Government of India
Bare Act As Per The Government of India

Section 4 of Indian Contract Act

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.

MCQs Based on Section 4 of the Indian Contract Act, 1872

Q1. When is the communication of a proposal complete under Section 4 of the Indian Contract Act?

A. When it is written by the proposer
B. When it is posted by the proposer
C. When it reaches the acceptor
D. When the proposer signs the letter

Correct Answer: C. When it reaches the acceptor
Explanation: A proposal is communicated only when the person to whom it is made receives and knows about it.

Q2. Communication of acceptance is complete against the proposer:

A. When the proposer opens the acceptance letter
B. When the acceptance letter is posted by the acceptor
C. When the proposer signs the contract
D. When the acceptance is written

Correct Answer: B. When the acceptance letter is posted by the acceptor
Explanation: As per Section 4, communication of acceptance is complete against the proposer once it is posted, even if the proposer hasn’t received it yet.

Q3. Communication of acceptance is complete against the acceptor:

A. When he writes the acceptance
B. When he posts the letter
C. When the proposer receives the letter
D. When the proposer signs the agreement

Correct Answer: C. When the proposer receives the letter
Explanation: For the acceptor, communication is complete only when the proposer comes to know about the acceptance.

Q4. Revocation of a proposal is complete against the person who makes it:

A. When it is sent
B. When it is received by the other party
C. When the sender thinks about cancelling it
D. When the proposer signs the revocation

Correct Answer: A. When it is sent
Explanation: Revocation is complete against the person making it when it is put into a course of transmission, beyond their control.

Q5. Revocation of an acceptance is complete against the acceptor when:

A. The revocation is written
B. The revocation is posted
C. The proposer receives the revocation
D. The revocation is destroyed

Correct Answer: B. The revocation is posted
Explanation: For the person revoking the acceptance (acceptor), communication is complete when they send it.

Q6. According to Section 4, communication of revocation is complete against the person to whom it is made:

A. When the telegram is posted
B. When it comes to their knowledge
C. When the letter is signed
D. When the message is composed

Correct Answer: B. When it comes to their knowledge
Explanation: Revocation becomes effective for the receiver only when they receive and understand it.

Q7. Which of the following statements is TRUE as per Section 4 of the Indian Contract Act?

A. Acceptance is valid only when both parties sign a written document
B. Revocation of acceptance is valid only before communication of acceptance is complete against the acceptor
C. Acceptance is complete against the proposer only after the proposer reads the acceptance
D. Proposal is complete when the proposer sends it

Correct Answer: B. Revocation of acceptance is valid only before communication of acceptance is complete against the acceptor
Explanation: Once acceptance is communicated (i.e., proposer receives it), the acceptor cannot revoke it.

Q8. In which of the following situations is the communication of revocation complete against both parties?

A. When revocation is sent and received
B. When revocation is drafted
C. When revocation is posted
D. When revocation is signed

Correct Answer: A. When revocation is sent and received
Explanation: For revocation to be complete against both parties – it must be sent (for sender) and received (for receiver).

Q9. A sends an offer to B by post. B receives the letter. When is the communication of the proposal complete?

A. When A posts the letter
B. When B signs a reply
C. When B receives the letter
D. When B accepts the offer

Correct Answer: C. When B receives the letter
Explanation: Proposal is communicated only when the offeree (B) knows about it.

Q10. B accepts A’s proposal by posting a letter. When is the communication of acceptance complete against A?

A. When B writes the letter
B. When A opens the letter
C. When the letter is posted by B
D. When A sends a confirmation

Correct Answer: C. When the letter is posted by B
Explanation: Against the proposer, acceptance is complete when it is out of the hands of the acceptor.

Section 4: Condition-Based Practice Questions

Q1. Assertion (A): The communication of acceptance is complete against the proposer when it is posted by the acceptor.

Because once the acceptance is out of the acceptor’s control, it cannot be revoked by the proposer.

A. Both A and R are true and R is the correct explanation of A
B. Both A and R are true but R is not the correct explanation of A
C. A is true but R is false
D. A is false and R is true

Correct Answer: C. A is true but R is false
Explanation: While the assertion is correct, the reason is incorrect. The proposer cannot revoke the proposal after the acceptance is posted, not the other way around.

Q2. True or False:

Once a revocation of acceptance is posted, it is considered complete against the acceptor, even if the proposer hasn’t received it yet.

Answer: True
Explanation: Communication of revocation is complete against the person who sends it when it is put into transmission (posted).

Q3. True or False:

Communication of a proposal is complete when the proposer sends the letter containing the offer.

Answer: False
Explanation: It is complete only when the offeree receives the proposal, not when it is sent.

Section 4: Problem-Based Practice Questions

Q4. A sends a letter to B on 1st October, offering to sell his bike for ₹40,000. B receives the letter on 4th October. B posts his letter of acceptance on 6th October, which reaches A on 9th October.

Q: On which date is the communication of acceptance complete against A and against B?

A. Against A – 6th October, Against B – 9th October
B. Against A – 4th October, Against B – 6th October
C. Against A – 9th October, Against B – 6th October
D. Against A – 6th October, Against B – 4th October

Correct Answer: A. Against A – 6th October, Against B – 9th October
Explanation:

Q5. A proposes to B to buy his land. Before B posts his acceptance, A sends a telegram revoking his proposal. The telegram reaches B after B has already posted his acceptance.

Q: Is A’s revocation of the proposal valid?

A. Yes, because he sent the telegram before acceptance
B. No, because the acceptance was posted before the revocation reached B
C. Yes, because B did not receive the revocation on the same day
D. No, because revocation must be in writing

Correct Answer: B. No, because the acceptance was posted before the revocation reached B
Explanation: Revocation must reach the other party before acceptance is communicated. Since B already posted the acceptance, the contract is formed.

Q6. B posts a letter of acceptance to A. Later that day, B sends a telegram revoking the acceptance. The telegram reaches A before the acceptance letter.

Q: Is the revocation valid?

A. No, because once posted, acceptance cannot be revoked
B. Yes, because revocation reached A before the acceptance
C. No, because revocation must be done only through registered post
D. Yes, because oral revocation is not allowed

Correct Answer: B. Yes, because revocation reached A before the acceptance
Explanation: According to Section 4, revocation is valid if it reaches the proposer before the acceptance does.

Q7. A sends an offer to B on 1st Jan. B receives it on 4th Jan. On 5th Jan, A sends a revocation by post, which reaches B on 6th Jan. B had already posted his acceptance on 5th Jan before receiving the revocation.

Q: Is the revocation by A valid?

A. Yes
B. No
C. Partially valid
D. Only if B agrees

Correct Answer: B. No
Explanation: B already posted the acceptance before receiving revocation. So, A’s revocation is not valid and a contract is formed.

Q8. A proposes to B to sell a car. B delays in replying. A revokes the proposal through email. Before the email is opened, B sends an acceptance by courier. The courier reaches A before B opens the email.

Q: Is the contract valid?

A. No, revocation is valid
B. Yes, because acceptance was sent before B knew of revocation
C. No, because email is an invalid mode of revocation
D. Yes, because courier is faster than email

Correct Answer: B. Yes, because acceptance was sent before B knew of revocation
Explanation: Revocation is valid only when the other party knows about it. Since B accepted before reading the email, contract is valid.

Final Thoughts

Introduction

The Indian Contract Act, 1872, says that for any agreement to become a valid contract, it is important that the offer (proposal), its acceptance, and even the cancellation (revocation) of offer or acceptance are properly communicated. Section 4 explains when this communication is considered complete – for both the person who sends it and the one who receives it.

1. Communication of Proposal

    When someone makes an offer to another person, that offer (proposal) is said to be “communicated” only when the other person actually knows about it.

    When is it complete?

    The communication of a proposal is complete when it comes to the knowledge of the person to whom it is made.

    Example: A writes a letter to B offering to sell his car for ₹2 lakhs. The communication is complete only when B receives and reads the letter.

    2. Communication of Acceptance

      Acceptance means the other person agrees to the offer. Section 4 says communication of acceptance is complete at different times for the proposer and acceptor.

      Example: B sends a letter accepting A’s offer. Communication of acceptance is complete against A (proposer) when B posts the letter. It is complete against B (acceptor) when A receives the letter.

      This timing is very important for deciding when the contract becomes binding and who can cancel at what point.

      3. Communication of Revocation

      Revocation means cancellation – either of the offer or of the acceptance. Like acceptance, revocation is also complete at different times:

      Example 1 (Revocation of Offer): A sends a telegram to B cancelling his offer.

      Example 2 (Revocation of Acceptance): B sends a telegram to A cancelling his acceptance.

      Important Note: If the acceptance is already complete against the acceptor (i.e., if proposer has already received it), then revocation is not valid. Timing matters a lot here.

      Conclusion

      Section 4 of the Indian Contract Act plays a key role in determining when the communication of proposal, acceptance, or revocation is considered legally effective. It helps both parties understand their rights and liabilities at different stages of forming a contract. Understanding the timing of these communications helps avoid confusion and ensures smooth contract formation.