoked by direct communication to the offeree or through a third party, provided the offeree receives reliable information that the offeror no longer intends to offer. Additionally, the offeror can act in ways that are inconsistent with the offer being open, indirectly communicating the revocation.

Can an offer be revoked at any time?

Not always. Offers cannot be revoked if they include a term that specifies they will remain open for a certain period (an option contract) or when the offeree has already commenced performance in a unilateral contract.

What constitutes the revocation of an authority?

Revocation of an authority typically requires clear communication from the principal to the agent or the public, if necessary, stating that the agent’s authority is no longer valid.

How does revocation affect acceptance in contract law?

If an offer is revoked before the offeree accepts it, the offer ceases to exist, and the offeree’s power to accept is terminated. Any attempted acceptance after revocation is ineffective.

Is revocation applicable to public offers?

Yes, public offers can also be revoked if the revocation is made in the same manner as the offer. For example, if an offer is advertised publicly, the revocation should also be made publicly through similar channels.

Authority: The legal power or right granted to a person to make decisions or act on behalf of another.
Instrument: A formal legal document.
Offer: A proposal by one party to another indicating a willingness to enter into a contract.
Acceptance: The consent to an offer, forming a contract.
Option Contract: A contract where the offeror is bound to hold an offer open for a specified period in exchange for consideration.

Online References

Suggested Books for Further Studies

“Contract Law: Text, Cases, and Materials” by Ewan McKendrick
“Business Law: Text and Cases” by Kenneth W. Clarkson, Roger Miller, & Frank Cross
“Principles of Contract Law” by Steven J. Burton

Fundamentals of Revocation: Business Law Basics Quiz

### What is a common reason for revocation of an authority? - [ ] The completion of the task assigned - [x] Withdrawal by the person who conferred the authority - [ ] Acceptance by the offeree - [ ] Expiration of a set term > **Explanation:** An authority can be revoked by the person who originally conferred it, indicating that the authority is no longer valid. ### Can an instrument, once revoked, be re-established? - [ ] No - [x] Yes, but typically requires a new instrument to be created - [ ] Yes, by verbal confirmations - [ ] Not within a three-month period > **Explanation:** Once an instrument is revoked, it typically requires creating a new instrument to re-establish its validity. ### When must the revocation of an offer occur to be effective? - [x] Before the offeree accepts the offer - [ ] After the offeree accepts the offer - [ ] Simultaneously with acceptance - [ ] Within 24 hours of offer acceptance > **Explanation:** To be effective, the revocation of an offer must occur before the offeree accepts the offer. Once acceptance happens, a contract is formed. ### What is required for a revocation of authority? - [ ] It must be made verbally - [ ] It generally must be in writing to be enforceable - [ ] It should involve a third-party mediator - [x] Clear communication from the principal to the agent > **Explanation:** Revocation of authority generally requires clear communication from the principal to the agent indicating that the authority is withdrawn. ### Does the revocation of an offer need to be made in the same manner as the offer for public offers? - [x] Yes - [ ] No, it can be a personal communication - [ ] Only in commercial contracts - [ ] Preferably not, due to legal complications > **Explanation:** For public offers, the revocation should be made in the same manner as the offer to ensure it reaches the same audience, maintaining fairness and clarity. ### In contract law, what effect does revocation have? - [ ] It secures the offer - [x] It terminates the offeree's power to accept the offer - [ ] It establishes a new offer - [ ] It confirms intent to enter into a contract > **Explanation:** Once an offer is revoked, it ceases to exist, and the offeree no longer has the power to accept the offer, thereby terminating any potential contract formation. ### What defines an option contract related to revocation? - [ ] The offeror can revoke at any time - [ ] The offeree can accept any offer within a different timeframe - [x] The offeror is bound to keep the offer open for a specified period in exchange for consideration - [ ] There are no specific rules except mutual agreement > **Explanation:** In an option contract, the offeror is bound to keep the offer open for a specified period in exchange for consideration, making it non-revocable during that period. ### Can an offeree rely on an offer that has been revoked? - [ ] Yes, it holds legal binding - [ ] Only if the offeror provides written consent - [x] No, a revoked offer cannot be accepted - [ ] In exceptional cases only > **Explanation:** An offeree cannot rely on or accept an offer that has been revoked as it is no longer valid. ### Who typically has the right to revoke an authority or offer? - [ ] The offeree - [ ] The public - [x] The person who conferred the authority or made the offer - [ ] Legal authorities alone > **Explanation:** The right to revoke typically lies with the person who originally conferred the authority or made the offer. ### What is not a valid way of revoking a public offer? - [ ] Direct communication - [ ] Public announcement - [ ] Advertisements - [x] Personal, verbal communication with select individuals > **Explanation:** Revoking a public offer through personal, verbal communication with select individuals is not valid. The revocation must be made public in the same manner as the offer to ensure it reaches the intended audience.

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