When the terms of a contract are fulfilled by the respective parties to the contract, performance of contract takes place.

1. Legal Environment of Business - Module 2 – Part 2
MBA - MG University

2. Prepared By
Manu Melwin Joy
Assistant Professor
Ilahia School of Management Studies
Kerala, India.
Phone – 9744551114
Mail – manu_melwinjoy@yahoo.com
Kindly restrict the use of slides for personal purpose.
Please seek permission to reproduce the same in public forms and presentations.

3. Contents
1. Performance of a contract –Definition.
2. Who may perform the contract?
3. Time of performance.
4. Place of performance.
5. Discharge of contract – Definition.
6. Various modes of discharge.
7. Breach of contract – Definition.
8. Remedies for breach of contract.
9. Different types of damages.
10. Contract of indemnity – Definition.
11. Rights of indemnity holder.
12. Contract of Guarantee – Definition.
13. Essential features of a Contact of Guarantee.
14. Kinds of Guarantee.

4. Performance of a contract -Definition
When the terms of a
contract are fulfilled by the
respective parties to the
contract, performance of
contract takes place.

5. Who may perform the contract?
• The contract may be
performed by three
categories.
– Promisor
– Agent
– Legal representative

6. Time of performance
• Where the time is not fixed
– According to section 46,
where the contract is to be
performed without any
demand by the promise and
where no time for
performance is fixed, then
the contract must be
performed within a
reasonable time.

7. Time of performance
– Where the time is fixed –
According to section 46,
when a promise is to be
performed on a certain day
and the promisor has
undertaken to perform it
without application by the
promise, the promisor may
perform it at any time
during the usual hours of
business on such a day and
at the place at which the
promise ought to be
performed.

8. Place of performance
– Place of performance – If
the contract mentions a
place, the contract must be
performed at the place
mentioned in the contract.
If the place is not
mentioned, the promisor
must ask the promise to fix
a reasonable place to
perform the contract.

9. Discharge of contract - Definition
Discharge of contract
means termination of the
contractual relationship
between the parties.

10. Various modes of discharge
1. By performance of contract.
– Actual Performance.
– Attempted performance.
2. By agreement.
– By Novation.
– By alteration.
– By recession.
– By remission.
– By waver.
– By merger.

11. Various modes of discharge
3. By lapse of time.
4. By operation of law.
– By death.
– By insolvency.
5. By impossibility of performance.
– At the time of contract.
– Subsequent to contract.
6. By breach of contract.

12. Breach of contract - Definition
• When one of the parties of
a contract fails to perform
his part of contract, he is
said to have committed
breach of contract.

13. Remedies for breach of contract
• Rescission of contract
(Cancellation).
• Restitution.
• Suit for specific
performance.
• Suit for Injunction.
• Suit from ‘Quantum
Meruit’.
• Suit for damages.

14. Different types of damages
• General damages
• Special damages
• Vindictive damages
• Nominal damages
• Liquidated damages
• Penalty

15. Contract of indemnity - Definition
• “A contract of indemnity
is a contract by which one
party promises to save
the other from loss
caused to him by the
conduct of the promisor
himself or by the conduct
of any other person.”

16. Rights of indemnity holder
• Damages.
• Costs.
• All sums.
• Suit for special
performance.

17. Contract of Guarantee - Definition
• According to Section 126,
“a contract of Guarantee
is a contract to perform
the promise or to
discharge the liability of a
third person in case of his
default.”

18. Essential features of a Contact of
Guarantee
• Three parties.
• Indemnity of mind.
• Liability of existence.
• Primary and secondary
liability.
• Writing or Oral.
• No misrepresentation or
concealment.

19. Kinds of Guarantee
• Absolute or conditional.
• Retrospective or prospective
• General or specific
• Limited or unlimited

20. 1. Performance of a contract –Definition.
2. Who may perform the contract?
3. Time of performance.
4. Place of performance.
5. Discharge of contract – Definition.
6. Various modes of discharge.
7. Breach of contract – Definition.
8. Remedies for breach of contract.
9. Different types of damages.
10. Contract of indemnity – Definition.
11. Rights of indemnity holder.
12. Contract of Guarantee – Definition.
13. Essential features of a Contact of Guarantee.
14. Kinds of Guarantee.