PERFORMANCE OF CONTRACT

#01. Definition: Performance of contract may be defined as the carrying out of the promises
(legal obligations) which the respective parties has made.
#02. Tender: The offer to perform the contract is called Tender.
#03. By Whom is a Contract to be Performed?
a) The Promisor: The promisor must himself perform the contract.
b) Representatives employ by Promisor: In case, if the promisor fails to perform contract,
then he may employ a representative to perform it.
c) Third Person: A contract may be performed by a third person if he promised but in this
case, the main promisor couldnt be blamed.
d) Death of the Promisor: A contract come to an end when the promisor dies. But his heirs
or legal representatives are bound to do his promises.
e) Joint Promises: A contract between two persons cannot be enforced by a third person if
the third person not employed to do this.
#04. Reciprocal Promises:
#05. Contracts which need not be performed
#06. Assignment of Contracts.
#07. The time and place of performance
#08. Rules regarding Appropriation of payments.

Reciprocal Promises
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 promises is a contract, but the second is a
void agreement. (Sec 57)
A and B agree that A shall sell B a house for 10,000 Taka but that, if B uses it as a
gambling house, he shall pay A 50,000 Taka for it.
The first set of reciprocal promises, namely, to sell the house and to pay 10,000
Taka
for
it,
is
a
contract.
The second set is for an unlawful object, namely, that B may use the house as a
gambling house, and is a void agreement.

Reciprocal promises are of the following types: -

1. Mutual and independent reciprocal promise:

When each party performs his promise independently and irrespective of the
fact whether the other party has performed, or is willing to perform his
promise or not, the promises are mutual and independent. Example: X
agrees Y to supply milk daily, while Y agrees to pay the price of milk every
month. Both these are mutual and independent promises.

2. Conditional and dependent reciprocal promises:

When the performance of a promise by one party depends upon the prior
permission of the other party, it will be a conditional and dependent promise.
Example:
X promises to construct Ys house, provided that Y supplies cement and
bricks. This will be a conditional and dependent promise. Here, X need not
perform the promise if Y fails to supply cement and bricks.

3. Mutual and concurrent or simultaneous reciprocal

promise:

This is the state when two contracts are to be performed simultaneously.

Example:
All cash sales are examples of simultaneous or concurrent promises, as
delivery of goods and payment of price take place simultaneously.
What is a contract?
A contract is a legally enforceable agreement between two or more parties
that creates an obligation to do or not do particular things. The term "party"
can mean an individual person, company, or corporation. No matter who the
parties are, contracts almost always contain the following essential
elements:

Contracts which need not be performed

Effect of novation, rescission and alteration of contract. - If the parties
to a contract agree to substitute a new contract for it, or to rescind or alter it,
the original contract need not be performed.
Promisee may dispense with or remit performance of promise: Every
promisee may dispense with or remit, wholly or in part, the performance of
the promise made to him, or may extend the time for such performance, 3 or
may accept instead of it any satisfaction which he thinks fit.
Consequences of rescission of voidable contract- When a person at
whose option a contract is voidable rescinds it, the other party thereto need
not perform any promise therein contained in which he is promisor. The party
rescinding avoidable contract shall, if he has received any benefit thereunder
from another party to such contract, restore such benefit, so far as may be,
to the person from whom it was received.
Obligation of person who has received advantage under void
agreement or contract that becomes void: When an agreement is
discovered to be void, or when a contract becomes void, any person who has
received any advantage under such agreement or contract is bound to
restore it, or to make compensation for it, to the person from whom he
received it.
Mode of communicating or revoking rescission of a voidable
contract: The rescission of a voidable contract may be communicated or
revoked in the same manner, and subject to the same rules, as apply to the
communication or revocation of a proposal.

Effect of neglect of promisee to afford promisor reasonable facilities

for performance: If any promisee neglects or refuses to afford the promisor
reasonable facilities for the performance of his promise, the promisor is
excused by such neglect or refusal as to any non-performance caused
thereby.

Elements of contracts
All valid contracts must have the following elements:

Terms: A set of clauses defining the exact set of promises agreed

to.

Mutual

agreement: There

must

be

an

express

or

implied

agreement. The essential requirement is that there be evidence that

the parties had each from an objective perspective engaged in
conduct manifesting their assent, and a contract will be formed
when the parties have met such a requirement. (Notice that the
objective manifestation requirement means that one need not
actually assent had been granted.) For a contract based on offer and
acceptance to be enforced, the terms must be capable of
determination in a way that it is clear that the parties' assent was
given to the same terms. The terms, like the manifestation of assent
itself, are determined objectively.

Consideration: There must be 'consideration' given by all the

parties, meaning that every party is conferring a benefit on the
other party or himself sustaining a recognizable detriment, which is
a cost to a party, whatever it may be. Consideration need not be
adequate, which meanscourts generally do not look to the value

parties place on things contracted for, thus agreeing to buy a car for
a penny may constitute a binding contract.[3] Consideration must be
legally sufficient, however. Legally sufficient consideration exists
when a promise is made, which induces the other party to incur a
detriment, which in turn reinforces the initial promise. This is called
mutual conventional inducement, a phrase coined by Oliver Wendell
Holmes Jr..

Competent, Adult (Sui Juris) Parties: Both parties must have the
"capacity" to understand the terms of the contract they are entering
into, and the consequences of the promises they make. For
example, animals, minorchildren, and mentally disabled individuals
do not have the capacity to form a contract, and any contracts with
them will be considered void or voidable. Although corporations are
technically legal fictions, they are considered corporate persons
under the law, and thus fit to engage in contracts. For adults, most
jurisdictions have statutes declaring that the capacity of parties to a
contract is presumed, so that one resisting enforcement of a
contract on grounds that a party lacked the capacity to be bound
bears the burden of persuasion on the issue of capacity.

Proper Subject Matter: The contract must have a lawful purpose.

A contract to commit murder in exchange for money will not be
enforced by the courts. It is void ab initio, meaning "from the
beginning."

Mutual Right to Remedy: Both parties must have an equal right

to remedy upon breach of the terms by the other party.

Mutual Obligation to Perform: Both parties must have some

obligation

to

fulfill

to

the

other.

This

can

be

distinct

fromconsideration, which may be an initial inducement into the

contract.

Intention

to

create

legal

relationship: There

is

strict

presumption for commercial agreements to be legally bound.

Domestic and social agreements are usually unenforceable.