Section 66 Indian Contract Act 1872: Communication or Revocation of Rescission of Voidable Contract

Section 66 - Mode of communicating or revoking rescission of voidable contract

This provision means that when a party entitled to avoid a voidable contract elects to rescind it, the communication of that election is governed by the same statutory framework that applies to communication and revocation of a proposal. The same approach applies where a rescission is capable of being revoked.

Meaning of Section 66

A voidable contract is defined in Section 2(i) of the Act as an agreement enforceable by law at the option of one or more parties, but not at the option of the other or others. Rescission, in this context, is the exercise of the entitled party's option to avoid or set aside the contractual obligation.

Section 66 does not itself create the grounds on which a contract becomes voidable. Instead, it regulates the manner in which the decision to rescind is communicated, by importing the rules applicable to proposals and their revocation.

Related provisions of the Indian Contract Act

Section 3 - Communication, acceptance and revocation of proposals

Section 3 deals with how communication of proposals, acceptance of proposals and revocation of proposals is made through an act or omission intended to communicate, or which has the effect of communicating, the relevant proposal, acceptance or revocation.

Section 4 - When communication is complete

Section 4 specifies when communication of a proposal, acceptance and revocation becomes complete as against the persons concerned. These timing rules are relevant because Section 66 expressly adopts the rules applicable to communication or revocation of a proposal.

Section 5 - Revocation of proposals and acceptances

Section 5 states the stages up to which a proposal or an acceptance may be revoked. Section 66 should therefore be read with the Act's communication and revocation framework where the facts require it.

Section 64 - Consequences of rescission of voidable contract

Section 64 addresses the consequences when a person at whose option a contract is voidable rescinds it, including restoration of benefits received under the contract where applicable.

Practical application

For a rescission to operate effectively, the entitled party should communicate the election to rescind in a manner that clearly conveys that decision to the other party. Whether and when the communication is complete depends on the applicable statutory rules and the facts, including the method and timing of communication.