PERFORMANCE OF CONTRACT ind Definition Section 37 states, “The parties to a contract must either perform or offer te perform, the'r respective promises, unless such performance is dispenecd cin oF excused under the provisions of this Act or any other law" It means the parties may discharge their duties either by actually Berforming the contract or by making an offer to perform it. When a contrac 2 performed by both the parties, the contract comes to an end. The ies regarding performance of contracts are as under: PERFORMANGE OF SINGLE PROMISE A tingle promise is @ promise in which there is one promisor and one promises. Demand for Performance 'na single promise, the rules to demand performance are 2s under 1. Promisee It ig only the promise who can demand performance of a contract. A arg Barty cannat demand performance of the contract even though i fe man kor his benefit. EXAMPLE A promises 8 to pay Ra. 500 to C. A did not pay to C. Only 8 can demand performance from A. C cannot demand performance from A, 2. Legal representative In case of death of the promisee, nis rogal representatives can demand mance of contract unless a contrary intention appears form the contract or a 6 Pouaht rice from B. B died before the recovery of payment. Legal representatives’ of 8 can demand performance. . >. X promises to paint a picture for Y on @ specified day, Y dies before thet ay. Legal representatives of Y cannot demand perlormance of promise fameoe he js not @ party to the contract. However, a third pary can demercone perfomance of contract in some exceptional cases, eg. beneficiary in trust,66 assignee of coniract ete L EXAMPLE A transfers property to B under trust for the benefit of M. M can demand the performance of contract from 8. Performance of Contract Generally, a contract can be performed by the following persons: 4. Promisor A contract must be performed by the promisor himself. In case of a contract involving personal skill, the promisor himself must perform the contract. in case of death or disablement of a promiscr, the contract will be discharged. (Sec. 40 Para 1) EXAMPLE C promises to paint a picture for B. C must perform the contract himself. 2. Agent In a contract where no personal skill is involved, the promisor may employ an agent to perform the contract. (Sec. 40 Para 2) [EXAMPLE C promises to sell goods to B.C can appoint his agent to perform the contract 3. Legal Representatives In a contract which involves personal skill, the legal representatives of a deceased promisor are nol bound to perform the contract. But in a contract which does not involve personal skill, the legal representatives are bound to perform the contract. The legal representatives are liable up to the value of property of the deceased inherited by them. The legal representatives are not personally liable. (Sec. 37) EXAMPLES: 8 © promises to deliver goods to B on payment of Rs. 1000. C dies, Legal representatives of C are bound to deliver the goods to B, and B is bound to pay Rs, 1000 to legal representatives of C. b. © promises to paint a picture for B on a certain day, C dies before that day The contract cannot be enforced against the legal representatives of C, 4. Third Person ‘The third party may perform the promise if the promise accepts the performance. When a promisee accepts performance of the promise from a third person, he cannot afterwards enforce it against the promisor. [Sec. 41] formance of ContractPerformance of Contract 67 A borrows Rs. 2 Lac trom B and promises to repay within a month, G, the father of A, pays Rs. 2 Lac to B. A is discharged from his liability, PERFORMANCE OF JOINT PROMISE In a joint promise, two or more persons enter into a joint agreement with ‘one or more persons. Demand for Performance The rules of demand for performance are as under: 1, Promises When a promise is made with several persons jointly, all the promisees can jointly demand performance of promise and a single promisee cannot demand performance. (Sec, 45] EXAMPLE & borrows Rs. 2 Lec from 8 and C. Only B and C can demand the performance jointly. of death of any promises, the legal representatives of ‘the see along with surviving promises can jointly demand Performance. When all promisees are dead, the legal representatives of all promisees can jointly demand performance, [Sec. 45] [exampce | ; A borrows Rs. 5 Lac from B and C. if B dies, B's legal representative and C jointly can demand performance. Performance of Contract ‘The rules of performance of contract are as under: 4. All Promisors When two or more persons make a joint promise, all such persons must jointly fulfill the promise unless a contrary intention appears from the contract. Where one of the joint promisors dies, his legal representatives must fulfil the promise jointly with the remaining promisors. On death of all the promisors, the | representatives of all must jointly fulfil the promise. (Sec. 42] EXAMPLE : ‘A.B and C jointly promise to pay Rs. 3,000 to D. A, 8 and © must contribute Rs. 1,000 each. If A dies, then legal representatives of A are liable to pay Rs. 1,000 along with B and C. 2. Any One of Promisors In the absence of any express agreement to the contrary, the promisee aoe ‘any one or more of the joint promisors to perform the promise, [Sec. ara88 Performance of Contract EXAMI . B and C jointly promise to pay D. Rs. 3000. D may compel either A or B or C to pay the whole amount. 3, Demand of Contribution If one of the joint promisors is compelled to perform the whole contract, he can recover contribution from the other joint promisors. equally uniess a contrary intention appears from the contract. (Sec. 43 Para 2] EXAMPLE ‘A, B and C jointly promise to pay D, Rs. 3000. If A is compelled to pay the entire amount of Rs, 3000, he can recover Rs. 1000 each from B and C. 4. Default in Contribution If any one of the joint promisors makes default in making contribution, if any, the remaining joint promisors must bear the loss arising out of such default in equal shares. (Sec. 43 Para 3] EXAMPLE A, B and C are under jeint promise to pay Rs, 3000 to D. If Cis unable to Pay anything, then A and B must pay Rs. 1600 each. 5. Release of Promisor In case of a joint promise, if one of the joint promisors is released from his liability by the promisee, that promisor remains liable to other promisors to contribute. (Sec, 44] EXAMPLE A, B and C jointly promise to pay Rs. 3000 to X. X releases © trom liability. A and B pay to X. G remains liability to pay 10 A and B. Assignment of Contract ‘An assignment means transfer. Assignment of contract means transfer of rights and liabilties to a third party. It may occur by (1) act of parties or (2) ‘operation of law 1. Act of Partie i, a contract involves personal skil or ability, the lisbilties cannot be assigned to another person. For example, in case of painting a picture, a party cannot delegate the liability of performance to another. [Sec. 40} ii, If @ contract expressly provides that the contract shall be performed by the Promisor only, & party cannot delegate the liablty of performance to another,Cannot ask C to recover from A ‘ta contract does not expressly provide that it shall be Performed by the promiser only, the promisor can employ @ competent Person to perform the liability b. Contractual Rights The rulee are as under. ‘Ira contract involves personal skil, the rights cannot be assigned to a third Person. ‘\ [a contract does not involve personal skil, the rights can be assigned to a third person, 2. Operation of Law The rules are as under: *. Death ween death of a party to the contract, his rights. and liabilities are Conererred to his legal representatives. But if coniract imohves, Personal skil, the Contract comes to a i b. Insolvency In case a party to the contract is declared Insolvent, his rights and ‘receiver appointed by court The promise that is exchanged with the promise of another party is called promises, (promise. In this case, each party is the promicsr 38 well as the Promises. [Sec. 2 ()} The rules of performance are as follows: (Sec. 51-58) 1. Simultaneous Performance Where two promises are to be performed simultaneously, the promisor need not perform his promise unless the promisee "eady to perform his reciprocal promise. : ot delve tes sive, G00d8 to B ata price to be paid by B on deivary. A need not deliver the goods unless B is ready to Pay on delivery and B need not Bay unless A is ready to deliver goods on payment 2. Order of Performance Where the order of performance is expressly fixed by the contract, the contract must be performed in that order. Where ove ig Rot expressly fixed, they must be performed in the order which the. ature of transaction requires,Performance of Contract 8 to build a house for B at a fixed price. A’s promise to build the house must be performed before B's promise to pay for it. 3. Prevention of Performance When 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 can recover compensation from the other party for the loss he suffers. EXAMPLE. > Bagrees to do some work for A for Rs, 100. B is ready to do the work but ‘A prevents him from doing 80. The contract becomes voidabie at the option of B. 4. Conditional Performanre When performance of the promise by one party depends on prior performance of the promise by the other party, the promises are concitional and dependent If the promisor, who is responsible to perform his, promise in the first place, fails to perform it, such promisor cannot claim the performance of the reciprocal promise from the other party. He must make compensation tor any loss which such other party may suffer EXAMPLE A promises to sell 100 bales of cotton to B, to be delivered next day. B promises to pay within @ month, A does not deliver the bales of cotton. B need not perform and A must compensate. 5. Legei and Hllegat Promises ‘When persons reciprocally promise, firstly to do certain act which is legal and secondly to do certain other act which is illegal, the first promise is a contract and the second promise 's illegal. EXAMPLE A agrees t~ sell a house to B for Rs. 10 Lac. if B will use the house for gambling, he shail pay Rs. 50 Lac to A The first promise is a contract and second promise is illegal agreeme: 6. Alternative Promise In case of an alternative promise, one part of which is legal and other illegal, the legal part alone can bs enforced EXAMPLE ‘A agrees to pay Rs.1 Lac to B for which 8 shall deliver either rice or ‘opium. It is @ valid contract as'to rice and illegal agreement as to opium. Time and Place of Performance The rules of time and place of performance of contract are as follows:Performance of Contract 7 4, Reasonable Tim: Where time for performance is not specified in @ contract, and the promisee does not apply for performance, the promisor must perform the contract within reasonable time. The reasonable time depends on the nature of contract. (Sec. 46] EXAMPLE ‘A promises to deliver goods at B's house on 1st Mercfi before 1:00 P.M. A delivers goods before time. A has performed the contract. 2. Specified Date When promise is to be performed on a specified date but no time js mentioned, the promisor can perform at any time during the usual hours of business on that date: [Sec. 47] é EXAMPLE A promises to deliver goods at B's warehouse on 1st January. A brings the goods to B's warehouse after the usual hours of business. B can refuse to accept delivery of goods. 3. Proper Place Where promisor is to perform the contract on application by promisee, and promise is to be performed on a certain day, it i¢ duty of the promisee to apply for performance at a proper place and within usual hours of business. [Sec. 48] EXAMPLE A promises to deliver jute to B on 1stMay B agrees to specify the place of delivery later. B must apply to A to deci of contract 4. Reasonable Placi Where promise is to be performed without an application by the promise and no place is fixed, it is duty of the promisor to apply for performance at 2 reasonable place. (Sec. 49] EXAMPLE : ~_¥ agreed to deliver rice to B on 1st June but no place was fixed for delivery. A must ask B for the place of delivery of rice. 5. Prescribed by Promise ~ Where the promisee prescribes the manner or time for performance, the promise must be performed in the same manner and time. [Sec. 50] EXAMPLE A owes B Rs. 100, B agrees to send A, a note for Rs. 100 by post. The debt is discharged as soon as B sends the note by post to A.2 Performa Time Is of the Essence of Contract "Time is of the essence’ means that the time is an essential element of contract and the parties must perform their promise within specified time. The following are rules in this regard: [Sec. 55] 1. Essence of Contract ‘When time is of the essence of contract and the promisor fails to perform within fixed time, the contract becomes voidable at the option of the promisee. ‘The promisee may revoke the contract and sue for breach. Leebroremeet EXAMPLE : % agreed to deliver 20 books to Y on 12” May, 2018. X failed to deliver on time. The contract is voidable at the option of Y. 2. Not the Essence of Contract When time is not of the essence of contract and promisor fails to perform within the fixed time, the contract remains valid and the promisee wil have to accept the delayed performance. The promise can claim compensation for any loss due to delay in performance. The delay should be reasonable othemise it will become voidable at the option of promisee EXAMPLE ‘A promises to deliver a car to B on 1st May. A delivers it on 9th May. B wil have to accept the delivery. B can cizim damages only. 3. Delayed Performance When promisee accepts delayed performance instead of avoiding the contract, he cannot afterwards claim compensation for any loss caused by the delay unless at the time of accepting delayed performance, he gives notice to the promisor of his intention to do so. EXAMPLE | * ™M promises to supply bricks to N on 4" May. M delivers: on 8th May. N accepts the delayed delivery. Later, N cannot claim damages. Appropriation of Payment Appropriation of payment means application of payment to 2 particular debt. The foliowing are rules in this regard: [Sec. 59-61) 1. Appropriation by Debtor Where the debtor owing several debts siates that the payment made by him is to be applied to discharge @ particular debt, the creditor must apply the payment to discharge that particular debt. EXAMI a, Acwes B, among other debts, Rs. 1000 upon a pronoie which is due on 1st June. A owes B no other debt of that amount. On 1st June, A pays Rs. 1000 f Contraction, ifthe debtor does not specity the Gebt to which payment is to be applied, the creditor has the option to SRPY the payment to any lawful dept due from the Sebior irespective of the question of limitation, debts are of equal standing. the Payment shall be applied in discharge of each proportionately, EXAMPLE Contracts Need Not be Performed The following are provisions in this regard: (Sec. 62-67) 1+ Termination by Agreemont If patties to 8 contract agree to Novation, rescission of alteration, the deepal contract need not be performed. oY £40" cases, the original contract isappears andis substituted by 3 non contract. ‘A promised to supply certain goods to B afior 6 months. By that time, the S00ds got out of fashion. A-and B ‘mutually cancelled the contract. A need not Perform the Contract. 2. Remission ®Y Promisee Every promisee may remit, pmoly oF in part, the performance of the Pens®, OF extend the time for ster Performance, or accept any satistecice wich he thinks fi I is called remissioy1 Performance of Contract 3. Veidable Contract When a person at whose option a contract is voidable, rescinds it, the other party need not perform his promise. (eames A promises to buy a car from B by coercion. B can avoid the contract. if 8 rejects the contract, A need not pay the price to B. 4. Refusal to Accopt Performance i If promise refuses to provide the promisor reasonable facilities for Performance, the promisor need not perform the contract. | SaMeee ; A agiees to repair B's house, B neglects to point out the wall of his house which needs repair. A need not perform the contract. QuEsTIONS 1. Explain performance of a contract. State “rules regarding demand for performance and performance of contracts, 2. Explain the rules of demand for performance and performance of joint promise, 3. What are reciprocal promises? Explain the rules of performance of reciprocal promises Discuss the rules of assignment of contracts. Discuss the rules regarding time and place of performance, State the rules relating to appropriation of payment. Discuss the circumstances under which a contract need not be performed Nowe