Performance of contract.

 Sec.37 provides that ‘the parties to a contract

must either perform, or offer to perform,
their respective promises, unless such
performance is dispensed with or excused
under the provisions of this Act or of any
other law.’
 Thus a contract is said to be performed when
the parties to it makes 1.Actual
performance or 2. Attempted performance
( tender or offer)
 Performance of contract….
 Actual performance: A party to a contract is
said to have actually performed his promise
when he has fulfilled all his obligations
under the contract.
 When a party to a contract offers to perform
his obligations under the contract at proper
time and place but the other party does not
accept the performance, it is known as
attempted performance or a tender. A valid
tender is equivalent to actual performance.
 Essentials of a valid tender
of performance
 It must be unconditional
 It must be for the entire performance
 The person making the tender must be willing to perform
and in a position to perform.
 It must be made at proper time and place.
 It must be made to a proper person i.e. promisee or his
authorized agent.
 It may be made to any one of several joint promisees.
 The tender must provide a reasonable opportunity to the
other party.
 In case of tender of money, the debtor must make a valid
tender in the legal tender money.
Effect of refusal to tender of
performance
 Where a promisor has made an offer
of performance to the promisee, and
the offer has not been accepted, the
promisor is not responsible for non-
performance, nor does he thereby
lose his rights under the contract.
Sec.38
When the law excuses the non-
performance of contract.
 When the contract is discharged by
any mode ( other than performance )
 When promisee neglects to afford
reasonable facilities for performance
to the promisor. Sec.67
 Who should perform the
contract
 The promisor himself
 His legal representative

 His agent

 A third person, subject to its acceptance by

promisee.
Who can demand performance
 Promisee, or
 His legal representative
 Time and place of
performance
 Where no time is specified and no application
is to be made- (Sec. 46) the promise must be
performed within a reasonable time.
 Where time(day) is specified but no application
is to be made- (Sec. 47) the promisor may
perform it at any time during the usual
business hours on such day and the place at
which the promise ought to be performed.
 Time and place of performance
 Where time is specified and application is to be
made- (Sec. 48) it is the duty of the promisee to
apply for the performance at a proper place and
within the usual hours of business.
 Where no place is specified and no application is
to be made- (sec-49) it is the duty of the promisor
to apply to the promisee to appoint a reasonable
place for the performance of the promise, and to
perform it at such place.
 Where manner and time for performance is
prescribed by the promisee, then it should be so
performed.(Sec.50)
 Effect of failure to perform in
time
 If time is essence of contract it may be
avoided for its non performance within that
time.
 If time is not essence of contract the
contract does not become voidable at the
option of the promisee, however he has a
right to receive compensation for the loss
caused to him by the delayed performance.
 When time is considered
essence of contract
 Depends on following…
2. The terms of contract
3. The intention of the parties, which may be
gathered from- a) surrounding
circumstances, b) nature or the subject
matter of the contract, c) construction of
the contract.
4. The object the parties had in mind while
entering in to contract.
 Effect
 Failure by promisor to perform in a fixed time
when time is essence of contract makes the
contract or its unperformed part voidable at the
option of the promisee.
 Promisee may accept the performance without
any objection.
 Promisee may accept the performance, after
giving a notice to the promisor, for his claim for
compensation for damages, if any.
 Joint promises

 When more than one person constitute a

single party to a contract, the promise under
the contract is considered a joint promise.
 The right to demand performance lies with the
promisees jointly. Even a single promisee
should not be left out while demanding
performance. In case of death of any
promisee his legal heirs will take his position.
 Exception- surviving partner(s) in a
partnership firm.
 Performance of a joint
promise
 All promisors must jointly fulfill the promise.
 Any one of the joint promisors may be compelled
to perform.
 Joint promisors are liable to contribute equally.
(Sec.43)
 Joint promisors are liable to share losses
equally. (exception – principal debtor and surety)
 Release of one promisor from the liability does
not release the other joint promisors from the
obligation.
 Reciprocal promises
 When one party gives promise in consideration of
other party’s promise, both the promises are called
reciprocal promises. The forms of which may be
following..
 Mutual and concurrent promises- where parties have
to perform their promises simultaneously at the same
time.
 Conditional and dependant promises- where
performance of promise by one party depends on the
prior performance of the other party.
 Mutual and independent promises- where one party
has to perform his promise independently without
waiting for the performance of the other party.
 Appropriation of debts
 Where debtor expressly intimates that the
amount of payment should be applied towards
the discharge of a particular debt, the creditor
must do so. Appropriation is debtors right.
 Where the debtor does not intimate the creditor
may apply the payment, at his discretion to any
lawful debt actually due and payable to him by
the debtor.
 Where both the parties fail to appropriate the law
will appropriate in order of time.
Assignment of contract

 Assignment is transfer of contractual

rights and obligations by a party to a
contract to other person who is not a
party to contract.
 Rules - assignment

1. Contracts involving personal skills can not be

assigned.
2. An obligation or burden under a contract can
not be transferred to a third party unless the
other party gives consent to such assignment.
3. An actionable claim can be assigned if the
assignment is made in writing. It is also
advisable that the assignee gives notice of the
assignment to the debtor.
Assignment by operation of
law.
 Death- to official heirs
 Insolvency- to Official Receiver or
Assignee.