Performance of Contractual Obligations
Section 37. Obligation of parties to contracts.
Both parties to a contract must perform or at least offer to perform their promises.
Performance is only excused if the law or the contract itself provides a reason to do so.
Effect of Death:
If a party to a contract dies before performance, their representatives may have to perform the contract unless the contract shows otherwise.
Illustrations:
(a).
A promises to deliver goods to B on a certain day for Rs. 1,000.
A dies before the delivery date.
Then, A’s representatives must deliver the goods, and B must pay Rs. 1,000 to them.
(b).
A promises to paint a picture for B by a certain day.
A dies before the day.
Result: The contract cannot be enforced either by A’s representatives or by B, because personal skill was required.
Section 38. Effect of refusal to accept offer of performance.
If a promisor offers to perform their promise and the promisee refuses to accept it then:
The promisor is not liable for non-performance.
The promisor does not lose any rights under the contract by making such an offer.
Conditions for a valid offer of performance:
The offer must be unconditional.
The offer must be made at a proper time and place.
The circumstances should give the promisee a reasonable chance to see that the promisor is able and willing to perform fully at that time.
If the offer involves delivering something, the promisee must have a reasonable opportunity to inspect it.
The inspection makes sure that the delivery product offered is exactly what the promisor is obliged to deliver.
Joint Promisees:
An offer to one of several joint promisees is treated legally the same as an offer to all of them.
Illustration:
(a).
A agrees to deliver 100 bales of cotton of a specified quality to B’s warehouse on 1st March 1873.
To make a valid offer of performance, A must bring the cotton to B’s warehouse on the agreed day.
A must give B a reasonable chance to check that the cotton is of the agreed quality.
B must also be able to verify that all 100 bales are delivered as promised.
Section 39. Effect of refusal of party to perform promise wholly.
If a party refuses to perform, or makes it impossible to perform their promise completely, the promisee may terminate the contract.
Exception:
If the promisee indicates, by words or conduct, that they agree to continue the contract despite the default, they cannot terminate it but may claim compensation.
Illustrations:
(a).
A, a singer, agrees with B, a theatre manager, to sing two nights every week for two months, and B promises 100 rupees per night.
On the sixth night, A wilfully does not appear.
Under such circumstances , B can terminate the contract entirely.
(b). In the same scenario
On the sixth night, A wilfully absents herself, but with B’s consent, she sings on the seventh night.
Under such circumstances:
B cannot terminate the contract, because he agreed to continue.
However, B can claim compensation for the loss or damage caused by A’s failure to perform on the sixth night.
Section 40. Person by whom promise is to be performed.
If the nature of the contract shows that the promise must be performed personally by the promisor, then only the promisor can perform it.
In other cases, the promisor or their representatives can employ a competent person to perform the promise.
Illustrations:
(a).
A promises to pay B a sum of money.
Payment can be made personally by A or through someone else.
If A dies before the payment is due, A’s representatives must ensure the payment is made, either personally or through a suitable person.
(b).
A promises to paint a picture for B.
The promise must be performed personally by A.
No one else can perform this promise on A’s behalf, because the contract requires A’s personal skill.
So, Personal performance is required when the skills, ability, or personal qualities of the promisor are essential , otherwise delegation is allowed.
Section 41. Effect of accepting performance from third person.
If the promisee (The person to whom the promise is made) accepts performance from someone other than the promisor, then:
He cannot later enforce the same promise against the original promisor.
Section 42. Devolution of joint liabilities.
When two or more persons make a joint promise, the following applies unless the contract says otherwise:
During their joint lives: All joint promisors are jointly responsible to perform the promise.
After the death of any promisor: The deceased promisor’s representative becomes jointly liable with the surviving promisors.
After the death of the last survivor: The representatives of all the deceased promisors are jointly responsible.
Joint liability passes to representatives in an orderly manner after death, so the promise is still enforceable.
Example:
A, B, and C jointly promise to pay Rs. 30,000 to D.
If A dies, A’s legal heirs must pay together with B and C.
If B dies later, B’s heirs join C and A’s heirs in fulfilling the promise.
Section 43. Any one of joint promisors may be compelled to perform. Each promisor may compel contribution. Sharing of loss by default in contribution.
When two or more persons make a joint promise, the promisee can require any one or more of them to perform the entire promise, unless the contract specifically says otherwise.
If one joint promisor pays more than his share, he can claim contribution from the other joint promisors equally, unless the contract says otherwise.
If a joint promisor fails to contribute, the remaining joint promisors bear the loss equally.
Explanation:
This does not affect a surety’s rights to recover payments from the principal, nor does it give the principal the right to recover payments made by the surety.
Illustrations:
(a).
A, B, and C jointly promise to pay D ₹3,000.
D may compel either A, B, or C to pay the entire ₹3,000.
(b).
A, B, and C jointly promise to pay D ₹3,000.
C pays the full amount. A is insolvent but has assets to pay half his debts.
C can recover ₹500 from A’s estate and ₹1,250 from B.
(c)
A, B, and C are jointly liable to pay D ₹3,000. C cannot pay anything.
A is compelled to pay the full amount.
A can recover ₹1,500 from B.
(d)
A and B are sureties for C in a joint promise to pay D ₹3,000.
C fails to pay. A and B pay the full sum.
A and B can recover the amount paid from C.
Section 44. Effect of release of one joint promisor.
When two or more persons make a joint promise, if the promisee releases one joint promisor, this does not release the other joint promisors.
Similarly, the promisor who is released is not freed from responsibility towards the other joint promisors.
When the promisee releases a promisor, it only affects the promisee’s right against that promisor.
The liability of other joint promisors remains unchanged.
The released promisor still has a duty to their co-promisors.
Example:
(a).
A, B, and C jointly promise to pay D ₹3,000.
D releases A from liability.
B and C are still fully liable to D.
A, although released from D, still owes B and C his share, if any, under their joint responsibility.
Section 45. Devolution of joint rights.
When two or more persons make a joint promise, the right to claim performance of the contract follows this order, unless the contract says otherwise:
During the joint lives of the promisors: The promisee can claim performance from any of the joint promisors.
After the death of one promisor: The promisee can claim performance from the representative of the deceased promisor jointly with the surviving promisor(s).
After the death of the last survivor: The promisee can claim performance from the representatives of all the deceased promisors jointly.
Illustration:
(a).
A borrows ₹5,000 from B and C and promises to repay them jointly on a certain date.
B dies before repayment: B’s representative (executor/administrator) and C together hold the right to claim repayment from A.
C dies later: The representatives of both B and C together can claim repayment from A.
Section 46. Time for performance of promise, when no application is to be made and no time is specified.
When a contract does not mention a specific time for performance, the promisor must perform within a reasonable time.
The promisor is required to act without waiting for a request from the promisee.
What counts as a reasonable time depends on the circumstances of the specific case factors like:
(a) The nature of the promise.
(b) Usual business practices.
(c) Situation of the parties are considered.
Reasonable time is not fixed by law and it is determined factually for each contract.
Example:
(a).
A promises to deliver 100 bags of wheat to B, but the contract does not specify a date.
A must deliver the wheat within a reasonable time, considering transport, availability, and other relevant factors.
Section 47. Time and place for performance of promise, where time is specified and no application to be made.
When a contract specifies a day for performance and the promisor does not need a request from the promisee:
The promisor can perform the promise any time during the usual business hours on that day.
The performance must be made at the place where the promise is to be performed (e.g., the place agreed upon in the contract).
If the promisor tries to perform outside the usual business hours, the promise is not considered performed, even if the day itself is correct.
Illustration:
(a).
A promises to deliver goods to B’s warehouse on 1st January.
A brings the goods after the warehouse is closed and B cannot receive them.
A has not fulfilled the promise, because delivery was outside normal business hours.
Section 48. Application for performance on certain day to be at proper time and place.
When a contract specifies a day for performance and the promisor requires the promisee to make an application to perform:
The promisee must apply for performance at:
A proper place (the location agreed upon in the contract).
Within the usual business hours.
If the promisee does not apply at the proper place or within normal business hours, the promisor is not responsible for non-performance.
Explanation:
What counts as a “proper time and place” depends on the circumstances of each case and it is a question of fact for the situation.
Section 49. Place for performance of promise, where no application to be made and no place fixed for performance.
When a contract requires performance without any application from the promisee and does not fix a place for performance:
The promisor must ask the promisee to appoint a reasonable place for performing the promise.
The promisor must then perform the promise at that appointed place.
It is the promisor’s duty to ensure performance occurs at a reasonable place if none is fixed in the contract.
Illustration:
(a).
A agrees to deliver 1,000 maunds of jute to B on a certain day.
Since no place is mentioned, A must ask B to choose a reasonable location for delivery, and then deliver the jute there.
Section 50. Performance in manner or at time prescribed or sanctioned by promisee.
A promise can be performed in any manner or at any time that the promisee approves or prescribes.
This gives the promisee some flexibility in how the promisor fulfils the obligation.
Illustrations:
(a) Bank transfer:
B owes A ₹2,000. A asks B to pay into A’s account with a bank C.
B orders the bank to transfer the amount. The transfer is successful.
Even if the bank later fails (before A knows), B has already performed the promise properly, so he is not liable.
(b) Mutual debts set-off:
A and B owe each other different amounts. They agree to set off debts.
B pays only the balance due after set-off.
This is considered valid performance of their promises.
(c) Part-payment in goods:
A owes B ₹2,000, and B agrees to accept some of A’s goods instead of money.
Delivering the goods counts as partial payment, reducing the debt.
(d) Postal delivery:
A wants B to send ₹100 via post.
As soon as B posts the note properly addressed to A, the debt is discharged.
