Section 4 of the Indian Contract Act, 1872: Communication When Complete
Section 4 of the Indian Contract Act, 1872 explains the point at which communication of a proposal, acceptance or revocation becomes legally complete. The rule is important because the relevant moment can differ for the person sending a communication and the person receiving it.
What Section 4 means
Chapter I of the Indian Contract Act, 1872 deals with communication, acceptance and revocation of proposals. Section 4 identifies when each communication is treated as complete. It should be read with Section 3, which deals with communication of proposals, acceptances and revocations, and Section 5, which deals with revocation of proposals and acceptances.
| Communication | When it is complete |
|---|---|
| Proposal | When the proposal comes to the knowledge of the person to whom it is made. |
| Acceptance against proposer | When the acceptance is put into a course of transmission to the proposer so as to be beyond the acceptor's power. |
| Acceptance against acceptor | When the acceptance comes to the knowledge of the proposer. |
| Revocation against sender | When the revocation is put into a course of transmission to the recipient so as to be beyond the sender's power. |
| Revocation against recipient | When the revocation comes to the recipient's knowledge. |
Text of Section 4 - Communication when complete
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.
Proposal: when communication is complete
A proposal does not become complete merely because the proposer has written or sent it. Under Section 4, communication of the proposal is complete when it comes to the knowledge of the person to whom it is made. This knowledge requirement determines when the offeree can act upon the proposal.
Acceptance: different points for proposer and acceptor
Section 4 uses two different points of completion for an acceptance. Against the proposer, communication is complete when the acceptance is placed in a course of transmission so that it is beyond the acceptor's power. Against the acceptor, communication is complete only when the acceptance reaches the proposer's knowledge. The statutory illustration uses a letter sent by post to demonstrate this distinction.
Revocation: when withdrawal becomes complete
A revocation also has two points of completion. Against the person making the revocation, it is complete when the revocation has entered a course of transmission and is beyond that person's power. Against the person receiving it, revocation is complete when it comes to that person's knowledge. The timing must also be considered with Section 5, which states when proposals and acceptances may be revoked.
Related provisions
Section 2 contains the Act's interpretation clause, including the concepts of proposal and acceptance. Section 3 explains how communication, acceptance and revocation may be made. Section 5 governs when a proposal or acceptance may be revoked, while Section 6 specifies how revocation is made.
This page is intended for legal information and study. Application of Section 4 depends on the facts, mode of communication and the other applicable provisions of law.