PERFORMANCE OF CONTRACT
A contract being an agreement enforceable by law, creates a legal obligation, which subsists until discharged. Performance of the promise or promises remaining to be performed is the principal and most usual mode of discharge.
who must perform his obligation;
what should be the mode of performance; and
what shall be the consequences of non performance.
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 law.
Performance of one’s part is primary obligation under the contract. Unless, the partyistreated as having been absolved under the provisions of any law or by the conduct of the other party, the performance is neither excused nor dispensed with.
By Whom a Contract may be Performed
The promise under a contract can be performed by any one of the following:
(i) Promisor himself
Invariably the promise has to be performed by the promisor himself. Particularly, where the contract isentered into for performance of personal skills, or diligence or personal confidence, it becomes absolutely necessary that the promisor performs it himself.
(ii) Agent
Where personal consideration is not the foundation of a contract, the promisor can employ a competent person to perform it.
(iii) Representatives
Generally upon the death of promisor, the legal representatives of the deceased are bound by the promise unless it is a promise for performance involving personal skill or ability of the promisor. However the liability of the legal representative is limited to the value of property inherited by him from the promisor.
(iv) Third Person
At times, a total stranger to a contract may be directed to perform the promise. In such case, ofa promisee accepts performance from a third party he cannot afterwards enforce it against the promisor.
(v) Joint promisors
Where two or more persons jointly promise, the promise must be performed jointly unless a contrary intention appears from the contract.
The above rules may appear tedious. But can be understood with the help of following examples –
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A promises to pay B a sum of money. A may perform this promise, either by personally paying the money to B or by causing it to be paid to B by another. And if A dies before the time appointed for payment, his representatives must perform the promise, or employ some proper person to do so, to the extent they have inherited from A.
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A promises B to pay Rs. 1000/- on delivery of certain item. A may perform this promise either himself or causing someone else to pay the money to B. If A dies before the time appointed for payment, his representative must pay the money or employ some other person to pay the money. If B dies before the time appointed for the delivery of goods, B’s representative shall be bound to deliver the goods to A and A is bound to pay Rs. 1000/- to B’s representative. (Note – After death of a party, even the representatives may with mutual consent of the other alter or vary the terms of contract or discharge its performance altogether).
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A promises to paint a picture for B for a certain price. A must perform this promise personally. He cannot employ some other painter to paint the picture on his behalf. If A dies before painting the picture, the contract cannot be enforced either by A’s representative or by B.
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A delivered certain goods to B who promised to pay Rs. 5000/-. Later on B expresses his inability to clear the dues. C, who is known to B, pays Rs. 2000/- to A on behalf of B, although without disclosing it to B. Now A can sue B only for the balance and not for the whole amount.
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A, B and C jointly promise to pay D 3,000 rupees. D may compel either A or B or C to pay him 3,000 rupees.
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A, B and C jointly promise to pay D the sum of 3,000 rupees. C is compelled to pay the whole. A is insolvent, but his assets are sufficient to pay one-half of his debts. C is entitled to receive 500 rupees from A’s estate and 1,250 rupees from B.
Effects of Refusal to Accept Offer of Performance
In a contract, parties must offer performance of their part. This offer of performance is known as ‘tender’. For a valid tender, following conditions are a must –
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Offer of performance is unconditional
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It is made at a proper time and place
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Person to whom it is made has a reasonable opportunity to ascertain that the person by whom it is made is able and willing to do, what he is bound to under the contract
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If the offer is to deliver any thing, then the promisee must have a reasonable opportunity to ascertain that the thing offered is the thing that the promisor is bound to deliver.
Where a promisee refuses to accept a valid offer or tender of performance by the promisor then the promisor is not responsible for non performance. And he does not forfeit his rights under the contract.
Effect of a Refusal of a Party to Perform Promise
When a party to a contract has refused to perform, or disabled himself from performing, his promise in its entirety, the promisee may put an end to the contract, unless he has signified, by words or conduct, his acquiescence in its continuance. Thus, the aggrieved party has following two options –
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Terminate the contract or
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Indicate by words or conduct that he is interested in its continuance.
If the promisee puts an end to the contract, he is bound to return the benefit received under the contract and is entitled to receive compensation for the breach.
Performance of Reciprocal Promise
At times, a contract may consist of Reciprocal promises, that is, promises from both the sides to perform some act in present or future.
For example, A promises to sell 100 bags of wheat to B and B promises to pay the price on delivery. This contract consists of two reciprocal promises, that are consideration for one another.
जानिए चेक बाउंस केस की पूरी प्रक्रिया
Order of Performance of reciprocal promises
The rules pertaining to order of performance of reciprocal promises are as follows –
(i) Simultaneously performance
When a contract consists of reciprocal promises to be simultaneously performed, no promisor need perform his promise unless the promisee is ready and willing to perform his reciprocal promise.
For example, A and B contract that A shall deliver goods to B to be paid for by B on delivery. A need not deliver the goods, unless B is ready and willing to pay for the goods on delivery. B need not pay for the goods, unless A is ready and willing to deliver them on payment.
Similarly, A and B contract that A shall deliver goods to B at a price to be paid by instalments, the first instalment to be paid on delivery. A need not deliver, unless B is ready and willing to pay the first instalment on delivery. B need, not pay the first instalment, unless A is ready and willing to deliver the goods on payment of the first instalment.
(ii) Where the order is expressly fixed
Where the order of performance is expressly fixed, the promise must be performed in that order only.
For example, Where A promises to build a house for B and B promises to pay after construction. A must perform his promise before, A can compel B to make payment. A’s performance of the promise is a condition precedent to B performing his part.
(iii) Implication by Nature of the transaction
Where a contract does not spell out order of performance, reciprocal promises shall be performed in the order which the nature of the transaction requires.
For example, A and B contract that A shall make over his stock-in-trade to B at a fixed price, and B promises to give security for the payment of the money. A’s promise need not be performed until the security is given. The reason is that the from the nature of transaction, it can be gathered that security must precede delivery.
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