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Bare Act As Per The Government of India

Section 3 of Indian Contract Act

3. Communication, acceptance and revocation of proposals.— 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.

MCQs Based on Section 2 of the Indian Contract Act, 1872

Q1. What does Section 3 of the Indian Contract Act, 1872 primarily deal with?

A. Capacity to contract
B. Communication, acceptance and revocation of proposals
C. Lawful consideration
D. Free consent

Answer: B. Communication, acceptance and revocation of proposals
Explanation: Section 3 deals specifically with how proposals, acceptances, and revocations are communicated or understood in contract law.

Q2. According to Section 3, communication is considered complete when:

A. The proposer thinks it is communicated
B. The offeree hears about the offer from someone
C. It is made by any act or omission that intends to communicate or has the effect of communicating
D. It is written and signed

Answer: C. It is made by any act or omission that intends to communicate or has the effect of communicating
Explanation: Section 3 clearly states that communication includes acts or omissions that are meant to or actually result in communication.

Q3. Under Section 3, which of the following can be considered a valid mode of communication?

A. Spoken words
B. Written message
C. Conduct (e.g., gesture or action)
D. All of the above

Answer: D. All of the above
Explanation: Communication can be made by oral, written, or even conduct-based methods if it conveys the proposal, acceptance, or revocation effectively.

Q4. When does the revocation of a proposal become effective under Section 3?

A. After the proposal is accepted
B. Only if made in writing
C. When it is communicated before the acceptance is complete
D. Anytime before the contract is performed

Answer: C. When it is communicated before the acceptance is complete
Explanation: Revocation must be communicated to the other party before the proposal is accepted; otherwise, it will not be valid.

Q5. Which of the following is NOT true as per Section 3 of the Indian Contract Act?

A. Communication can be through silence if it conveys intention
B. Communication must be oral only
C. Conduct can also be a mode of communication
D. Revocation can be communicated by omission

Answer: B. Communication must be oral only
Explanation: Section 3 does not restrict communication to oral means; it allows any act or omission with the intent or effect of communication.

Q6. According to Section 3, communication of acceptance is valid when:

A. It is posted, even if the proposer has not received it
B. It is communicated through any means that shows intention or results in communication
C. It is silently agreed in the mind of the acceptor
D. Only when both parties meet in person

Answer: B. It is communicated through any means that shows intention or results in communication
Explanation: Section 3 focuses on the intention and effect of communication, not the physical method.

Q7. What is meant by “omission” in Section 3 of the Contract Act?

A. Not sending a letter of acceptance
B. Failure to respond to a proposal
C. Any act not done that still communicates the intention effectively
D. Ignoring the contract terms

Answer: C. Any act not done that still communicates the intention effectively
Explanation: Omission means not doing something (like not objecting), but if it results in clear communication, it may still be valid.

Q8. Which of the following examples best explains communication by conduct under Section 3?

A. A person signs a written agreement
B. A person nods to accept an offer
C. A person sends an email
D. A person reads a contract silently

Answer: B. A person nods to accept an offer
Explanation: A gesture like nodding is conduct that communicates acceptance effectively, as explained in Section 3.

Q9. As per Section 3, an offer is considered communicated when:

A. It is sent
B. It is signed by the proposer
C. It reaches the person to whom it is made
D. It is written on paper

Answer: C. It reaches the person to whom it is made
Explanation: The offer must reach the offeree; simply sending it is not enough.

Q10. In which of the following situations will revocation of acceptance be valid?

A. After the acceptance has been communicated
B. Before the proposer knows about the acceptance
C. After the proposal has been accepted and communicated
D. None of the above

Answer: B. Before the proposer knows about the acceptance
Explanation: Acceptance can be revoked before it reaches the proposer, as per communication rules under Section 3.

Section 3: Condition-Based Practice Questions

1. Condition: A makes a proposal to B by sending a letter on 1st January. B receives the letter on 3rd January.

Question: On which date is the communication of the proposal complete?

A. 1st January
B. 2nd January
C. 3rd January
D. 4th January

Answer: C. 3rd January
Explanation: Communication of a proposal is complete when it reaches the person to whom it is made.

2. Condition: B sends his acceptance by post on 4th January, which reaches A on 7th January.

Question: On which date is the communication of acceptance complete for the proposer (A)?

A. 4th January
B. 5th January
C. 6th January
D. 7th January

Answer: D. 7th January
Explanation: Communication of acceptance is complete against the proposer when it comes to his knowledge.

3. Condition: A wants to revoke his proposal and sends a revocation letter on 2nd January, which reaches B on 4th January. B has already posted his acceptance on 3rd January.

Question: Is the revocation valid?

A. Yes, because A sent it before acceptance.
B. No, because B posted acceptance before receiving revocation.
C. Yes, because intention to revoke was there.
D. None of the above

Answer: B. No, because B posted acceptance before receiving revocation.
Explanation: Revocation must be communicated before acceptance is posted.

4. Condition: A accepts a proposal by clicking “I Agree” on an online contract.

Question: Is this a valid communication under Section 3?

A. No, because it’s not verbal.
B. Yes, as it is an act that communicates acceptance.
C. No, because it’s not signed.
D. Yes, only if followed by an email.

Answer: B. Yes, as it is an act that communicates acceptance.
Explanation: Any act with intention or effect of communication is valid under Section 3.

Section 3: Problem-Based Practice Questions

1. Problem:

Ravi offers to sell his bike to Amit by sending a WhatsApp message. Amit reads the message but doesn’t reply. After two days, he comes to Ravi’s house and pays for the bike without saying anything. Ravi accepts the money.

Question: Is this a valid acceptance under Section 3?

Answer: Yes.
Explanation: Acceptance can be communicated by conduct, and here Amit’s action of paying and Ravi’s acceptance completes communication under Section 3.

2. Problem:

Nisha sends an email to Ritu offering to sell her painting. Before Ritu responds, Nisha changes her mind and sends a cancellation email, which reaches Ritu before Ritu sends her acceptance.

Question: Is the revocation of offer valid?

Answer: Yes.
Explanation: Revocation of proposal is valid if it is communicated before acceptance is made. Since it reached Ritu before she accepted, revocation is effective.

3. Problem:

Karan sends a letter of acceptance to Deepa’s offer. But before Deepa receives the acceptance letter, Karan changes his mind and sends a revocation of acceptance via email, which reaches Deepa before the acceptance letter.

Question: Is Karan’s revocation of acceptance valid?

Answer: Yes.
Explanation: Acceptance can be revoked before it reaches the proposer, as per Section 3 and related rules of communication.

4. Problem:

Arjun offered to sell his land to Bharat. Bharat didn’t respond in words but started constructing a boundary wall over that land. Arjun saw this and raised no objection.

Question: Does Bharat’s action amount to valid communication of acceptance?

Answer: Yes.
Explanation: Acceptance by conduct that shows clear intention to accept, and is known to the proposer, is valid under Section 3.

5. Problem:

Amit offers to sell his car to Beena for ₹2 lakhs. Beena receives the letter but doesn’t read it immediately. Meanwhile, Amit revokes the offer by phone. Beena reads the letter and accepts the offer after the revocation call.

Question: Is there a valid contract?

Answer: No.
Explanation: Offer was revoked before acceptance was made, and communication of revocation was complete when Beena received the call.

6. Problem:

Dev offers to sell his laptop to Ram via email. Ram accepts the offer through a letter sent by post. Before the letter reaches Dev, Ram tries to cancel his acceptance by sending a text message.

Question: Is the revocation of acceptance valid?

Answer: Yes, if the text message reaches before the acceptance letter.
Explanation: As per Section 3, revocation of acceptance is valid if it is communicated before the acceptance reaches the proposer.

Final Thoughts

Introduction

Section 3 of the Indian Contract Act, 1872 talks about how a contract begins – through communication. This section explains how proposals (offers), their acceptance, and revocation (cancellation) are to be communicated. It clearly says that communication can be done by any act or omission (not doing something), if that act or omission is done with the intention to communicate, or if it has the effect of communicating.

What is Communication?

Communication means transferring the intention of one party (such as offering a contract or accepting it) to the other party. It is important in forming a valid contract.

Communication of Proposal (Offer)

Example: Ram sends a letter to Shyam offering to sell his bike. The proposal is communicated when Shyam receives the letter.

Communication of Acceptance

Example: Shyam sends back a letter to Ram accepting the bike offer. The acceptance is communicated when Ram receives the letter.

Communication of Revocation

Important: Revocation must also be communicated to be valid.

Example: If Ram wants to cancel his offer to sell the bike, he must inform Shyam before Shyam sends his acceptance. The cancellation must reach Shyam before he accepts.

Key Point: Intention and Effect of Communication

Section 3 clearly says that communication must be:

So, even if someone doesn’t directly say something, if their actions make the other person understand, then communication is complete.

Example: If A waves his hand to call a taxi, and the taxi stops – his action has communicated the proposal (to hire the taxi) to the driver.

Legal Importance

Section 3 plays a very important role in the formation of contracts, because:

Conclusion

Section 3 of the Indian Contract Act, 1872 lays down the basic rule of communication in contracts. It tells us how proposals, acceptances, and revocations are communicated. It ensures that both parties are aware of what is happening, and no one is bound by a contract they didn’t know about. Communication can be by words or actions – but it must clearly show the intention or must effectively convey the message. This section is foundational for understanding how a contract is built and how parties can enter or cancel a contract properly.