Revocation: Overview, definition and example
What is revocation?
Revocation refers to the act of withdrawing or canceling a previously made offer, right, or decision. In the context of contracts, it typically refers to the cancellation of an offer before it has been accepted, meaning the offeror no longer wishes to be bound by the terms previously proposed. Revocation can also apply to certain rights or authorizations that can be canceled at any time, as long as the action is done in accordance with the agreement or law.
Why is revocation important?
Revocation is important because it provides flexibility in agreements, especially in situations where the offeror or party withdrawing the offer realizes that they no longer want to proceed with the terms. It can prevent one party from being locked into an arrangement they no longer find beneficial. Understanding when and how revocation is allowed is crucial to managing contracts effectively and protecting your business interests.
Understanding revocation through an example
Imagine a business offers a potential client a contract to supply products at a certain price, but before the client accepts the offer, the business decides to cancel it. This is revocation—the business has decided to withdraw the offer before it was accepted, and the client can no longer accept the terms.
Another example is when a company issues a job offer to a candidate, and before the candidate formally accepts, the company decides to withdraw the offer. This is also a revocation of the offer. If the job offer had already been accepted, however, revocation would not be possible.
An example of a revocation clause
Here’s how a revocation clause might look in a contract:
"The Offeror may revoke this offer at any time before the offeree’s acceptance by providing written notice of revocation to the offeree."
Conclusion
Revocation is the act of canceling a previously made offer or right, usually before it has been accepted or exercised. It plays an important role in managing contracts and offers flexibility in certain situations. By understanding the rules surrounding revocation, businesses can avoid legal complications and maintain control over their agreements.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.