Section 4 Contract Act: Communication when complete

Section 4 of Indian Contract Act: Communication when complete

Official Bare Act Text

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

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.

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 4

Section 4 of the Indian Contract Act, 1872 delineates the precise temporal and spatial points at which communications of proposals, acceptances, and revocations become legally complete as against each contracting party.

Core Legal Standard: Section 4 creates a bifurcated legal rule for the completion of acceptance.
Operational Mechanism: For revocation, the communication is complete against the person who makes it when put into transmission, and against the person to whom it is made only when it comes to their knowledge.

This statutory asymmetry grants the acceptor a narrow window to revoke their acceptance before it reaches the proposer's knowledge.

Key Landmark Precedents:

Bhagwandas Goverdhandas Kedia v. Girdharilal Parshottamdas & Co. (AIR 1966 SC 543): The Constitution Bench settled that Section 4 was designed for non-instantaneous postal transmissions. For instantaneous electronic communications (telephone, telex, email), the postal rule does not apply; the contract is complete only when and where acceptance is received by the proposer.
Entores Ltd v. Miles Far East Corp [1955] 2 QB 327: The Court of Appeal held that in instantaneous communications, the risk of transmission failure lies on the acceptor, and no contract is formed until acceptance is actually received by the offeror.

Legal Commentary:

Section 4 is central to territorial jurisdiction disputes in civil litigation under Section 20 of the CPC. While postal contracts are made where the acceptance is posted, contracts formed via telephone, email, or digital platforms are concluded where the acceptance is received and read by the offeror, dictating which civil court possesses territorial jurisdiction.

Section 4: Communication when complete

Section 4 of Indian Contract Act: Communication when complete

Legal Commentary & Landmark Judgments: Section 4