Section 3 Contract Act: Communication, acceptance and revocation of proposals

Section 3 of Indian Contract Act: Communication, acceptance and revocation of proposals

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary

The communication of proposals, the acceptance of proposals, and the revocation of proposals and acceptances, respectively, are deemed to be made by any act or omission of the party proposing, accepting or revoking, by which he intends to communicate such proposal, acceptance or revocation, or which has the effect of communicating it.

Statutory Defined Terms in this Section: (Click any term for official legal definition)

Proposal Sec 2(a) Contract Sec 2(h)

Legal Commentary & Landmark Judgments: Section 3

Section 3 of the Indian Contract Act, 1872 governs the statutory mechanics of communication, prescribing that proposals, acceptances, and revocations must be communicated through an act or omission intending to communicate or having that effect.

Statutory Rights & Obligations: Section 3 enacts the foundational rule that uncommunicated internal mental resolve cannot generate contractual rights or liabilities.
Core Legal Standard: An offer, acceptance, or revocation must be expressed by some affirmative act or conduct that the law recognizes as intended to convey the party's intention to the opposite party.

This statutory threshold prevents secret intentions from imposing unbargained liabilities, anchoring contract formation in objective, verifiable external conduct.

Key Landmark Precedents:

Bhagwandas Goverdhandas Kedia v. Girdharilal Parshottamdas & Co. (AIR 1966 SC 543): The Supreme Court held that communication requires an objective external manifestation. In cases of instantaneous communication, the contract is completed only when the acceptance is heard and received by the offeror at their place of business.
Felthouse v. Bindley (1862) 11 CB (NS) 869: The Court of Common Pleas ruled that an offeror cannot unilaterally stipulate that silence will constitute acceptance. Communication of acceptance must be positively signified to the offeror.

Legal Commentary:

Section 3 underscores that an overt act or omission must reasonably convey the communication. In modern digital commerce, click-wrap and browse-wrap agreements satisfy Section 3 only where affirmative conduct (such as clicking 'I Agree' or submitting payment) objectively communicates assent to clear, accessible contractual terms.

Section 3: Communication, acceptance and revocation of proposals

Section 3 of Indian Contract Act: Communication, acceptance and revocation of proposals

Legal Commentary & Landmark Judgments: Section 3