These slides include understanding for Performance of contract, Discharge of contract & remedies for Breach of Contract.

1. Performance of Contract
Asst. Prof. Parasmani Jangid
SDJ International College

2. Introduction
• Performance of contract take place when the
parties to the contract fulfill their obligations
arising under the contract within the time and
in the manner prescribed.
• Performance or offer to performance (Sec. 37
says compulsory to perform either of two
unless such performance excused) must be by
promisor.

3. Type of Performance
1. Actual Performance - promise has been
performed
2. Attempted Performance/tender/offer to
perfomance (sec. 38) - promisee is refusing to
accept performance
Sec. 38 (para-1) of ICA,1872
1. The promisor is not responsible for the Non
Performance;
2. The promisor does not lose his rights under the
contract. (Eg. Alpa; Jalpa)

4. Essential of a Valid Tender (sec.38;
para-2)
1. Tender must be unconditional
2. It must give reasonable opportunity for
inspection
3. It must be made at a proper time and place
4. It must be for the whole obligation
5. Tender to one is tender to all
6. Tender must be by a person ready, able and
willing to perform his promise

5. Effects of refusal of party to perform promise
wholly (sec. 39)
In this case promisee may put an end to contract
unless he has signified by word or conduct for
continuing the same contract.
example of hotel manager and singer

6. By whom Contracts must be
Performed
1. Promisor (sec. 40)
2. Agent (sec. 40)
3. Legal Representative (sec. 37)
4. Third Person (sec. 41)
5. Joint Promisors (sec. 42)

7. Devolution of Joint Rights and
Liabilities
• Devolution – legal transfer or delegation.
• Joint Promisors – when two or more person
make a joint promise, unless contrary
intension appears by the contract.
• Sec. 42 Joint promisor will continue to fulfill
their promise during their joint lives and if any
one dies then his representative or if all dies,
then representatives of all jointly fulfill the
promise.

8. Devolution of Joint Liabilities (Sec. 43 & 44)
1. Promisee’s right-can compel any one or of
joint promisors to perform the whole
promise.
2. Equal contribution-each joint promisor may
compel their joint promisor for it.
3. Sharing of loss
4. Release of the Joint Promisor

9. Devolution of Joint Rights (Sec. 45)
1. Right to claim performance is between
promisor and promisee.
2. If promisee dies, then legal representative
has right to claim
3. When all dies then representative of all have
right to claim performance.

10. Time and Place for performance
1. Performance of promise where no time is
specified sec.46
2. Performance of promise where time is
specified sec.47
3. On application by promise for performance
sec. 48
4. Without application by promisee sec. 49
5. Performance in the manner and time
prescribed or sanctioned by promisee sec.50

11. Time as the essence of the contract
• Whether it is present or not in contract,
depends upon:
1. The term of the contract
2. The intention of the parties-which can be
gathered from-surrounding circumstances-
nature of the property-construction of the
contract
3. The object which the parties had in mind in
entering it.

12. Cont……
Sec.55 para I…..
Sec.55 para II…..
Sec.55 para III…..

13. Performance of Reciprocal Promises
Sec 2(f)
“promises which from the consideration or part
of the consideration for each other.”

14. Rules for the performance of
Reciprocal Promises
1. To be simultaneously performed(Sec.51)
2. Order of performance(Sec.52)
3. Effects where a party prevents
performance(Sec.53)
4. Dependent promises(Sec.54)
5. To do certain things legal and also other
things illegal(Sec.57)

15. Appropriation of Payment(Clayton’s
Case)
• Several transaction must be there.
• Money received will 1st be set off against
interest
• Debtor’s right to appropriate(sec. 59)
• Creditor’s right to appropriate(sec. 60)
• Order of appropriation(sec. 61)

16. Assignment of Contracts
• An obligation of party to a contract may be,
personal or impersonal.
1. Personal obligation
2. Impersonal obligation
Contracts can be assigned in 2 ways:
1. Assignment by act of parties- rules
2. Assignment by operation of law- situation

17. Discharge of Contract
Asst. Prof. Parasmani Jangid
SDJ International College

18. Meaning
Discharge- Release from the obligations
Modes of discharge are as under:
1. By performance
2. By mutual consent or agreement
3. By subsequent impossibility
4. By lapse of time
5. By operation of law
6. By breach of contract

19. Discharge By Performance
• Actual Performance (sec.37)
• Attempted Performance (sec. 38)

20. Discharge By mutual agreement or
consent
1. Novation (Sec.62)
2. Alteration (Sec.62)
3. Rescission (Sec.62)
4. Remission (Sec.63)
5. Waiver (Sec.63)
6. Extension of time (Sec.63)

21. Discharge by impossibility of
performance
• Pre-existing impossibility
• Subsequent or supervening impossibility

22. Discharge by Supervening
Impossibility/ Doctrine of Frustration
1. Destruction of Subject matter
2. Physical Impossibility
3. Legal Impossibility
4. Failure of Pre-condition
5. Breakout of war

23. Exceptions to the Doctrine
1. Difficulty of performance
2. Commercial Impossibility
3. Failure of a third party
4. Strikes, Lockouts and Civil Disturbance
5. Partial Impossibility

24. Discharge by Operation of law
Discharge by Lapse of Time
• Death
• Insolvency
• Merger
• Material alteration
• Re-negotiation or negotiation back

25. Discharge by Breach of Contract
1. Actual Breach
2. Anticipatory Breach

26. Remedies for Breach of Contract
Asst. Prof. Parasmani Jangid
SDJ International College

27. Actual Breach of Contract
• During the performance of the contract
• At the time when performance is due

28. Anticipatory Breach of Contract
(sec.39)
“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 by conduct, his
acquiescence (willingness) in its continuance.”

29. Remedies
1. May elect to cancel the contract
2. May not elect to cancel the contract
1. Operative for benefit of both the parties
2. Right of damages lost if some event happens
Measurement of Damages

30. Remedies for Breach of Contract
A contract gives rise to correlative rights and
obligations. Remedies is the means given by
law for the enforcement of a right.
1. Rescission of the contract
2. Suit for damages
3. Suit for specific performance
4. Suit for injunction
5. Suit upon Quantum Meruit

31. Rescission
Sec. 62 If parties agree to rescind the contract,
the original contract need not to perform.
One broke then other may sue him.
Sec. 64 a person or aggrieved party on whose
option contract become voidable rescinds it,
then other party thereto need not to perform.
And thus all benefits will be restored.
Sec. 75 if a person rightfully rescind the contract
he is entitled to compensation for any
damages.

32. Specific Performance
Where damages may not be adequate remedy
for the breach of contract. The court may
direct party in breach to carry out his promise
according to the terms of the contract.

33. Where specific performance is not granted.
1. When monetary compensation is an adequate
remedy
2. Where it is not possible for court to supervise the
performance of the contract
3. When contract is of a personal nature
4. When the contract is inequitable to either party
5. When one of the parties is a minor
6. When the contract is uncertain
7. When the contract is made by a company in
excess of its power as laid down in its MOA.

34. Injunction
• Injunction is an order of a court restricting a
person from doing a particular act which one
had denied from in the contract deed.
• He is doing something which he promised not
to do.

35. Quantum Meruit
• It means as much as merited/earned.
• If any contract partially performed and has
become discharged by the breach, this is the right
is founded on an implied promise by the other
party arising from the acceptance of a benefit by
the party.
• Right to claim quantum Meruit does not arise out
of contract as the right to damages does; it is a
claim on the quasi-contractual obligation which
the law implies in the circumstances.

36. Claim for Quantum Meruit arise in
Cases
1. When a contract is found to be
unenforceable
2. When one party refuses to perform
3. When a contract is divisible
4. When a contract is performed but badly

37. Damages
Damages are the monetary compensation
awarded to the injured party by court for the
loss or injury suffered by him.
The object of this is to put the injured party in
the same position, so far as money can do it,
as if he had not been injured.(in the position
in which he would have been had there been
performance and not breach.)

38. Cont….
Sec.73
When a contract has been broken, the injured/aggrieved
party is entitled to----
1. Damages which arose in usual course of things from
such breach(ordinary damages)
2. Damages which the parties knew to be likely to result
from the breach, when they made contract(special
damages)
3. But compensation is not to be given for any remote or
indirect loss or damages.
4. Compensation for damages arising from breach of a
quasi-contract shall be same as in any other contract.

39. Rules relating to different Types of
Damages
1. Ordinary Damages
2. Remote/Indirect Damages
3. Special Damages
4. Exemplary/Punitive/Vindictive Damages
5. Nominal Damages
6. Damages from Carriers
7. Damages for inconvenience and discomfort
8. Mitigation of Damages

40. Thank You