THE INDIAN CONTRACT ACT, 1872 [25thApril, 1872]
Preamble.—Whereas it is expedient to define and amend certain parts of the law relating to contracts; It is herebyenacted as follows:—
PRELIMINARY 1.
Short title.— This Act may be called the Indian Contract Act, 1872.
Extent, Commencement. — It extends to the whole of India. (“except the State of Jammu and Kashmir” standsdeleted now); and it shall come into force on the first day of September, 1872.
Saving.— Nothing herein contained shall affect the provisions of any Statute, Act or Regulation not hereby expressly repealed, nor any usage or custom of trade, nor any incident of any contract, not inconsistent with the provisions of this Act. 2.
2. INTERPRETATION-CLAUSE.—
In this Act the following words and expressions are used in the following senses, unless a contrary intentionappears from the context:—
a. PROPOSAL
When one person Signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal;
b. PROMISE
When the person to whom the proposal is made signifies his assent there to, the proposal is said to be accepted.A proposal, when accepted, becomes a promise;
c. PROMISOR OR PROMISEE
The person making the proposal is called the "promisor", and the person accepting the proposal is called the "promisee";
d. CONSIDERATION
When, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise;
e. AGREEMENT
Every promise and every set of promises, forming the consideration for each other, is an agreement;
f. RECIPROCAL PROMISES
Promises which form the consideration or part of the consideration for each other, are called reciprocalpromises;
g. VOID AGREEMENT
An agreement not enforceable by law is said to be void;
h. CONTRACT
An agreement enforceable by law is a contract;
i. VOIDABLE CONTRACT
An agreement which is enforceable by law at the option of one or more of the parties thereto, but not at theoption of the other or others, is a voidable contract;
j.
A contract which ceases to be enforceable by law becomes void when it ceases to be enforceable.
CHAPTER -I
OF THE COMMUNICATION, ACCEPTANCEAND REVOCATION OF PROPOSALS
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.
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 come s 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 completeas against A when the telegram is dispatched. It is completeas against B when B receives it.B revokes his acceptance by telegram.B's revocation is completeas against B when the telegram is dispatched, andas against A when it reaches him.
5. Revocation of Proposals and acceptance. —
A proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards. An acceptance may be revoked at any time before the communication of the acceptance is complete as against the acceptor, but not afterwards.
ILLUSTRATIONS
A proposes, by a letter sent by post, to sell his house to B.B accepts the proposal by a letter sent by post.A may revoke his proposal at any time before or at the momentwhen B posts his letter of acceptance, but not afterwards.B may revoke his acceptance at any time before or at the momentwhen the letter communicating it reaches A, but not afterwards.
6. Revocation how made.—
A proposal is revoked—
1. by the communication of notice of revocation by the proposer to the other party;
2. by the lapse of the time prescribed in such proposal for its acceptance, or, if no time is so prescribed, by the lapse of a reasonable time, without communication of the acceptance;
3. by the failure of the acceptor to fulfil a condition precedent to acceptance; or
4. by the death or insanity of the proposer, if the fact of his death or insanity comes to the knowledge of the acceptor before acceptance.
7. Acceptance must be absolute. —
In order to convert a proposal into promise the acceptance must—
1. be absolute and unqualified; 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.
8. Acceptance by performing conditions, or receiving consideration. —
Performance of the conditions of a proposal, or the acceptance of any consideration for a reciprocal promise which may be offered with a proposal, is an acceptance of the proposal.
9. Promises, express and implied. —
In so far as the proposal or acceptance of any promise is made in words, the promise is said to be express. In so far as such proposal or acceptance is made otherwise than in words, the promise is said to be implied.
