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CMA Foundation · Fundamentals of Business Laws and Business Communication · Essential Elements of a Contract, Offer and Acceptance

Under the Indian Contract Act, 1872, the communication of a proposal is complete at which point?

A proposal is communicated when it comes to the knowledge of the person to whom it is made. Until the offeree learns of it, whether by receiving the letter or otherwise, the proposal is not complete, so neither writing nor posting it is enough.

  1. AWhen the proposer writes the proposal
  2. BWhen the proposal is posted by the proposer
  3. CWhen it comes to the knowledge of the person to whom it is madeCorrect
  4. DWhen the offeree decides to accept it

Explanation

Section 4 says the communication of a proposal is complete when it comes to the knowledge of the person to whom it is made. Writing or posting alone does not complete it, because the offeree may not yet know of it. Acceptance by the offeree comes after communication and is not a test of it.

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