Business Laws and Ethics (BLE)

Discuss About Law Related to Performance of Contract

Think and Grow Rich

Performance of Contract

Sec. 37 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.

Promises bind the representatives of the promisors in case of death of such promisors before the performance, unless a contrary intention appears from the contract.

E.g. ”A” promises to deliver goods to ”B” on a certain day on payment of Rs. 3,000. ”A” dies before that day. A’s representatives are bound to deliver the goods to ”B”, and ”B” is bound to pay Rs. 3,000 to A’s representatives.

The performance can be actual performance or attempted performance. Sec. 38 specifies that where a promisor has made an offer of performance to the promisee and the offer has not been accepted, the promisor is not responsible for non-performance, nor does he thereby lose his rights under the contract.

Parties who can Perform Contracts

Sec. 40 specifies that 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.

Effect of Accepting Performance from Third Person:

When a promisee accepts performance of the promise from a third person, he cannot afterward enforce it against the promisor.

.35 Devolution of Joint Liabilities : 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 fulfill the promise.

Each Promisor may Compel Contribution:

Each of two or more joint promisors may compel every other joint promisor to contribute equally with himself to the performance of the promise unless a contrary intention appears from the contract.

Sharing of loss by Default in Contribution:

If anyone of two or more joint promisors makes default in such contribution, the remaining joint promisors must bear the loss arising from such default in equal shares.

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.

Time and Place for Performance of Contracts

The time and place of performance are very important for a valid performance of a contract. Time for performance ‘of promise, where no application is to be made and no time is specified. A promisor has 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.

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.

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.

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 a place.

Contracts, which need not be Performed

Sec. 62 states the effect of novation, rescission, and alteration of the 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 the 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 or may accept instead of it any satisfaction which he thinks fit.

The consequence of rescission of a voidable contract is :

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 a voidable 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.

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-perf0rmance caused thereby.

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