Performace of Contract

8/7/2019 Performace of Contract

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PERFORMACE OF CONTRACT


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Performance Of Contract Every contract creates a legal obligation which

continues till the contract has been performed or

otherwise discharged. Performance of contract is the

most natural and usual mode of extinction of an

obligation.

Performance of a contract consists in doing or causing

to be done what the promisor has promised to do.


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Attempted performance or offer to Perform:

Sometimes it so happens that promisor

offer to perform his obligation but the promisee does

not accept. this is known as attempted performance or

tender.


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OFFER OF PERFORMANCE OR

TENDER Where the promisor has made an offer of

performance and offer has been promisoris not responsible for non performance.

Offer of performance is also a performanceknown as tender.

The motive of party tendering to perform'is to perform it. Thus a valid tender of

performance is considered to beperformance of a promise and it dischargea party from his obligation under acontract.


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Example

A enters in to a contract to

sell his car to B. A offers to deliver toB but B refuses to accept it .it is atender of performance made by a .Byoffering the car, A has completed his

part of promise.


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Essentials Of Valid Tender Of

Performance1. It should be unconditional.

2. It must be entire not the part only.

3. It should be made at proper timeand place.

4. The person making the tender must

be able and willing to perform it.5. The tender must provide reasonable

opportunity to the other party.


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6. It should be made to the properperson.

7. Tender in case of joint promises: anoffer to perform any one of them isvalid tender.

8. Tender in terms of money.


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Effect of Refusal to Tender of

Performance Sec 38 of the Indian contract

act,1872,provides that where a

promisor has made an offer ofperformance to the promisee,and theoffer has not been accepted ,thepromisor is not responsible for non

performance, nor does he lose hisright under the contract


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When one party tender theperformance of promise, the other

party refuse to accept it. The former party is discharged from

his liability. he is excused fromperformance and become entitled to

sue the latter to breach the contract.


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Example:A bought goods from B andpromised to pay Rs. 1000 to B on

10th

august. A went to b on 10th

august to give money but B did notaccept it. Here though he may not bedischarged from payment but he

would not be liable to pay anyinterest there on from 10th augustonwards.


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BY WHOM CONTRACT MUST BE

PERFORMED1. By the Promisor: contract has to be performed by

promisor himself and none else when:

there is something in contract to show that

personal performance was intended,or By Its very natural it requires personal

performance by the promisor,like contract to sing ,topaint.

2. By the Agent: where personal skill and choice isnot involved in contract ,and the promosor opt to

perform the contract through an agent

He can made a valid performance by doing so


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3. Legal representative of promisor:

where personal skill or choice is not involved in a

contract,the legal representative of a deceeased promisor arebound to perform the contract entered in to by him.however

there liability is confined to the extent of the assets obtained

from deceased.

4. Third person:when a promisee accepts performance ofpromise from a third person,he cant afterwards enforce it against

the promisor

E.g -father pays in place of son


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Who Can Demand Performance It is only the promisee or his agent who can

demand performance of the promise undera contract. it is immaterial whether thepromise is for the benefit of some otherperson. In case of death of thepromisee,his legal representatives candemand performance. In some cases athird person who is not party to thecontract can also demand performance

Example-A promise to B to sell his house toC.A doesnt perform the contract .C cantsue A. it is only B who can enforce promiseagainst A


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3. Where time is specified and application has to be

made:

Sometimes the day of the performance is specified inthe contract and the promisor has to perform it only on

the being asked by the promisee.in such cases,the

promisee must make a demand for the performance to

the promisor at proper time and place, and with in usual

hours of business.

Proper time and place is question of fact.

A promised to deliver 100 kg of oil on a fixed date. B

agreed to specify later on place and time for delvery ofoil. In this case it is duty of B to inform A about the

time and place of delivery.


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4. Where no place is specified and no

application is to be made:When no place is

fixed for the performance and the promisorhimself has to perform the contract without

being asked to do so,he must first apply to the

promisee to appoint a reasonable place for the

performance. Thereafter he should perform at

the place so appointed.

e.g A agreed to suppply 100bags of rice to B on

certain day but no palce was fixed fordelivery.in this case,A must ask B foe the place

of delivery,and supply the rice at the place so

decided


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5. Where manner and time of performance is prescribed by the the

promisee.in this case the performance of any promise is made in

any manner,or at any time which the promisee prescribes or

sanctions.

E.g A owned B Rs.500.b desired A to send him a cheque for rupees

5000 by Post.Accordingly A drew a cheque in favour of B and

posted the same to his address.In this case the debt is discharged

as soon as envelope containing the Cheque is posted by A.


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Joint Promises

Where more than one person constitute a single partyto the promise under the contract is considered as ajoint promise. It may take any of the following forms:

Several Joint promisor make a promise with a single

promise e.g. A,B,C Jointly promise to pay rs.9000 toD A single promisor make a promise with several joint

promisees e.g A promises to pay Rs. 9000 to B and Cjointly.

Several Joint Promisors make a promise with several

joint promisees e.g A,B and C jointly promise to payRs 9000 to D and E


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Rights and Liabilities Amongst Joint

Promisors Joint promisors are liable to

contribute equally.

Joint promisors are liable to sharelosses equally.

The Contribution rule doesnt apply toprincipal debtor and surety.

Effect of release of of one of the jointpromisor by the promisee.


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Performance of Reciprocal PromisesPromises which form the

Consideration or part of the

consideration for each other arecalled reciprocal promises

When a party gives a promise inconsideration of others party

promise,Both the promises are calledreciprocal promises.


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Rules Regarding Performance Of Reciprocal Promises

Performance of mutual and concurrent promises:

when a contract consist of reciprocal promises to

be simultaneously performed,no promisor need to

perform his promise.Unless the promisee is ready

and willing to perform his promise.

Thus a promisor is not bound to perform

unless unless the promisee is willingand ready to perform.


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Performance of conditional anddependent promises:whwn a party

who has to perform first fails toperform his part of promise ,not onlythe other party is dischrged fromobligation of his respective

performance,he is also entitled toclaim damages for such nonperformance.


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