This document discusses various aspects of performance of contracts under Indian contract law. It defines actual performance as both parties fulfilling their obligations under the contract, while attempted performance or tender refers to the promisor offering to perform but the promisee refusing acceptance. It also discusses rules around tender, who can demand performance, devolution of joint rights, performance of reciprocal promises, and consequences of default or prevention of performance.

1. PERFORMANCE OF CONTRACT BY:-
RASHMI DUBEY

2. 1. ACTUAL PERFORMANCE
• When both the parties to the contract fulfills their obligations as per the
contract, the promise is said to be actually performed. Actual performance
gives a discharge to the contract and the liability of the promisor ceases to
exist.
• For example, P agrees to deliver 100 sacks of Mangoes to Q and Q
promises to pay the price on delivery. P delivers the Mangoes on the due
date and Q thereby makes the payment. This is called actual performance
of contract.

3. 2. ATTEMPTED PERFORMANCE/TENDER
• Sometimes it so happens that the promisor offers to perform his obligation
under the contract at the proper time and place but the promisee does not
accept the performance. This is known as “attempted performance” or
“tender”.
• If goods are tendered by the seller but refused by the buyer, the seller is
discharged from further liability, given that the goods are in accordance
with the contract as to quantity and quality, and he may sue the buyer for
breach of contract if he so desires. The rationale being that when a person
offers to perform, he is ready, willing and capable to perform. Therefore, a
tender of performance is at par to actual performance, and it gives the
promisor freedom from further performance of contract and moreover
authorizes the promisor to bring action against the promisee for the
breach.

4. • 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.
• For example, A contracts to deliver to B, 100 tons of basmati rice at his
warehouse, on 6 December 2015. A takes the goods to B’s place on the due
date during business hours, but B, without assigning any good reason,
refuses to take the delivery. Here, A has performed what he was required to
perform under the contract. It is a case of attempted performance and A is
not responsible for non-performance of B, nor does he thereby lose his
rights under the contract.’

5.  It must be unconditional
 It must be made at proper time and place
 A person to whom the tender is made must be given opportunity of
inspection of goods or articles
 The tender must be whole and not of the part
 The tender must be in proper form – tender of money in current coins
 The tender must be made to proper person
 Tender for the delivery of goods must be for the quantity and quality as
stipulated in the contract
 A tender made to one of the several joint promisees has the same legal
consequences as a tender to all of them

6.  When a party to a contract has refused to perform, or disabled himself from
performing, his promise in its entirety, the promisee may put an end to the
contract, unless he has signified, by words or conduct, his acquiescence in
its continuance
 Illustration:- (a) A, a singer, enters into a contract with B, the manager of a
theatre, to sing at his theatre two nights in every week during next two
months, and B engages to pay her 100 rupees for each night’s performance.
On the sixth night A wilfully absents herself from the theatre. B is at liberty
to put an end to the contract. (b) A, a singer, enters into a contract with B,
the manager of a theatre, to sing at his theatre two nights in every week
during next two months, and B engages to pay her at the rate of 100 rupees
for each night. On the sixth night A wilfully absents herself. With the
assent of B, A sings on the seventh night. B has signified his acquiescence
in the continuance of the contract, and cannot now put an end to it, but is
entitled to compensation for the damage sustained by him through A’s
failure to sing on the sixth night.

7.  A contract need not be performed –
1. When its performance becomes impossible(Section 56)
2. When the parties to it agree to substitute a new contract for it or to rescind
or alter it.(Section 62)
3.When the promisee dispenses with or remits, wholly or in part, the
performance of the promise made to him or extends the time for such
performance or accepts any satisfaction for it.(Section 63)
4.When the person at whose option it is voidable, rescinds it(Section 64)
5. When the promisee neglects or refuses to afford the promisor reasonable
facilities for the performance of his promise.(Section 67)
6. When it is illegal.

8. 1. Promisor Himself :- In the case of a contract involving personal skill, taste
or diligence of the promisor, e.g., a contract to paint a picture, a contract of
agency or service; the promisor must himself fulfill the contract. Section 40
states thus, "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 fulfill
by the promisor himself, such promise must be performed by the promisor.”
(Section 40)
Illustration:- A promises to paint a picture for B. A must fulfill this promise
personally.
2. Agent:- When the contract is of impersonal nature i.e., personal
consideration is not the foundation of a contract, a competent person can be
employed to perform it. [Section 40(2)]
Illustration:- A promises to pay B a sum of money. A may fulfill this
promise, either by personally paying the money to B or by causing it to be
paid to B by another

9. 3. Legal Representative:- In case of the death of the promisor before
performance, the liability of performance falls on his legal representatives,
unless a contrary intention appears from the contract [Section 37 ]. But, the
contracts involving personal skill comes to an end on the death of the
promisor on the basis of the rule of law : “ actio personalis moritur cum
persona, i.e., a personal action dies with person”.
Illustrations:
(a) A promises to paint a picture for B by a certain day at a certain price. A
dies before the day.
The contract cannot be enforced either by A's representatives or by B.
(b) A promises to deliver goods to B on a certain day on payment of Rs.
1,000. A dies before that day. A's representatives are bound to deliver the
goods to B, and B is bound to pay the Rs. 1,000 to A's representatives.

10. 4. Third Person:- If a promisee accepts performance of the promise from a
third person, he cannot afterwards enforce it against the promisor.(Section
41).
Illustration:- A wanted to sell his property to B. So, A & B both entered into
the contract for sale of property. A suddenly fall ill and therefore through
power of attorney authorized his elder brother ‘E’ to perform the contract on
A’s behalf. ‘B’ thus afterward cannot enforce it against the promisor.
5. Joint Promisors:- When two or more persons makes a joint promise to
promisee, all joint promisors are bound to perform the contract.
Illustration:- A, B & C jointly enters into the contract with E for the sale of
their jointly purchased property. Here, A,B & C are equally liable for the
performance of contract.

11.  It is only the promisee who can demand for performance of the contract.
This makes no difference that whether the performance demanded is for the
benefit of the promisee or for the third person.
 In case of death of the promisee before the performance, his legal
representative can move ahead with the demand.
 Illustration:- A promises B to pay C a sum of Rs.10,000/-. A does not pay
the amount to C. C cannot take action against A as it is only B who can
enforce the promise against A.

12. 1. Performance of the promise within a reasonable time:- As per the
Section 46 of Contract Act, where the time for performance is not specified in
the contract and the promissory himself has to perform the promise without
being asked for by the promisee, the contract must be performed within a
reasonable time. The question of reasonable time, in each particular case, is a
question of fact.
2. Performance of promise where time is specified:- Section 47 says that
when a promise is to be performed on a certain day and the promissory has
undertaken to perform it without any demand 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.
3. Performance of promise on an application by the promise:- It may also
happen that the day for the performance of the promise is specified in the
contract but the promisor has not undertaken to perform it without application
or demand by the promisee. In such cases, the promisee must apply for

13. performance at a proper place and within the usual hours of business.
4. Performance of promise where no place is specified and also no
application is to be made by promise:- Section 49 of the contract act says
that when 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 place.
5. Performance of promise in the manner and time or sanctioned by
promise:- Sometimes the promisee himself prescribes the manner and the
time of performance. In such cases, the promise must be performed in the
manner and at the time prescribed by the promisee. The promisor shall be
discharged from his liability if he performed the promise in the manner and
time prescribed by the promisee.

14.  “Time as the essence of the contract” means the performance of the
promise by a party to the contract shall be within the specified time or
within the reasonable time.
 Section 55 deals with “Time as the essence of the contract”-
1. When time is of the essence – In a contract where time is as the essence
of the contract and if there is failure in performance of the obligation
within the specified time then the contract becomes voidable at the
option of the promisee. If the promisee accepts the performance of
contract after the specified time then in such case promisee is not entitled
to claim compensation for any loss suffered due to non-performance of
contract on time.
 IN COMMERCIAL OR MERCANTILE CONTRACTS, which
provides for performance within the specified time, here time is ordinarily
of the essence of the contract as businessmen wants certainty in respect of
business.

15. 2) When time is not of the essence:- In a contract, where time is not of
essence of the contract, it do not makes the contract voidable rather the
promisee is entitled to claim compensation for any loss suffered due to non-
performance of the contract at specified time.
 Intention to make time as the essence of the contract, if expressed in
writing, it must be unambiguous and without any mistake.
 In cases other than COMMERCIAL OR MERCANTILE CONTRACTS,
the presumption is that the time is not of the essence of the contract.
 Illustration:- In a contract of sale of immovable property time is not of the
essence unless it is shown that the intention of the parties was that the time
should be the essence of the contract.

16.  “Devolution” means passing over from one person to another.
 When two or more persons have made a joint promise, then unless a
contrary intention appears by the contract, all such persons, during their
lives and after the death of any of them, their representatives jointly with
the survivor or survivors, and after the death of the last survivor, the
representatives of all jointly, must fulfill the promise.
 Illustration:- A, B & C jointly took loan from D. If, ‘A’ dies then his
representative will perform the promise jointly with B & C. Further in case
of death of all, the legal representatives of all of them jointly needs to
perform the promise.

17.  When a person has made a promise to two or more persons jointly, the rule
is called devolution of joint rights.
 Section 45 lays down:-
1. All the promisees must jointly claim the performance.
2. If, any one of them dies then his representative shall claim performance
jointly with the surviving promisees.
3. Further in case of death of all, the legal representatives of all of them
jointly needs to claim the performance of the promise.
 Illustration:- A & B jointly gives loan of Rs.5,000/- to C. C promises A &
B jointly to repay back the amount. B dies, here, legal representative of B
jointly with the survivor A can claim for the performance of the promise
from C.

18.  Promises which form the consideration or part of the consideration for each
other, are called reciprocal promises – Section 2(f).
 Rules regarding the performance of the Reciprocal Promises :-
(Section 51-54 & 57) :-
1. Section 51- Promisor not bound to perform, unless reciprocal
promisee ready and willing to perform.—When a contract consists of
reciprocal promises to be simultaneously performed, no promisor need
perform his promise unless the promisee is ready and willing to perform
his reciprocal promise.
Illustrations
(a) A and B contract that A shall deliver goods to B to be paid for by B on
delivery. A need not deliver the goods, unless B is ready and willing to pay
for the goods on delivery. Moreover, B need not pay for the goods, unless A
is ready and willing to deliver them on payment.

19. 2. Section 52:- Order of performance of reciprocal promises.—Where the
order in which reciprocal promises are to be performed is expressly fixed by
the contract, they shall be performed in that order; and where the order is not
expressly fixed by the contract, they shall be performed in that order which
the nature of the transaction requires.
Illustrations:-
(a) A and B contract that A shall build a house for B at a fixed price. A’s
promise to build the house must be performed before B’s promise to pay for
it.

20. 3) Section 53:- Liability of party preventing event on which the contract
is to take effect.—When a contract contains reciprocal promises, and one
party to the contract prevents the other from performing his promise, the
contract becomes voidable at the option of the party so prevented: and he is
entitled to compensation from the other party for any loss which he may
sustain in consequence of the non-performance of the contract.
Illustration:- A and B contract that B shall execute certain work for A for a
thousand rupees. B is ready and willing to execute the work accordingly, but
A prevents him from doing so. The contract is voidable at the option of B;
and, if he elects to rescind it, he is entitled to recover from A compensation
for any loss which he has incurred by its non-performance.

21. 4) Section 54:- Effect of default as to that promise which should be
performed, in contract consisting of reciprocal promises.—When a
contract consists of reciprocal promises, such that one of them cannot be
performed, or that its performance cannot be claimed till the other has been
performed, and the promisor of the promise last mentioned fails to perform it,
such promisor cannot claim the performance of the reciprocal promise, and
must make compensation to the other party to the contract for any loss which
such other party may sustain by the non-performance of the contract.
Illustrations :- A promises B to sell him one hundred bales of merchandise,
to be delivered next day, and B promises A to pay for them within a month. A
does not deliver according to his promise. B’s promise to pay need not be
performed, and A must make compensation.

22. 5) Section 57:- Reciprocal promise to do things legal, and also other
things illegal -Where persons reciprocally promise, firstly to do certain
things which are legal, and secondly, under specified circumstances, to do
certain other things which are illegal, the first set of promises is a contract,
but the second is a void agreement.
Illustration:- A and B agree that A shall sell B a house for 10,000 rupees, but
that, if B uses it as a gambling house, he shall pay A 50,000 rupees for it. A
and B agree that A shall sell B a house for 10,000 rupees, but that, if B uses it
as a gambling house, he shall pay A 50,000 rupees for it." The first set of
reciprocal promises, namely, to sell the house and to pay 10,000 rupees for it,
is a contract. The first set of reciprocal promises, namely, to sell the house
and to pay 10,000 rupees for it, is a contract." The second set is for an
unlawful object, namely, that B may use the house as a gambling house, and
is a void agreement. The second set is for an unlawful object, namely, that B
may use the house as a gambling house, and is a void agreement."

23.  Assignment of the contract means transfer of contractual rights and
liabilities under the contract to a third party. It may take place by:-
1. Act of the parties:- This is subject to the following rules:-
(1) Contracts involving personal skill or ability or other personal
qualifications cannot be assigned.
(2) A promisor cannot assign his liabilities or obligations under a contract.
(3) The rights and benefits under a contract may be assigned.
(4) An actionable claim can always be assigned but the assignment to be
complete and effectual must be effected by an instrument in writing. Notice
of such assignment must also be given to the debtor.
2. Operation of Law:- This takes place in case of death or insolvency of a
party to the contract.

24.  Finch v/s. Miller
 Startup v/s. Macdonald
 New Indian Motors(Pvt.) Ltd. v/s. Smt. S.P.Duggal
 Indira Kaur v/s. Sheo Lal Kapoor

25. THANK YOU