PERFORMANCE OF

CONTRACT

Submitted by,
Naveen Agarwal (11302)
Ritu Agrawal (11303)

PERFORMANCE OF CONTRACT
The parties to 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 any other law.

The contract is said to be performed by:

1.
Actual Performance
2.
Attempted Performance / Tender of Performance
/ Offer of Performance

ATTEMPTED PERFORMANCE OR TENDER

Sometimes it happens that a party who is bound to

perform his promise under the contract is ready and
willing to perform but the other party to the contract
does not accept the performance or is not willing to
carry out his part of promise under the contract.
This is called attempted performance.

It has all features of performance and falls short of

actual performance only because of wrongful
refusal by other party.

ESSENTIALS OF VALID TENDER SEC. 38

1.

2.
3.

4.

5.

6.

It must be unconditional
It must be made at proper time and place
Tender must be made by person ready, able and
willing to perform
A person to whom the tender is made must be
given opportunity of inspection of goods or
articles
The tender must be whole and not of the part
The tender must be in proper form tender of
money in current coins

ESSENTIALS OF VALID TENDER SEC. 38

6.

7.

8.

The tender must be made to proper person

Tender for the delivery of goods must be for the
quantity and quality as stipulated in the contract
A tender made to one of the several joint
promisees has the same legal consequences as
a tender to all of them

EFFECT OF REFUSAL TO ACCEPT OFFER OF

PERFORMANCE (SEC. 38)
Where a promisor has made an offer of
performance to the promisee and the offer has not
been accepted :
1.
The promisor is not responsible for nonperformance nor does he thereby loses his
rights under the contract

EFFECT OF REFUSAL OF PARTY TO PERFORM

PROMISE WHOLLY

When a party to a contract refuses to perform, or

disables himself from performing, his promise in its
entirely, the promisee may put an end to the contract.
But if the promisee has signified, by words or conduct,
his assent in continuance of the contract, he cannot
repudiate it.
E.g. A, a singer enters into contract with B , the manager
of the theatre to perform on two nights in every week for
next two months. He has performed two times but on
one Monday he was entitled to perform but willfully
absents herself from the theatre. B is at liberty to put an
end to the contract

CONTRACTS WHICH NEED NOT BE

PERFORMED (SEC. 62 TO 67)
1.

2.

3.

4.

5.

When its performance becomes impossible

If the parties to a contract agree to substitute a
new contract for it or alter it.
The promisee may dispense with or remit
performance by the promisor in whole or in part
or may extend the time for the performance or
may accept any satisfaction in lieu of thereof. (
Sec.63)
When a voidable contract is rescinded, the other
party need not perform his promise. (Sec. 64)
When the failure of performance has been
caused by the promisees neglect or refusal, the
promisor will be executed. (Sec. 67)

BY WHOM MUST THE CONTRACTS BE

PERFORMED
1.
2.

3.
4.
5.

By the Promisor
By the Agent
By the representative
By Third Person ( Sec.41)
Joint promisors

If it appears from the nature of the case that it was the intention of
the parties to any contract that any promise contain in it should be
performed by the promisor himself, such promise must be performed
by the promisor.
E.g. A agrees to paint a picture for B. A must perform his promise
personally.

In other cases, the promisor or his representative may employ a

competent person to perform it.

WHO CAN DEMAND PERFORMANCE ?

Only the promisee or his agent can demand ..
It makes no difference whether the promise is for
the benefit of promisee or for the benefit of any
other person

e.g. A promises B to pay C a sum of 500. A does not

pay the amount to C but C can not take action
against him and only B can take action against him.

TIME & PLACE OF PERFORMANCE SEC. 46 50

It is for the parties to a contract to decide about the
time and place of contract for the performance of
contract.
1. Sec.46 Time for performance of promise, where
no application is to be made and no time is
specified
Where, by the contract, a promisor is to perform his
promise without application by the promisee, and
no time for performance is specified, the
engagement must be performed within a
reasonable time.
Explanation : The question what is a reasonable
time is, in each particular case, a question of fact.

TIME & PLACE OF PERFORMANCE SEC. 46 50 CONTD.

2. Sec. 47. Time and place for performance of
promise, where time is specified and no
application to be made
When a promise is to be performed on a certain
day, and the promisor has undertaken to perform it
without the application by the promisee, the
promisor may perform it at any time during the
usual hours of business on such day and at the
place at which the promise ought to be performed.

E.g. A promises to deliver goods at Bs warehouse

on first of January. A brings goods after warehouse
is closed.

TIME & PLACE OF PERFORMANCE SEC. 46 50 CONTD.

3. Sec. 48 Application for performance on certain
day to be at proper time and place
When a promise is to be performed on a certain
day, and the promisor has not undertaken to
perform it without application by the promisee,
it is the duty of the promisee to apply for the
performance at a proper place within the usual
hours of business.

Explanation : The question what is proper time and

place is, in each particular case, a question of fact.

TIME & PLACE OF PERFORMANCE SEC. 46 50 CONTD.

4. Sec.49 Place for the performance of promise,
where no application to be made and no place
fixed for performance
When a promise is to be performed without
application by the promisee, and not place is fixed
for the performance of it, 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 a place.

TIME & PLACE OF PERFORMANCE SEC. 46 50 CONTD.

5. Sec.50 Performance in manner or at time
prescribed or sanctioned by promisee
The performance of any promise may be made in
any manner, or at any time which the promisee
prescribes or sanctions.

TIME AS THE ESSENCE OF THE CONTRACT

1.

2.
3.

When time is of the essence of the contract

When time is not of the essence
Extension of time, performance within extended
time is proper performance

DEVOLUTION OF JOINT LIABILITIES

When two or more person have made a joint

promise, then, unless a contrary intention appears
by the contract, all such persons, during their joint
lives, and, after the death of any of them, his
representative jointly with the survivor or survivors,
and, after the death of the last survivor the
representatives of all jointly, must fulfill the promise.

ANY ONE OF JOINT PROMISORS MAY BE

COMPELLED TO PERFORM

When

two or more persons make a joint

promise, the promisee may, in the absence of
express agreements to the contrary, compel any
one or more of such joint promisors to perform
the whole promise.
Each promisor may compel contribution :
Each of two or more joint promisors may compel
every other joint promisor to contribute equally
with himself to the performance of the promise,
unless a contrary intention appears from the
contract.

ANY ONE OF JOINT PROMISORS MAY BE

COMPELLED TO PERFORM

Sharing of loss by default in contribution : If any

one of two or more joint promisors make default in
such contribution, the remaining joint promisors
must bear the loss arising from such default in
equal shares.

Explanation: Nothing in this section shall prevent a

surety from recovering, from his principal, payments
made by the surety on behalf of the principal, or
entitle the principal to recover anything from the
surety on account of payments made by the
principal.

EFFECT OF RELEASE OF ONE JOINT PROMISOR

Where

two or more persons have made a

joint promise, a release of one of such joint
promisors by the promisee does not
discharge the other joint promisor, neither
does it free the joint promisor so released
from responsibility to the other joint
promisor or joint promisors.

DEVOLUTION OF JOINT RIGHTS

When a person has made a promise to two or more

persons jointly, then unless contrary intention
appears from the contract, the right to claim
performance rests, as between him and them, with
them during their joint lives, and, after the death of
any one of them, with the representative of such
deceased person jointly with the survivor or
survivors, and, after the death of the last survivor,
with the representatives of all jointly.

PERFORMANCE OF RECIPROCAL
PERFORMANCES
Promises which form consideration or part of the
consideration for each other are called reciprocal
promises
1.
Simultaneous reciprocal promises ( Sec. 51)
Where two promises are to be performed
simultaneously, they are known as mutual and
concurrent.
When a contract consists of reciprocal promises
to be simultaneously performed, a promisor need
not perform his promise unless the promisee is
ready and willing to perform his reciprocal
promise.

PERFORMANCE OF RECIPROCAL
PERFORMANCES CONTD.
2.

Conditional Reciprocal promises- 3 rules

Sec. 52 Order of performance of reciprocal

promises
Where the order in which reciprocal promises are to
be performed is expressly fixed by the contract,
they shall be performed in that order, and where the
orders is not expressly fixed by the contract, they
shall be performed in that order which the nature of
transaction requires.
E.g. A is to build house and B is to pay money .
Then A will perform first.
a.

PERFORMANCE OF RECIPROCAL
PERFORMANCES CONTD.
b) Sec. 53 Liability of party preventing event on
which contract is to take effect
When a contract contains reciprocal promises and
one party to the contract prevents the other from
performing his promise, the contract becomes
voidable at the option of the party so prevented;
and he is entitled to compensation from the other
party for any loss which he may sustain as a
consequence of the non-performance of the
contract.

PERFORMANCE OF RECIPROCAL
PERFORMANCES CONTD.
c) Sec. 54 Effect of default as to the promise which
should be performed, in contract consisting of
reciprocal promises
When a contract consists of reciprocal promises, such
that one of them cannot be performed, or that its
performance cannot be claimed till the other has been
performed, and the promisor of the promise last
mentioned fails to perform it, such promisor cannot claim
the performance of the reciprocal promise, and must
make compensation to the other party to the contract for
any loss which such other party may sustain by the nonperformance of the contract.

PERFORMANCE OF RECIPROCAL
PERFORMANCES CONTD.
Reciprocal promises one legal and the other
illegal
Sec.57. Reciprocal promise to do things legal,
and also other things illegal
Where persons reciprocally promise, firstly to do
certain things which are legal, and, secondly under
specified circumstances, to do certain other things
which are illegal, the first set of promise is a
contract, but the second is a void agreement.
3.

PERFORMANCE OF RECIPROCAL
PERFORMANCES CONTD.
4.

Alternative promise one branch being illegal

Sec. 58 In the case of an alternative promise,
one branch of which is legal and other illegal, the
legal branch alone can be enforced.

APPROPRIATION OF PAYMENTS
When a debtor owes several distinct debts to a
creditor and makes a payment insufficient to satisfy
the indebtness, a question arises that to which debt
should the payment be appropriated.
1.
Appropriation by Debtor ( Sec. 59)
2.
Appropriation by Creditor ( Sec.60)
3.
Appropriation by Law ( Sec.61)

Principal and Interest

Sec. 59 Application of payment where debt to be

discharged is indicated
Where a debtor, owing several distinct debts to one
person, makes a payment to him, either with express
intimation, or under circumstances implying, that the
payment is to be applied to the discharge of some
particular debt, the payment if accepted, must be applied
accordingly.

Sec. 60. Application of payment where debt to

be discharged is not indicated
Where the debtor has omitted to intimate, and there
are no other circumstances indicating to which debt
the payment is to be applied, the creditor may apply
it at his discretion to any lawful debt actually due
and payable to him from the debtor, whether its
recovery is or is not barred by the law in force, for
the time being as to the limitations of suits.

Sec. 61 Application of payment where neither party

appropriates
Where neither party makes any appropriation, the
payment shall be applied in discharge of the debts in order
of time, whether they are or are not barred by the law in
force for the time being as to the limitation of suits.
If the debts are of equal standing, the payment shall be
applied in discharge of each proportionally.

ASSIGNMENT OF CONTRACTS
Assignment means transfer of contractual rights and
liabilities under the contract to a third party with or
without concurrence of the other party to the contract.
a.
b.

By an act of parties
By operation of law

1. ACT OF PARTIES
Assignment is said to take place by an act of the
parties when they themselves make the
assignment.
Rules:
1.
Contractual obligations involving personal skill or
ability can not be assigned.
2.
A promisor can not assign his liabilities or
obligations under a contract.
Limitations to the rule:
Promisor may employ a competent person
provided the contract does not contemplate
performance only by the promisor.

2. OPERATION OF LAW

Assignment by operation of law takes place by

intervention of law.

A) death
B) insolvency