Performance of contract means fulfilling of their respective legal obligations created under the contract by both the promisor and promisee.

When the contract is duly performed by both the parties, the contract comes to a happy ending and nothing more remains.

By Promisor ---- By Promisor or Agent ---- By Legal Representatives ---- Performance by Third Person ----

• Joint promises may take any of the following shapes–Where several joint promisors make a

promise with a single promisee.• A, B and C jointly promise to pay Rs 3000 to D.– where a single promisor makes a promise

with several promisees.• P promises to pay Rs. 3000 to Q and R jointly.–Where several joint promisors make a

promise with several joint promisees.• A, B and C jointly promise to pay Rs. 3000 to P,

Q and R jointly.

• When a promise is made to several persons jointly, then, unless a contrary intention appears from the contract, the right to claim performance rests with all the promisees jointly and single promisee can not demand performance.

• When any of the promisees dies, the right to claim performance rests with legal representatives of such deceased person jointly with surviving promisees.

• When all the promisees are dead, the right to claim performance rests with legal representatives of all jointly. ----

• It is worth mentioning here that under the terms of the section if the promisor makes payment to one of the several joint promisees, he does not operate as complete discharge of the debt.

• All promisors must jointly fulfill the promise (sec 42):– When two or more persons have made a joint

promise (e.g. signed a promissory note jointly), then all such persons must jointly fulfill the promise.

– When any one of the joint promisors dies, his legal representatives must, jointly with the surviving promisors, fulfill the promise.

– On the death of all the original promisors, the legal representatives of all of them jointly must fulfill the promise

• Any one or more of joint promisors may be compelled to perform:(Sec 43 Para1)

–With two or more persons make a joint promise, the promisee is entitled, to compel any one or more of such joint promisors, to perform whole of promise.

– In other words, according to the section the liability of the joint promisors is ‘joint and several’ as against promisee.• A, B and C jointly promise to pay D Rs. 3000. D

may compel either A or B or C or all or any two of them to pay Rs. 3000.

• Right of contribution inter-se between joint promisors (Sec 43 Para 2):– If one of the several joint promisors is made to perform

the whole contract, he may require equal contribution from other joint promisors.• In the above example if A is compelled to pay the entire

amount of Rs. 3000, he can realize from B and C Rs. 1000 each.

• Sharing of loss by default in contribution (Sec 43 Para 3):– If any of the joint promisors make a default in making

contribution, if any, the remaining joint promisors must bear the loss arising from such default in equal shares. • In the above example if A is compelled to pay the entire

amount and C is unable to pay anything, A is entitled to receive Rs. 1500 from B.

• If Cs estate is able to pay one half of his share, A is entitled to receive Rs. 500 from Cs estate and Rs. 1250 from B.

Effect of release of one joint promisor (Sec 44):

• In case of joint promise if one of the joint promisors is released from his liability by the promisee, his liability to promisee ceases but this does not discharge the other joint promisors from their liability, neither does it free the joint promisor so released from his liability to contribute to other joint promisors.

• Assignment means transfer of contractual rights and liabilities to a third party with or without the concurrence of the other party to the contract.

• Following are the important points as regards to assignment of contract:

– Contracts involving personal skills cannot be assigned.– The obligations (i.e. liabilities) under a contract can not be

assigned except with the concent of the promisee, and when such concent is given it is really a ‘novation’ resulting in substitution of liabilities.

– The rights and benefits under the contract are assignable unless the contract is of personal nature. This is so because it makes no difference to the party bound by that obligation, whether he is called upon to perform in favor of the original party or the assignee. But assignee takes the assignment subject to all equities, if any.

– Assignment by operation of law takes place in case of death. Upon the death of a party, his rights and liabilities under a contract devolve upon heirs and legal representatives (except in case of contract involving personal qualifications.)

Promises which form the consideration for each other are called ‘reciprocal’ or ‘mutual promises.’ • A promises to sell certain goods to B and B

in return promises to pay the price thereof to A . There is an obligation on each party to perform his own promise and to accept performance of other party.

• Mutual & Independent (Sec 52):

– Where each party must perform his promise independently without waiting for the performance or willingness to perform of other.

• Mutual & Dependent (Sec 54):

– Where the performance of the promise by one party demands on the prior performance of the promise by the other party.

– Further if the first who needs to perform fails to fulfill his promise he 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 non performance of the contract.

Mutual & Concurrent (Sec 51):

• Where the two promises are to be performed simultaneously .

• In case of such promises the promisor need not perform his promise unless the promisee is ready and willing to perform his reciprocal promise.

Where prescribed by the promisee:• Where the time and place are prescribed by the

promisee, the performance of the contract must be at the specified time and place.

Where not prescribed by the promisee:• With in reasonable time:

On a working day and within usual hours of business.(Sec 47)

• At a proper place: At godown or shop, and not at a public meeting or

a fair. Generally speaking the promisor must ask the

promisee where he would like the contract to be performed, and to perform it at such place. (Sec 49)

Where time is essence of contract and there is failure to perform within fixed time, the contract (or so much of it as remains unperformed) becomes voidable at the option of the promisee. He may rescind the contract and sue for breach.

Where time is not the essence of contract, failure to perform within a specified time does not make the contract voidable. It means that in such a case the promisee cannot rescind the contract and he will have to accept the delayed contract. But, he will be entitled to claim compensation from he promisor for any loss caused to him by delay.

• This rule is however subject to condition that the promisor should not delay the performance beyond the reasonable time, otherwise the contract will become voidable at the option of promisee.

In case of contract voidable on account of the promisors failure to perform his promise with in the agreed time or within the reasonable time, as the case may be, if the promisee instead of rescinding the contract, accepts the delayed performance, he cannot afterwards claim compensation for any loss caused by the delay, unless at the time of accepting the delayed performance, he gives notice to the promisor of his intention to do so.

When the debtor who owes several debts to the same creditor, makes a payment, which is insufficient to satisfy the whole indebtedness, the question arises as to which of the debts the payment is to be applied.

Section 59-61 answer this question and lay down following rules:

• Debtor’s express intention must be followed.• Debtor’s implied intention must be followed.• Appropriation by creditor• Appropriation by law• When principal and interest both due

The circumstances in which contracts need not be performed are as follows:• If parties to the contract agree to Novation,

Rescission or Alteration, the contract needs not be performed(sec62). In such cases the original the original contract disappears and is substituted by a new contract.

• If the parties to the contract agree to dispense with or remit performance of promise either wholly or in part, the original contract stands discharged (sec 63). This is technically called Remission.

• When at whose option the contract is voidable rescinds it, the other party there to need perform his promise. (sec 64).

• If any promisee neglects or refuses to afford the promisor reasonable facilities for the performance of his promise, the promisor is excused for the non performance of contract (Sec 67).

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.

Section 38 sums up in this regard as “Where the promisor has made an offer of performance to promisee, and the offer has not been accepted, the promisor is not responsible for non-performance, nor does he lose his right under the contract.

Thus a tender of performance is equivalent to actual performance. It excuses the promisor from further performance and entitles him to sue the promisee for the breach of contract.