Performance of contract.
Performance of contract.
Sec.37 provides that ‘the parties to a contractSec.37 provides that ‘the parties to a contract
must
must either performeither perform, or , or offer to performoffer to perform,,
their respective promises, unless such their respective promises, unless such
performance is dispensed with or excused performance is dispensed with or excused under the provisions of this Act or of any under the provisions of this Act or of any other law.’
other law.’
Thus a contract is said to Thus a contract is said to be performed whenbe performed when
the parties to it makes
the parties to it makes 1.Actual1.Actual
performance
performance or or 2. Attempted performance2. Attempted performance
( tender or offer)
Performance of contract….
Performance of contract….
Actual Actual performanceperformance:: A party to a contract isA party to a contract is
said to have actually performed his promise said to have actually performed his promise when he has fulfilled all his obligations
when he has fulfilled all his obligations under the contract.
under the contract.
When a party to a contract offers to performWhen a party to a contract offers to perform
his obligations under the contract at
his obligations under the contract at proper proper time and place but the other party does not time and place but the other party does not accept the performance, it is known as
accept the performance, it is known as
attempted performance or a tender. A valid attempted performance or a tender. A valid tender is equivalent to actual
Essentials of a valid tender
Essentials of a valid tender
of performance
of performance
It must be It must be unconditionalunconditional
It must be for the entire It must be for the entire performanceperformance
The person making the tender must be willing to performThe person making the tender must be willing to perform
and in a position to perform. and in a position to perform.
It must be made at proper time and place.It must be made at proper time and place.
It must be made to a proper person i.e. promisee or hisIt must be made to a proper person i.e. promisee or his
authorized agent. authorized agent.
It may be made to any one of several joint promisees.It may be made to any one of several joint promisees.
The tender must provide a reasonable opportunity to theThe tender must provide a reasonable opportunity to the
other party. other party.
In case of tender of money, the debtor must make a validIn case of tender of money, the debtor must make a valid
tender in the legal tender money. tender in the legal tender money.
Effect of refusal to tender of
Effect of refusal to tender of
performance
performance
Where a promisor has made an offer Where a promisor has made an offer
of performance to the promisee, and of performance to the promisee, and the offer has not been accepted, the the offer has not been accepted, the promisor is
promisor is not responsible for non-not responsible for
non- performance
performance, nor does he thereby, nor does he thereby lose his rights under the contract. lose his rights under the contract. Sec.38
When the law excuses the
When the law excuses the non-
non-performance of contract.
performance of contract.
When the contract is discharged byWhen the contract is discharged by
any mode ( other than performance ) any mode ( other than performance )
When promisee neglects to affordWhen promisee neglects to afford
reasonable facilities for
reasonable facilities for performanceperformance to the promisor. Sec.67
Who should perform the
Who should perform the
contract
contract
The promisor himself The promisor himself
His legal representativeHis legal representative
His agentHis agent
A third person, subject to its acceptance byA third person, subject to its acceptance by
promisee. promisee.
Who can demand p
Who can demand performance
erformance
Promisee, or Promisee, or
Time and place of
Time and place of
performance
performance
Where no time is specified and no applicationWhere no time is specified and no application
is to be made- (Sec. 46) the promise must
is to be made- (Sec. 46) the promise must bebe performed within a reasonable time.
performed within a reasonable time.
Where time(day) is specified but no Where time(day) is specified but no applicationapplication
is to be made- (Sec. 47) the promisor may is to be made- (Sec. 47) the promisor may perform it at any time during the usual
perform it at any time during the usual
business hours on such day and the place at business hours on such day and the place at which the promise ought to
Time and place of performance
Time and place of performance
Where time is specified and application is to beWhere time is specified and application is to be
made- (Sec. 48) it is the duty of
made- (Sec. 48) it is the duty of the promisee tothe promisee to apply for the performance at a
apply for the performance at a proper place andproper place and within the usual hours of
within the usual hours of business.business.
Where no place is specified and no application isWhere no place is specified and no application is
to be made- (sec-49) it is the duty of
to be made- (sec-49) it is the duty of the promisor the promisor to apply to the promisee to appoint a reasonable to apply to the promisee to appoint a reasonable place for the performance of the promise, and to place for the performance of the promise, and to perform it at such place.
perform it at such place.
Where manner and time for performance isWhere manner and time for performance is
prescribed by the promisee, then it should be so prescribed by the promisee, then it should be so performed.(Sec.50)
Effect of failure to perform in
Effect of failure to perform in
time
time
If time is essence of contract it may beIf time is essence of contract it may be
avoided for its non
avoided for its non performance within thatperformance within that time.
time.
If time is not essence of contract theIf time is not essence of contract the
contract does not become voidable at the contract does not become voidable at the option of the promisee, however he has a option of the promisee, however he has a right to receive compensation for the loss right to receive compensation for the loss caused to him by
When time is considered
When time is considered
essence of contract
essence of contract
Depends on following…Depends on following…
2.
2. The terms of contractThe terms of contract 3.
3. The intention of the parties, which may beThe intention of the parties, which may be
gathered from- a)
gathered from- a) surroundingsurrounding
circumstances, b) nature or the subject circumstances, b) nature or the subject matter of the contract, c) construction of matter of the contract, c) construction of the contract.
the contract.
4.
4. The object the parties had in mind whileThe object the parties had in mind while
entering in to contract. entering in to contract.
Effect
Effect
Failure by promisor to perform in a fixed timeFailure by promisor to perform in a fixed time
when time is essence of contract makes the when time is essence of contract makes the
contract or its unperformed part voidable at the contract or its unperformed part voidable at the option of the promisee.
option of the promisee.
Promisee may accept the Promisee may accept the performance withoutperformance without
any objection. any objection.
Promisee may accept the Promisee may accept the performance, after performance, after
giving a notice to the promisor, for his claim
giving a notice to the promisor, for his claim for for compensation for damages, if any.
Joint promises
Joint promises
When more than one person constitute aWhen more than one person constitute a
single party to a contract, the promise under single party to a contract, the promise under the contract is considered a
the contract is considered a joint promise.joint promise.
The right to demand performance lies with theThe right to demand performance lies with the
promisees jointly. Even a si
promisees jointly. Even a single promiseengle promisee should not be left
should not be left out while demandingout while demanding performance. In case of death of any performance. In case of death of any
promisee his legal heirs will take his position. promisee his legal heirs will take his position.
Exception- surviving partner(s) in aException- surviving partner(s) in a
partnership firm. partnership firm.
Performance of a joint
Performance of a joint
promise
promise
All promisors must jointly fulfill the promise.All promisors must jointly fulfill the promise.
Any one of the joint promisors may be compelledAny one of the joint promisors may be compelled
to perform. to perform.
Joint promisors are liable to Joint promisors are liable to contribute equally.contribute equally.
(Sec.43) (Sec.43)
Joint promisors are liable to share lossesJoint promisors are liable to share losses
equally. (exception – principal debtor and surety) equally. (exception – principal debtor and surety)
Release of one promisor from the liability doesRelease of one promisor from the liability does
not release the other joint promisors from
not release the other joint promisors from thethe obligation.
Reciprocal promises
Reciprocal promises
When one party gives promise in consideration of When one party gives promise in consideration of
other party’s promise, both the promises are called other party’s promise, both the promises are called reciprocal promises. The forms of which may be reciprocal promises. The forms of which may be following..
following..
Mutual and concurrent promises- where parties haveMutual and concurrent promises- where parties have
to perform their promises
to perform their promises simultaneously at the samesimultaneously at the same time.
time.
Conditional and dependant promises- whereConditional and dependant promises- where
performance of promise by one party depends on the performance of promise by one party depends on the prior performance of the other party.
prior performance of the other party.
Mutual and independent promises- where one partyMutual and independent promises- where one party
has to perform his
has to perform his promise independently withoutpromise independently without waiting for the performance of the o
Appropriation of debts
Appropriation of debts
Where debtor expressly intimates that theWhere debtor expressly intimates that the
amount of payment should be
amount of payment should be applied towardsapplied towards the discharge of a
the discharge of a particular debt, the creditor particular debt, the creditor must do so.
must do so. Appropriation is debtors right.Appropriation is debtors right.
Where the debtor does not intimate Where the debtor does not intimate the creditor the creditor
may
may apply apply the the payment, payment, at at his dhis discretion iscretion to to anyany lawful debt actually due and payable to him by lawful debt actually due and payable to him by the debtor.
the debtor.
Where both the parties fail to Where both the parties fail to appropriate the lawappropriate the law
will appropriate in order of time. will appropriate in order of time.
Assignment of contract
Assignment of contract
Assignment is transfer of contractualAssignment is transfer of contractual
rights and obligations by a party to a rights and obligations by a party to a contract to other person who is not a contract to other person who is not a party to contract.
Rules - assignment
Rules - assignment
1.
1. Contracts involving personal skills can not beContracts involving personal skills can not be
assigned. assigned.
2.
2. An obligation or burden under a An obligation or burden under a contract cancontract can
not be transferred to a third party unless the not be transferred to a third party unless the other party gives consent to
other party gives consent to such assignment.such assignment.
3.
3. An actionable claim can be assigned if theAn actionable claim can be assigned if the
assignment is made in writing. It is
assignment is made in writing. It is alsoalso
advisable that the assignee gives notice of the advisable that the assignee gives notice of the assignment to the debtor.
Assignment by operation of
Assignment by operation of
law.
law.
Death- to official heirsDeath- to official heirs
Insolvency- to Official Receiver or Insolvency- to Official Receiver or
Assignee. Assignee.