PERFORMANCE OF CONTRACT

A contract is entered into with the object that it will be performed. Performance means that the
parties have done/ fulfilled their respective obligations arising out of the contract.

Section 37 states that, “The parties to a contract must either perform, or offer to perform, their
respective promises unless such performance is dispensed with or excused”.

Thus performance may be:

a. Actual performance
b. Attempted performance

Actual performance- when the parties have done what they had undertaken to do or have fulfilled
their obligations under the contract, they are said to have actually performed the contract.

Attempted performance or offer to perform- When one parties to the contract offers to perform the
contract but the other party does not accept it, there is an attempted performance.
Where a promisor has made an offer of performance to the promise, and the offer has not
been accepted, the promisor is not responsible for non-performance nor does he thereby lose his
right under the contract. An attempted performance also discharges a contract.

RULES REGARDING AS TO THE PERFORMANCE OF CONTRACT

I TENDER
An attempted performance is called a ‘tender’.

Essentials of a valid tender are as follows:

1. It must be unconditional and accordance with the terms of the contract.

2. It must be made at a fixed or proper time as agreed upon. If no such time and place is
agreed, then it should be made during business hours and at the place of business.
3. It must be made by the person who is able and willing
4. In case of tender goods, it must be for the quality and quantity agreed upon. The buyer is
not bound to accept the delivery of goods in instalments, neither when they are more or less
than the quantity agreed.
5. In case of tender of goods reasonable opportunity must be given to the promise to examine
the goods
6. It must be made to the promise or his authorised agent
7. It must be made to any one of the joint promises
8. In case of tender of money, the payment must be made in legal tender money.

II EFFECTS OF REFUSAL OF A PARTY TO PERFORM PROMISE WHOLLY

Where a party to a contract refuses to perform or disables himself from performing his promises in
its entirety, the promise may put an end to the contract unless the promise has signified by his
words or conduct acquiescence in its continuance.
Who must perform the promise?

1. By the promisor himself: In the case of a contract involving personal skill, taste or credit, the
promisor must himself perform the contract.
2. By the legal representatives: In the where the promisor dies before the performance, the
legal representatives of the deceased promisor is bound to perform the contract.
3. By third parties: Where the promisee accepts the performance from a third party, he cannot
afterwards enforce it against the promisor.
4. By Joint promisors: In case of joint promisors the promisors are jointly or severally liable to
fulfil their promise.

Who can demand a performance?

1. The promise himself: The promisee can demand performance of contract

2. Legal Representative: In case of death of the single promise, his legal representative can
demand performance.
3. Joint Promisee: In case there are more than one promise, then the right to demand
performance is to be exercised jointly by the surviving joint promises and the legal
representative of the deceased joint promises.

III TIME AND PLACE OF PERFORMANCE

Parties are free to determine the time and place of performance under the terms of contract itself.
Legal rules regarding time and place of performance are given in sec 46 to 50. The rules are as
follows:

1. The performance of the contract should be executed according to the time and place as
prescribed by the promisee in the contract.
2. The performance of a contract where the date has been mentioned and no place has been
fixed: The promise should be performed on that date during the usual business hours at the
place at which the promise should be performed.
3. The performance of a contract where the time and place of performance has not been
mentioned: If no time and place has been prescribed by the promise, then the contract must
be performed at a reasonable time and a proper place. Reasonable time and place is, in each
situation, a question of fact.

IV ASSIGNMENT OF THE CONTRACT

Assignment of the contract means transfer of rights and liabilities arising out of a contract to a third
party. Where the contract is not dependent upon personal skills, abilities etc of a certain person, it
may be assigned to certain conditions.

Contracts can be assigned in two ways:

- By the act of parties

- By operation of law
Assignment by act of parties: A contract which does not require expressly or impliedly performance
only by the promisor then it may be assigned if both the parties to the agreement agree for the
same.

Assignment by operation of law:

- Death: After death of a party to a contract his rights and liabilities are passed on to his heirs
or legal representatives. Their liability is limited to the amount of property inherited.
- Insolvency: Under the insolvency law the rights and liabilities are passed to the official
receiver or assignee.