Discharge of Contracts

Common-sense approach
• A contract gives rights and duties
• Contract may have two or more parties
• Perform or offer to perform or refuse or agree to terminate
• Who can perform – joint promises, joint performance, joint rights
• Time and place of performance
• Not possible to perform, force majeure or unlawful
• Breach of contract
Discharge or Termination of Contracts
A contract is said to be discharged or terminated when the rights and
obligations arising out of a contract are extinguished.
• Contracts may be discharged or terminated by any of the following
modes:
• Performance, i.e. by fulfilment of the duties undertaken by parties or by
tender.
• Mutual consent or agreement.
• Lapse of time;
• Operation of law;
• Impossibility/illegality of performance; and
• Breach of contract.
Discharge by Performance
• When both the parties perform all the primary obligations both
express and implied which are set out under the contract.
• The obligation is considered performed only if the performance
complies with the standard of performance required.
• A failure to do so constitutes a breach.
• Standard of Performance requires precise and complete performance
of the obligation - description, fitness for purpose, satisfactory quality
etc. Exception could be the de minimis rule i.e. only microscopic
deviations.
• Actual performance or Attempted performance
Perform or Offer to Perform
• Sec. 37 states that parties to a 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 of any other law.
• Promises bind the representatives of the promisors in case of the death of
such promisors before performance, unless a contrary intention appears
from the contract.
• Courts have held that the proviso to S.37 maintains that the promise binds
the representatives. In the case of Basanti Bai v. Prafulla Kumar Routral,
Cuttack High Court held that
• “if the contract is legal, and enforceable, then even if one of the parties to the
contract dies leaving no legal heir, the persons, who acquire interest over the
subject- matter of the contract through that deceased party would be bound by the
contract and specific performance can be enforced against such persons.”
Offer of performance (S.38)
• If the promisor ‘offers’ to perform his obligation under the contract to the
promisee, this offer is then termed ‘tender of performance’.
• This then, has to be accepted by the promisee, if the promisee doesn’t accept
the offer, then the promisor will not be responsible for any non-performance.
• It entitles him to sue the promisee for breach of contract.
• It can be said that a tender of performance is equivalent to performance. A
tender can be of two types:
• Tender of goods and services - discharge is completed when the goods are tendered
for acceptance in accordance with the terms of contact. If not accepted they are to be
taken back by the offeror and he is discharged from his liability.
• Tender of money - debtor tenders the money but it is refused, the debtor is not
discharged from the lability to pay back the money. Therefore, a tender of money can
never result in the discharge of debt
Essential conditions for a tender
• The offer should be unconditional; (38-1)
• If tender does not follow the original terms, it becomes conditional
• Offer to be made at a proper time and place; allow the party to have a
reasonable time for ascertaining that the person making the offer to him is
competent to enter into a contract; (38-2)
• Tender should mandatorily be made at the time/place stipulated under the
contract.
• Provide reasonable time to offeree, so that he can ascertain that the
goods offered are the same which bound the offeror under the contract.
(38-3)
• Tender must be made to the proper person
• Tender made to one of several joint promisees has the same effect as a
tender to all of them:
Who can demand performance?
• Generally speaking, a stranger to contract cannot sue and the person
who can demand performance is the party to whom the promise is
made. But an assignee of the rights and benefits under a contract may
demand performance by the promiser

Effect of refusal of party to perform wholly

• Section 39 provides that 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 had signified by
words or conduct his acquiescence in its continuance.
By whom contracts must be performed
• 40. Person by whom promise is to be performed.—If it appears from the
nature of the case that it was the intention of the parties to any contract
that any promise contained in it should be performed by the promisor
himself, such promise must be performed by the promisor. In other cases,
the promisor or his representatives may employ a competent person to
perform it.
• 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.
• A promises to paint a picture for B. A must perform this promise personally.
• 41. Effect of accepting performance from third person.—When a promisee
accepts performance of the promise from a third person, he cannot
afterwards enforce it against the promisor.
Substituted performance
• Also known as ‘vicarious performance’. The promisor in the absence of
waiver cannot substitute for the agreed performance anything different,
even though the substituted performance might appear to be better
than, or at least equivalent to, the agreed performance.
• Sec. 40 and Sec. 41 deal with this aspect. If a personal performance was
intended then the contract has to be performed by the promisor
himself. It cannot be delegated to any other person.
• This is generally in cases where in the personal skill of the promisor is
required. The nature of promise is an indication whether the promisor
has to perform it personally or not.
• When a promisee accepts performance of the promise from a third
person, he cannot afterwards enforce it against the promisor. (41)
 Joint Promises and their Performance
• Joint promisors must fulfil the promise. If any one of them dies, then the legal heirs of the
deceased person along with the other surviving promisors have to perform. (42)
• When two or more persons 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 fulfil the promise.
• When two or more persons make a joint promise, the promisee may, in the absence of express
agreement to the contrary, compel any one or more of such joint promisors to perform the whole
of the promise. (43)
• It allows action to be brought against any one of the joint promisors without impleading others as
defendants. If creditor sues one joint promisor, he is allowed to sue the others at a later point.
• Mukund Das Raja Bhagwan Das v. State Bank of Hyderabad - held that when a joint promise is made and
there is no express agreement to the contrary, the promisee may compel any one or more of the joint
promisors to perform the whole of the promise.
• 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 or joint promisors neither does it
free the joint promisors so released from responsibility to the other joint promisor or joint
promisors. (44)
Devolution of Joint Rights
• A promise may be made to two or more persons. The promisees are called
joint promisees.
• 45. Devolution of joint rights.—When a person has made a promise to
two or more persons jointly, then, unless a 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 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
• X may give a promise to repay Rs. 1,000 given by Y and Z jointly. In such case, In the
absence of a contrary intention, the right to claim, performance rests with Y and Z.
If Y dies, Y's representative jointly with Z may, demand performance. If Z also dies
the representatives of Y and Z may demand jointly performance from X
Time and place for performance
46. Time for performance of promise, when 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.
The question “what is a reasonable time” is, in each particular case, a question of fact.
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 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.
A promises to deliver goods at B’s warehouse on the first January. On that day A brings the goods to B’s
warehouse, but after the usual hour for closing it, and they are not received. A has not performed his promise.
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 performance at a proper
place and within the usual hours of business.
The question “what is a proper time and place” is, in each particular case, a question of fact.
Time and place for performance
• 49. Place for 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 no 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 place.
• A undertakes to deliver a thousand maunds of jute to B on a fixed day. A must
apply to B to appoint a reasonable place for the purpose of receiving it, and
must deliver it to him at such place.
• 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.
Tender to be made at a proper time and place
• When no time for performance is specified in the contract, it must be done within a
reasonable time. What is a reasonable time is in each particular case, a question of fact.
• If the date of performance is fixed, it must be performed during the usual business
hours of the day and at the place where such a performance ought to be performed.
• When a promise has to be performed within a certain time, it must be performed on
any day before the lapse of that time.
• If the promisor brings the goods after the business hours and they are not received, it
cannot be said that the promise has been performed.
• When a promise is to be performed and no place is fixed, 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.
• Where in a promissory note executed at Bangalore stated that it would be payable at
Bangalore or at any place in India. The payee settled in New Delhi and demanded
payment there.
 Performance of reciprocal promises
• 51. Promisor not bound to perform, unless reciprocal promisee ready and willing
to perform.—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.
• 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 order is not expressly fixed by the
contract, they shall be performed in that order which the nature of the transaction
requires.
• 53. Liability of party preventing event on which the 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 in consequence of the non-
performance of the contract.
Which promise to be performed first (54)
• Effect of default as to that promise which should be first 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 non-performance of the
contract.
Failure to Perform in a timely manner
• 55. Effect of failure to perform at fixed time, in contract in which time is essential.—
When a party to a contract promises to do a certain thing at or before a specified time, or
certain things at or before specified times, and fails to do any such thing at or before the
specified time, the contract, or so much of it as has not been performed, becomes
voidable at the option of the promisee, if the intention of the parties was that time should
be of the essence of the contract.
• Effect of such failure when time is not essential.—If it was not the intention of the parties
that time should be of the essence of the contract, the contract does not become voidable
by the failure to do such thing at or before the specified time; but the promisee is entitled
to compensation from the promisor for any loss occasioned to him by such failure.
• Effect of acceptance of performance at time other than that agreed upon.—If, in case of
a contract voidable on account of the promisor's failure to perform his promise at the time
agreed, the promisee accepts performance of such promise at any time other than that
agreed, the promisee cannot claim compensation for any loss occasioned by the non-
performance of the promise at the time agreed, unless, at the time of such acceptance, he
gives notice to the promisor of his intention to do so.
• 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 promises is
a contract, but the second is a void agreement.
• A and B agree that A shall sell B a house for 10,000 rupees, but that, if B uses
it as a gambling house, he shall pay A 50,000 rupees for it.
• First set of reciprocal promises is a contract, second set being for an unlawful
object, is a void agreement.
• 58. Alternative promise, one branch being illegal.—In the case of an
alternative promise, one branch of which is legal and the other illegal,
the legal branch alone can be enforced.
Discharge by Mutual Agreement or Consent (62 - 63)
• A contract may be discharged by an agreement of all parties to the contract, or
by waiver or release by the partly entitled to performance.
• The method stipulated under Section 62 and 63 for discharging a contract by
mutual consent are:
• Novation- when a new contract is substituted for existing contract either between the
same parties or between different parties, the consideration mutually being the
discharge of the old contract.
• Alteration- change in one or more of the material terms of a contract.
• Rescission- by agreement between the parties at any time before it is discharged by
performance or in some other way.
• Remission- acceptance of a lesser sum than what was contracted for or a lesser
fulfilment of the promise made.
• Waiver- deliberate abandonment or giving up of a right which a party is entitled to under
a contract, where upon the other party to the contract is released from his obligation.
Discharge by Impossibility or Frustration
(56)
• A contract which is entered into to perform something that is clearly
impossible is void. 56-1
• Subsequent impossibility renders the performance of a contract unlawful
and stands discharged; 56-2 provides that a contract to do an act, which
after the contract is made becomes impossible or by reason of some event
which the promisor could not prevent is unlawful becomes void when the
act become impossible or unlawful.
• Impossibility or illegality not obvious, promisor alone knows or might have
known with reasonable diligence, promisor bound to compensate the
promisee for any loss he may suffer through the non-performance of the
promise in spite of the agreement being void ab-initio (56-3).
• Law does not recognise what is impossible
• What is impossible does not create an obligation
Satyabarta Ghose v. Mugnuram
• SC interpreted the term 'impossible' appearing in second paragraph of Section 56.
• The word 'impossible' has not been used here in the sense of physical or literal
impossibility.
• Performance may not be literally impossible but it may be impracticable and useless
from the point of view of the object and purpose which the parties had in view; and
if untoward event or change of circumstances totally upsets the very foundation
upon which the parties rested their bargain; it can very well be said that the
promisor found it impossible to do the act which he promised to do.
• A undertook to sell a plot of land to B but before the plot could be developed, war
broke out and the land was temporarily requisitioned by the Government. A offered
to return earnest money to B in cancellation of contract. S did not accept and sued
A for specific performance. A pleaded discharge by frustration. The Court held that
Section 56 is not applicable on the ground that the requisition was of temporary
nature and there was no time limit within which A was obliged to perform the
contract. The impossibility was not of such a nature which would strike at the root
of the contract
Doctrine of Frustration
• The doctrine of frustration applies where unforeseen events occur which
render performance of a contract impossible or only possible in a radically
different way from that originally contemplated.
• Initial impossibility:S.56 - “an agreement to do an act impossible in itself is
void”.
• agreement to discover treasure by magic, impossibility of performance, is void. An
agreement to do an act that is impossible from the very beginning whether the parties
were aware of such impossibility or not the agreement will be void.
• Subsequent impossibility - deals with cases where the contract was possible
to perform when it was entered but because of some event, the performance
has become impossible or unlawful and therefore it discharges the party from
performing it.
• A purchased Tickets from B for watching a cricket match and he pays 50% as an
advance. If the match is cancelled then A can not recover from B as the cancellation of
match was beyond the control of A.
Generally, frustration of contract can be in the following cases
• Death or incapacity of a party:- Where a party to the contract has died after
entering into contract or the party is incapable of performing the contract,
in such a situation the contract will be void ( Robinson v Davison).
• Frustration by virtue of legislation:- Where, a law promulgated after the
contract is made, makes the performance of the agreement impossible and
thereby the agreement becomes void ( Rozan Mian v Tahera Begum).
• Frustration due to change of circumstances:- This particular situation deals
with those cases where there was no physical impossibility of performance
of the contract, but because of the change in circumstances, the main
purpose for which the contract was entered has been defeated.
Force Majeure
• 'an event or effect that can be neither anticipated nor controlled'. The
term includes both acts of nature (e.g. floods and hurricanes) and acts
of people (e.g. riots, strikes and wars).
• Such a clause may be inserted into a contract
• Force majeure and the doctrine of frustration of contract are different
concepts.
• Cardinal ingredients of Section 56 of ICA:
• There must be a valid contract;
• The performance of the contract is yet to be made or is ongoing; and
• The aforesaid performance becomes impossible by way of facts or law.
Force Majeure and S.56
• An illustrative list of situations where S.56 may apply
• Destruction of subject matter;
• Death or incapacity for personal service;
• Non- existence or non- occurrence of a particular state of things;
• Intervention by legislative or executive authority;
• Intervention of war; and
• Change of circumstances of particular state of things.
• Two Covid related issues
• Will provisions of S.56 apply if there is no FM clause, and
• Will Force Majeure include Covid or not. As per a GoI circular should be
considered as a case of natural calamity and force majeure clause may be
invoked whenever considered appropriate, following due procedure."
Discharge by Supervening Impossibility
• A contract will be discharged by subsequent or supervening
impossibility in any of the following ways:
• Where the subject-matter of the contract is destroyed without the
fault of the parties, the contract is discharged.
• When a contract is entered into on the basis of the continued
existence of a certain state of affairs the contract is discharged if
the state of things changes or ceases to exist.
• Where the personal qualifications of a party is the basis of the
contract, the contract is discharged by the death or physical
disablement of that party.
Discharge by Supervening Illegality
• A contract which is contrary to law at the time of its formation is void.
• But if, after the making of the contract, owing to alteration of the law
or the act of some person armed with statutory authority the
performance of the contract becomes impossible, the contract is
discharged.
• This is so because the performance of the promise is prevented or
prohibited by a subsequent change in the law.
• A enters into contract with B for cutting trees. By a statutory provision cutting
of trees is prohibited except under a licence and the same is refused to A. The
contract is discharged.
Cases in which there is no supervening
impossibility
• In the following cases contracts are not discharged on the ground of
supervening impossibility
• The mere fact that performance is more difficult or expensive than the
parties anticipated does not discharge the duty to perform.
• Commercial impossibilities do not discharge the contract. A contract
does not become expectation of higher profits is not realised.
• Impossibility of performance is, as a rule, no excuse for non-performance
• Strikes, lockouts and civil disturbance like riots do not terminate
contracts unless there is a clause in the contract providing for non-
performance in such cases.
Discharge by Operation of the Law
Discharge under this head may take place as follows:
• By merger: When the parties embody the inferior contract in a superior
contract.
• By the unauthorised alteration of items of a written document: Where a
party to a written contract makes any material alteration without
knowledge and consent of the other, the contract can be avoided by the
other party.
• By insolvency: The Insolvency Act provides for discharge of contracts
under particular circumstances. For example, where the Court passes
an order discharging the insolvent, this order exonerates or discharges
him from liabilities on all debts incurred previous to his adjudication.
Discharge by Lapse of Time
• The Limitation Act, in certain circumstance, affords a good defence to
suits for breach of contract, and in fact terminates the contract by
depriving the party of his remedy to law.
• For example, where a debtor has failed to repay the loan on the
stipulated date the creditor must file the suit against him within three
years of the default.
• If the limitation period of three years expires and he takes no action
he will be barred from his remedy and the other party is discharged of
his liability to perform.
Discharge by Breach
• Where the promisor neither performs his contract nor does he tender
performance, or where the performance is defective, there is a
breach of contract.
• It may be actual or, anticipatory.
• Actual breach may take place either at the time the performance is
due, or when actually performing the contract. Refusal may be
express or implied
• Anticipatory breach is a breach before the time for the performance
has arrived.
• Promisor doing an act which makes the performance of his promise
impossible, or
• by the promisor in some other way showing his intention not to perform it
Anticipatory Breach of Contract
• One of the parties renounces the contract and shows his intention not to
perform it or does some act which makes performance impossible.
• The other party has a right of action for damages.
• He may either sue for breach of contract immediately after repudiation or
wait till the actual date when performance is due and then sue for breach.
• If the promisee adopts the later course, he keeps the contract alive for the
benefit of the promisor as well as for his own. He remains liable under it an
enables the promisor not only to complete the contract in spite of previous
repudiation, but also to avail himself of any excuse for non-performance
which may have come into existence before the time fixed for performance.
Remedies for Breach of Contract
Where a contract is broken, the injured party has several courses of
action open to him. The appropriate remedy depend upon the subject-
matter of the contract and the nature of the breach.
• Rescind the contract and refuse further performance of the contract;
• Sue for damages;
• Sue for specific performance;
• Sue for an injunction to restrain the breach of a negative term; and
• Sue on quantum meruit
• A Latin phrase “what one has earned” or “as much as he has earned”. ... Even
if there is no specific contract this law implies a promise to pay a reasonable
amount for the labour and material furnished.
Remedies for Breach of Contract
• When a party to a contract has broken the contract, the other party
may treat the contract as rescinded and he is absolved from all his
obligations under the contract.
• When a party treats the contract as rescinded, he makes himself
liable to restore any benefits he has received under the contract to
the party from whom such benefits were received (65).
• Section 64 deals with consequences of rescission of voidable
contracts. When a person at whose option a contract is voidable
rescinds, the other party thereto need not perform any promise
therein contained in which he is the promisor. The party rescinding a
voidable contract to restore all benefits received under the contract.
• S. 73 -Party who suffers from the breach of contract entitled to
receive compensation/reimbursement for any loss caused to him,
which naturally arose in the usual course of things from such breach,
from the party who has broken the contract.
• In case, loss is caused by some indirect connections with the breach
of contract, then the affected party is not entitled to demand
compensation/reimbursement.
The Hadley v Baxendale Rule - elaborated upon two concepts:
1. On the breach of contract such damages or loss can be recovered as may
justly and reasonably consider arising naturally, that is, according to the
usual course of things from such breach.
2. On the breach of contract such damages can be recovered as may
reasonably be supposed to have been in the contemplation of both parties
at the time they made the contract.
74. Compensation for breach of contract where penalty stipulated for
- When a contract has been broken,
• if a sum is named in the contract as the amount to be paid in case of
such breach, or
• if the contract contains any other stipulation by way of penalty, the
party complaining of the breach is entitled, whether or not actual
damage or loss is proved to have been caused thereby, to receive
from the party who has broken the contract reasonable compensation
not exceeding the amount so named or, as the case may be, the
penalty stipulated for.
• —A stipulation for increased interest from the date of default may be a
stipulation by way of penalty
• 75. Party rightfully rescinding contract, entitled to compensation.—
• A person who rightfully rescinds a contract is entitled to
compensation for any damage which he has sustained through the
non-fulfilment of the contract.
The Act
PRELIMINARY
1. Short title. Extent. Commencement. Saving.
2. Interpretation-clause.
CHAPTER I -OF THE COMMUNICATION, ACCEPTANCE AND REVOCATION OF PROPOSALS
3. Communication, acceptance and revocation of proposals.
4. Communication when complete.
5. Revocation of proposals and acceptances.
6. Revocation how made.
7. Acceptance must be absolute.
8. Acceptance by performing conditions, or receiving consideration.
9. Promises, express and implied.
CHAPTER II - OF CONTRACTS, VOIDABLE CONTRACTS AND VOID AGREEMENTS

10. What agreements are contracts.

11. Who are competent to contract.
12. What is a sound mind for the purposes of contracting.
13. “Consent” defined.
14. “Free consent” defined.
15. “Coercion” defined.
16. “Undue influence” defined.
17. “Fraud” defined.
18. “Misrepresentation” defined.
19. Voidability of agreements without free consent.
19A. Power to set aside contract induced by undue influence.
20. Agreement void where both parties are under mistake as to matter of fact.
21. Effect of mistakes as to law.
22. Contract caused by mistake of one party as to matter of fact.
CHAPTER II - OF CONTRACTS, VOIDABLE CONTRACTS AND VOID AGREEMENTS

23. What considerations and objects are lawful, and what not.
Void agreements
24. Agreement void, if considerations and objects unlawful in part.
25. Agreement without consideration, void, unless it is in writing and registered, or is a promise to
compensate for something done, or is a promise to pay a debt barred by limitation law.
26. Agreement in restraint of marriage, void.
27. Agreement in restraint of trade, void.
Saving of agreement not to carry on business of which good-will is sold.
28. Agreements in restraint of legal proceeding void.
Saving of contract to refer to arbitration dispute that may arise.
Saving of contract to refer questions that have already arisen.
Saving of a guarantee agreement of a bank or a financial institution.
29. Agreements void for uncertainty.
30. Agreements by way of wager, void.
Exception in favour of certain prizes for horse-racing.
Section 294A of the Indian Penal Code not affected
CHAPTER III OF CONTINGENT CONTRACTS

31. “Contingent contract” defined.

32. Enforcement of contracts contingent on an event happening.
33. Enforcement of contracts contingent on an event not happening.
34. When event on which contract is contingent to be deemed
impossible, if it is the future conduct of a living person.
35. When contracts become void which are contingent on happening of
specified event within fixed time.
When contracts may be enforced, which are contingent on specified
event not happening within fixed time.
36. Agreement contingent on impossible events void.
CHAPTER IV OF THE PERFORMANCE OF CONTRACTS

Contracts which must be performed

37. Obligation of parties to contracts.
38. Effect of refusal to accept offer of performance.
39. Effect of refusal of party to perform promise wholly.
By whom contracts must be performed
40. Person by whom promise is to be performed.
41. Effect of accepting performance from third person.
42. Devolution of joint liabilities.
43. Any one of joint promisors may be compelled to perform.
Each promisor may compel contribution.
Sharing of loss by default in contribution.
44. Effect of release of one joint promisor.
45. Devolution of joint rights.
CHAPTER IV OF THE PERFORMANCE OF CONTRACTS

Time and place for performance

46. Time for performance of promise, when no application is to be
made and no time is specified.
47. Time and place for performance of promise, where time is specified
and no application to be made.
48. Application for performance on certain day to be at proper time
and place.
49. Place for performance of promise, where no application to be made
and no place fixed for performance
50. Performance in manner or at time prescribed or sanctioned by
promise.
CHAPTER IV OF THE PERFORMANCE OF CONTRACTS
Performance of reciprocal promises
51. Promisor not bound to perform, unless reciprocal promisee ready and willing to perform.
52. Order of performance of reciprocal promises.
53. Liability of party preventing event on which the contract is to take effect.
54. Effect of default as to that promise which should be first performed, in contract consisting
of
reciprocal promises.
55. Effect of failure to perform at fixed time, in contract in which time is essential.
Effect of such failure when time is not essential.
Effect of acceptance of performance at time other than that agreed upon.
56. Agreement to do impossible act.
Contract to do an act afterwards becoming impossible or unlawful.
Compensation for loss through non-performance of act known to be impossible or unlawful.
57. Reciprocal promise to do things legal, and also other things illegal.
58. Alternative promise, one branch being illegal.
CHAPTER IV OF THE PERFORMANCE OF CONTRACTS

Appropriation of payments
59. Application of payment where debt to be discharged is indicated.
60. Application of payment where debt to be discharged is not indicated.
61. Application of payment where neither party appropriates.
Contracts which need not be performed
62. Effect of novation, rescission, and alteration of contract.
63. Promise may dispense with or remit performance of promise.
64. Consequences of rescission of voidable contract.
65. Obligation of person who has received advantage under void agreement, or
contract that becomes void.
66. Mode of communicating or revoking rescission of voidable contract.
67. Effect of neglect of promisee to afford promisor reasonable facilities for
performance.
CHAPTER V OF CERTAIN RELATIONS RESEMBLING THOSE CREATED BY CONTRACT

68. Claim for necessaries supplied to person incapable of contracting,

or on his account.
69. Reimbursement of person paying money due by another, in
payment of which he is interested.
70. Obligation of person enjoying benefit of non-gratuitous act.
71. Responsibility of finder of goods.
72. Liability of person to whom money is paid, or thing delivered, by
mistake or under coercion.
CHAPTER VI OF THE CONSEQUENCES OF BREACH OF CONTRACT

73. Compensation for loss or damage caused by breach of contract.

Compensation for failure to discharge obligation resembling those
created by contract.
74. Compensation for breach of contract where penalty stipulated for.
75. Party rightfully rescinding contract, entitled to compensation.