MODULE 3:

Sections 36 – 67 and 73-75

3.1 Performance of Contract
3.2 Discharge of contract
3.3 Breach of Contract
3.4 Types of Damages & Remedies for Breach

PERFORMANCE OF​
CONTRACTS [S.37–67]

1.​ CONTRACTS WHICH MUST BE​

PERFORMED (S.37–39)​

2.​ BY WHOM CONTRACTS MUST BE​

PERFORMED (S.40–45)​

3.​ TIME & PLACE OF PERFORMANCE​

(S.46–50)​

4.​ PERFORMANCE OF RECIPROCAL​

PROMISES (S.51–58)​

5.​ APPROPRIATION OF PAYMENTS​

(S.59–61)​

6.​ CONTRACTS WHICH NEED NOT BE​

PERFORMED (S.62–67)

CONTRACTS WHICH MUST BE PERFORMED (S.37–39)

37. Obligations of parties to contract.

Every party to a contract must either perform their promise or offer to perform it.

Exception: You are only excused if the law specifically says you don’t have to perform (e.g., Section
63).
 ●​ Example:A promises to deliver goods to B on a certain day of 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.

If a promisor dies before performing, their legal representatives (heirs/executors)) are bound to fulfill
the promise.

This doesn't apply if the contract shows a "contrary intention" (e.g., a contract involving personal skill
like singing or painting).

●​ Example: If you hire a specific artist to paint a portrait and they die, their son doesn't have to
paint it because it required a specific personal skill.

38. Effect of refusal to accept offer of performance.

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.

Every such offer must fulfil the following conditions-

(1) it must be unconditional;

(2) it must be made at a proper time and place, and under such circumstances that the person to
whom it is made may have a reasonable opportunity of ascertaining that the person by whom it is
been made is able and willing there and then to do the whole of what he is bound by his promise to
do;

(3) if the offer is an offer to deliver anything to the promisee, the promisee must have a reasonable
opportunity of seeing that the thing offered is the thing which the promisor is bound by his promise to
deliver.

An offer to one of several joint promisees has the same legal consequences as an offer to all of them.

Illustration-
A contracts to deliver to B at his warehouse, on the first March, 1873, 100 bales of cotton of a particular
quality. In order to make an offer of performance with the effect stated in this section, A must bring the
cotton to B’s warehouse, on the appointed day, under such circumstances that B may have a
reasonable opportunity of satisfying himself that the thing offered is cotton of the quality contracted
for, and that there are 100 bales.

●​ Definition: A "Tender of Performance" is simply a formal offer to perform the promise.

●​ The Rule: The promisor must make this offer, and the promisee (the receiver) must accept it.

39. Effect of refusal of party to perform promise wholly.

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.

Illustrations-​

(a) A, a singer, enters into 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.

39. Effect of refusal of party to perform promise wholly.

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.

Illustrations-​

(a) A, a singer, enters into 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.
PERFORMANCE OF contracts

40. Person by whom promises is to be performed.

If it appears from the nature of the case that it was the intention of the parties to any contract that any

promise contain in it should be performed by the promisor himself, such promise must be performed

by the promisor.​

In other cases, the promisor or his representative may employ a competent person to perform it.

Illustrations-​

(a) A promises to pay B a sum of money. A may perform this promise, either by personally paying the

money to B, or by causing it to be paid to B by another; and if A dies before the time appointed for

payment, his representatives must perform the promise, or employ some proper person to do so.

(b) A promises to paint a picture of B. A must perform this promise personally.

41. Effect of accepting performance from this person.

When a promisee accepts performance of the promise from a third person, he cannot afterwards

enforce it against the promisor.

JOINT PROMISORS & NATURE OFTHEIR LIABILITY

42. Devolution of joint liabilities.

When two or more person have made a joint promise, then, unless a contrary intention appears

by the contract, all such persons, during their joint lives, and, after the death of any of them, his
representative jointly with the survivor or survivors, and, after the death of the last survivor the

representatives of all jointly, must fulfil the promise.

43. Any one of joint promisors may be compelled to perform.

When two or more persons make a joint promise, the promise may, in the absence of express

agreements to the contrary, compel any one or more of such joint promisors to perform the

whole promise.

Each promisor may compel contribution: Each of two or more joint promisors may compel

every other joint promisor to contribute equally with himself to the performance of the promise,

unless a contrary intention appears from the contract.

Sharing of loss by default in contribution: If any one of two or more joint promisors make

default in such contribution, the remaining joint promisors must bear the loss arising from such

default in equal shares.

Explanation-​

Nothing in this section shall prevent a surety from recovering, from his principal, payments

made by the surety on behalf of the principal, or entitle the principal to recover anything from the

surety on account of payments made by the principal.

Illustrations-​

(a) A, B and C jointly promise to pay D 3, 000 rupees, D may compel either A or B or C to pay him

3,000 rupees.
(b) A, B and C jointly promise to pay D the sum of 3,000 rupees. C is compelled to pay the whole. A

is insolvent, but his assets are sufficient to pay one-half of his debts. C is entitled to receive 500

rupees from A’s estate, and 2,250 rupees from B.

(c) A, B and C are under a joint promise to pay D 3,000 rupees. C is unable to pay anything and A is

compelled to pay the whole. A is entitled to receive 1,500 rupees from B.

(d) A, B and C are under a joint promise to pay D 3,000 rupees. A and B being only sureties for C. C

fails to pay. A and B are compelled to pay the whole sum. They are entitled to recover it from C.

44. Effect of release of one joint promisor.

Where two or more persons have made a joint promise, a release of one of such joint promisors

by the promisee does not discharge the other joint promisor, neither does it free the joint

promisor so released from responsibility to the other joint promisor or joint promisors.

45. Devolution of joint rights.

When a person has made a promise to two or more persons jointly, then unless contrary

intention appears from the contract, the right to claim performance rests, as between him and

them, with them during their joint lives, and, after the death of any one of them, with the

representative of such deceased person jointly with the survivor or survivors, and, after the

death of the last survivor, with the representatives of all jointly.

Illustration-​

A, in consideration of 5,000 rupees lent to him by B and C, promises B and C jointly to repay them
that sum with interest on a day specified. B dies. The right to claim performance rests with B’s

representative jointly with C during C’s life; and, after the death of C, with the representatives of B

and C jointly.

46. Time for performance of promise, where

no application is to be made and no time is
specified.
Where, by the contract, a promisor is to perform his promise without application

by the promisee, and no time for performance is specified, the engagement must

be performed within a reasonable time.

Explanation-​

The question “what is a reasonable time” is, in each particular case, a question of

fact.

47. Time and place for performance of

promise, where time is specified and no
application to be made.
When a promise is to be performed on a certain day, and the promisor has

undertaken to perform it without the application 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.

Illustration-​

A promises to deliver goods at B’s warehouse on first January. On that day A brings

the goods to B’s warehouse, but after the usual hour of closing it, and they are not

received. A has not performed his promise.

48. Application for performance on certain

day to be at proper time and place.
When a promise is to be performed on a certain day, and the promisor has not

undertaken to perform it without application by the promisee, it is the duty of the

promisee to apply for the performance at a proper place within the usual hours of

business.

Explanation-​

The question “what is proper time and place” is, in each particular case, a

question of fact.
49. Place for the performance of promise,
where no application to be made and no place
fixed for performance.
When a promise is to be performed without application by the promisee, and not

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 a place.

Illustration-​

A undertakes to deliver a thousand maunds of jute to B on a fixed day. A must apply

to B to appoint a reasonable place for the purpose of receiving it, and must deliver it

to him at such place.

50. Performance in manner or at time

prescribed or sanctioned by promise.
The performance of any promise may be made in any manner, or at any time

which the promisee prescribes or sanctions.

Illustrations-​

(a) B owes A 2,000 rupees. A desires B to pay the amount to A’s account with C, a
banker. B who also banks with C, orders the amount to be transferred from his

account to A’s credit and this is done by C. Afterwards, and before A knows of the

transfer, C fails. There has been a good payment by B.