Section 3 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 3 tells you how a proposal, an acceptance or a revocation is "deemed to be made". The test is a single idea: any act or omission by which the person intends to communicate it, or which has the effect of communicating it. The section is short, but it governs every later rule on when a contract is formed or withdrawn.
The communication of proposals, the acceptance of proposals, and the revocation of proposals and acceptances are deemed to be made by any act or omission of the party proposing, accepting or revoking by which he intends to communicate it, or which has the effect of communicating it. The section does not say when communication is complete; that is section 4. The text carries no illustrations under section 3.
The text in parts
The section reads: "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."
| Part | What it says |
|---|---|
| What is communicated | A proposal, an acceptance, or a revocation of either |
| By whom | The party proposing, accepting or revoking, respectively |
| By what means | "any act or omission" |
| Test | The party intends to communicate it, or the act or omission has the effect of communicating it |
If you are building a process for making and accepting proposals in your business, such as a quotation workflow or an onboarding form, our agreement drafting service can help you set it out so that the communication steps are clear.
Three things that can be communicated
Section 3 names three communications:
- A proposal. Defined in section 2(a).
- An acceptance of a proposal. Section 2(b).
- A revocation of a proposal or of an acceptance. The Act deals with revocation in sections 5 and 6.
The word "respectively" in the section ties each communication to its own maker: the person proposing makes the proposal, the person accepting makes the acceptance, and the person revoking makes the revocation.
"Any act or omission"
The Act does not limit communication to words. "Any act or omission" is wide. A letter, an email, a spoken word, a nod, a payment, shipping goods or conduct can each be an act. An omission can also communicate, for instance staying silent where silence has been agreed to signify assent. The text does not say when an omission amounts to communication; it says only that it can, if the party intends it to communicate or if it has that effect.
Two alternative tests: intention or effect
The phrase "by which he intends to communicate ... or which has the effect of communicating it" gives two routes:
- Intention. The party does the act or omission meaning to communicate.
- Effect. The act or omission in fact communicates, even if the party did not specifically mean it as a communication.
Either is enough, because the section says "or". The second route is important: a party may be treated as having communicated where the act has that effect. The text goes no further, and we do not claim more than that.
How this links with sections 4, 7 and 9
Section 3 deals with what counts as communication. It does not deal with when it is complete. That is section 4: the communication of a proposal is complete when it comes to the knowledge of the person to whom it is made, and acceptance and revocation have their own rules. See our article on section 4.
Section 7 says the acceptance must be expressed in some usual and reasonable manner unless the proposal prescribes the manner. Section 9 says that a promise is express in so far as the proposal or acceptance is made in words, and implied in so far as it is made otherwise than in words. Together these show that the Act accepts both spoken or written words and conduct. See our article on sections 7 to 9.
No statutory illustrations
Section 3 has no illustrations in the text we read. The Act's illustrations that help with communication appear under section 4 and section 5, and we restate them in the articles on those sections. The example below is our own.
Example (our own, not from the Act). Sunita runs a catering business. She sends Dev a message: "I can cater your wedding reception for the rate in the attached quote." That is an act by which she intends to communicate a proposal. Dev does not reply, but he transfers the advance amount mentioned in the quote to Sunita's account. The transfer is an act which has the effect of communicating his acceptance (the section's second test), even if he did not write "I accept". Later, Dev changes his mind and sends Sunita a notice withdrawing his acceptance; that notice is the communication of a revocation, again by an act. Whether his withdrawal succeeds in time is a matter of sections 4 and 5.
What can the parties change?
Section 3 does not say it is subject to a contrary agreement. But the Act lets a proposer prescribe the manner of acceptance (section 7(2)), and a proposal may fix how acceptance is to be communicated. The parties also decide, by their own conduct and their own words, which acts they intend as communications. What the parties cannot do is change how the Act itself deems communication, apart from what a particular section permits.
Practical points
- Choose a clear channel. State in your quotation how it is to be accepted (reply email, signed copy, portal click).
- Beware of conduct. Starting work, paying an advance or shipping goods can have the effect of communication even without a written reply.
- Do not rely on silence. The section speaks of omission, but the text does not say silence is acceptance. If you want silence to carry meaning, agree it in writing.
- Keep a log. Dated emails, messages and call notes make it easier to show which act communicated what, and when.
Need help with how your contracts are formed?
If your quotations, proposals or acceptances are sent through email, forms or marketplaces and you want the formation steps to be clear, our agreement drafting team can review the process and the wording with you. A short written description of how deals are usually agreed is a good starting point.
Key takeaways
- Proposals, acceptances and revocations are deemed made by any act or omission of the relevant party.
- The test is intention to communicate, or the effect of communicating.
- Section 3 is about what counts as communication; section 4 deals with when it is complete.
- The text has no illustrations under section 3.
Read next
- Section 4: when communication of proposal and acceptance is complete
- Sections 5 and 6: revocation of proposals and acceptances
- Offer and acceptance: sections 3 to 9
Disclaimer: Based on the text of the Indian Contract Act, 1872 as consulted on 1 October 2026. Many questions under this Act turn on case law and on the wording of the particular contract, which this article does not cover. It is general information, not legal advice; check the official text and take advice before acting.