Updated: Aug 27, 2019
Under Section 3 of the Indian Contract Act,1872, communication of proposals, the acceptance of proposals, and the revocation of proposals and acceptance, respectively, are deemed to be made by any act or omission of the party proposing, accepting or revoking, by which he intends to communicated such proposal, acceptance or revocation, or which has the effect of communicating it.
What Is Proposal? - [Section 2(a)]
When one person signifies to another his readiness to do or to restrain oneself from doing or enjoying anything, with a view to obtaining the express approval of that other to such act or abstinence.
Communication of proposals, acceptance and revocation - [Section 4]
The communication of a proposal is complete when it becomes to the knowledge of the person to whom it is made.
The communication of an acceptance is complete -as against the proposer (the one who made a proposal), when it is put in a course of transmission to him so at to be out of the power of the acceptor(the one to whom the proposal is made); 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.
How Revocations are made? - [Section 6]
A proposal is revoked –
(1) by the communication of notice of revocation by the proposer to the other party;
(2) by the passage of time prescribed in such proposal for its acceptance, or, if no time is so advise and authorize, by the passage of a reasonable time, without communication of the acceptance;
(3) by the failure of the acceptor to fulfill a condition precedent to acceptance; or
(4) by the death or insanity of the proposer, if the fact of the death or insanity comes to the knowledge of the acceptor before acceptance.
What Is Promise? - [Section 2(b)]
When a person to whom the proposal is made, declares his expression of approval thereto, the proposal is said to be accepted. A proposal, when a accepted, becomes a promise
Acceptance - [Section 7]
In order to convert a proposal into a promise the acceptance must be diminished in any way and unqualified.
It must be be expressed in some usual and reasonable manner, unless the proposal prescribes the manner in which it is to be accepted.
If the proposal prescribes a manner in which it is to be accepted; and the acceptance is not made in such manner, the proposer may, within a reasonable time after the acceptance is communicated to him, insist that his proposal shall be accepted in the prescribed manner, and not otherwise; but; if he fails to do so, he accepts the acceptance.