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Section 4 -The Indian Contract Act, 1872

The Indian Contract Act, 1872

 

 

4. Communication when complete 

 

 

The communication of a proposal is complete when it comes to the knowledge of the person to whom it is made.

 

The communication of an acceptance is complete,—

 

       as against the proposer, when it is put in a course of transmission to him so as to be out of the power of the acceptor;

       as against the acceptor, when it comes to the knowledge of the proposer.

 

The communication of a revocation is complete,—

 

       as against the person who makes it, when it is put into a course of transmission to the person to whom it is made, so as to be out of the power of the person who makes it;

      as against the person to whom it is made, when it comes to his knowledge.

 

Illustrations

 

(a) A proposes, by letter, to sell a house to B at a certain price.

 

The communication of the proposal is complete when B receives the letter.

 

(b) B accepts A’s proposal by a letter sent by post.

 

The communication of the acceptance is complete,

 

as against A when the letter is posted;

 

as against B, when the letter is received by A.

 

(c) A revokes his proposal by telegram.

 

The revocation is complete as against A when the telegram is despatched.

 

It is complete as against B when B receives it.

 

B revokes his acceptance by telegram. B’s revocation is complete as against B when the telegram is despatched, and as against A when it reaches him.

 

COMMENTS

 

Communication of proposal and acceptance

 

The advertisement of the Corporation for tenders was an ‘invitation to make an offer’. The tenders when submitted to the Corporation were ‘offers’ or ‘proposals’ in terms of section 4 of the Act and the ‘communication’ of ‘proposal’ or ‘offers’ was complete when received by the Corporation. In terms of section 4 of the Act, the ‘acceptance’ was not complete as it was never made, and never put into transmission. The revocation within the meaning of section 4 was complete as it was received and within the knowledge of the Corporation. The offers on tenders were revoked before it was accepted. The contract never saw the light of the day; Shyam Biri Works Pvt. Ltd. v. U.P. Forest Corporation, AIR 1990 All 205.

 

Where an offer is made by a method of instantaneous communication like telex, the contract is only complete when the acceptance is received by the offerer, and the contract is made at the place where the acceptance is received; Entores Ltd. v. Miles Far East Corporation, (1955) 2 All ER 493: (1955) 2 QB 327: (1955) 3 WLR 48.

 

Contract by correspondence: Antecedents and subsequent negotiations

The communication of acceptance of the highest bid is necessary for completed contract; Haridwar Singh v. Begum Sumbrui, AIR 1972 SC 1942.

 

Dispensing with notice of acceptance

 

A notif
ication of acceptance is required for the benefit of the person who makes the offer, the person who makes the offer may dispense with notice to himself if he thinks it desirable to do so: there can be no doubt that where a person in an offer made by him to another person expressly or impliedly, intimates a particular mode of acceptance as sufficient to make the bargain binding, it is only necessary for the other person to whom such offer is made to follow the indicated mode of acceptance; and if the person making the offer expressly or impliedly intimates in his offer that it will be sufficient to act on the proposal without communicating acceptance of it to himself, performance of the condition is a sufficient acceptance without notification; Carlill v. Carbolic Smoke Ball Co., (1893) 1 QBD 256.

 

 

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The Indian Contract Act, 1872

 

 

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