PERFORMANCE OF CONTRACTS
Meaning
Performance of contract means the contracting parties fulfil their obligation arising
under the contract within the time and in prescribed mode.
Definition
Section 37 of the contract lays down that “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 provisions of this Act, or of any other law”,
TYPES OF PERFORMANCE
1. ACTUAL PERFORMANCE
When each party to a contract fulfils his respective obligation arising under the
contract as per the terms of the contract.
2. ATTEMPTED PERFORMANCE ( TENDER)
When the promisor has made an offer of performance to the promisee and the
offer has not been accepted by the promisee it is called attempted performance.
a. Tender of goods or services
Where the attempted offer involves the supply of goods or services it is known as
tender of goods.
b. Tender of money
If the attempted performance is for the payment Of the money it is known as
tender of money.
Essentials of a Valid Tender
In order to be a valid attempted performance’ or ‘tender’ the following conditions
according to Section 38 of the Contract Act, must be satisfied
1. It must be unconditional
A tender becomes conditional if it is not in Accordance with the terms of the
contract. Where a tender or offer of performance is conditional, the other party
is under no obligation to accept it.
Example
A offer to deliver 250 bags of rice to B if B sells his car to A. It is a conditional tender
and hence invalid,
2. It must be made at a proper time and place
3. It must be in the proper form
4. It must be made to a proper person
5. Reasonable opportunity to inspect
6. The person making a tender must be able and willing to perform his
obligation.
Who May Perform The Contract
1. Promisor
If the contract involving personal skill and qualification of the promisor
should performed by the promisor himself.
2. Legal representative promisor
A contract can be performed by legal representative after the death
of promisor if it doesn’t involve personal skill of promisor.
3. Promisor agent.
A contract can perform by the agent of promisor in his existence if it
doesn’t involve personal skill of promisor.
4. Third person
A contract can be performed by a third party if the promisee accept
the arrangement.
Who Can Demand The Performance Of Contract
1. Promisee
2. Legal representative of promisee
3. Third party
CONTRACT WHICH NOT BE PERFORMED
1. When the performance become impossible
2. When the parties to a contract agree to substitute a new contract.
3. When the promisee releases from his obligation
4. When voidable contract is set a side
5. When tender of goods
6. When contract become illegal.
RECIPROCAL PROMISE
Reciprocal promise refers to a situation where two or more parties make promises
to each other, and the performance of one promise is dependent on the
performance of the other.
Reciprocal promise means that two people (or parties) make promises to each
other.
Rules Regarding Performance Of Reciprocal Promise
• Regarding simultaneous performance.
• Regarding order of performance.
• Effects of preventing performance.
• Effect of non performance by the party who is to perform first.
• Alternative promise one branch being illegal.
ASSIGNMENT OF CONTRACT.
Assignment of contracts means transfer of contractual rights and liabilities to a
third party.
METHODS OF ASSIGNMENT OF CONTRACT,
1. Assignment by act of parties.
2. Assignment by operation of law.
Death, insolvency
