Performance of Contract.ppt

8/10/2019 Performance of Contract.ppt

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Performance of Contracts

Performance of Contract means fulfilling

of their respective legal obligations created

under the contract by both the promisor

and the promisee.

Performance by all the parties of the

respective obligations is the normal and

natural mode of discharging or terminatinga contract.


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Various Rules regarding

performance of contracts

1. Who can demand performance?

It is only the promisee who can demandperformance of the promise under a contract,

for, the general rule is that a person cannotacquire rights under a contract to which he is nota party.

In case of the death of the promisee, his legal

representatives are entitled to enforce theperformance of the contract, against thepromisor.


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Rules-cont

By whom contracts must be performed?

1. by the promisor himself. (Sec 40)

2. By the promisor or his agent. (sec 40-Clause-2)

3. By the legal representative. (Sec 37-

Clause-2)4. Performance by a third party. (sec 41


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Performance of joint promises

Joint Promise:- (i) where several joint promisorsmake a promise with a single promisee, A,B andC jointly promise to pay Rs, 50,000 to D.

(ii) where a single promisor makes a promisewith several jont promisees, P promises to payRs, 30,000 to Q and R jointly.

(iii) where several joint promisors make a

promise with several joint promisees, A, B and Cjointly promise to pay Rs, 5,000 to P, Q and Rjointly.


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Rules regarding performance of

joint promises

Who can demand performance of joint

promises?

(sec 45) provides that when a promise is

made to several persons jointly, the right

to claim the performance rests with all the

promisees jointly (unless otherwise) and a

single promisee cannot demandperformance.


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Rules-cont

By whom joint promises must be performed?(sec 42-44)

1. All promisors must jointly fulfill the promise.

2. Anyone or more of joint promisors may becompelled to perform.(sec-43)

Example:- A, B and C jointly promises to pay Rs,3,000 to D. D may comple either A or B or C orall or any two of them to pay him Rs, 3,000.


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Rules-cont

3. Right of contribution inter-se between jointpromisors.(sec-43, para 2)

Example:

If A is compelled to pay the entire amount ofRs, 3,000, he can realise from B and C

Rs,1,000 each.


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Rules-cont

4. Sharing of loss by default in contribution.

(sec 43)

If A is complled to pay the whole amount of

3,000 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, Rs 500, then Rs, 1250 will bereceived from B.

Sharing of loss by default in contribution


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Rules-cont

5. Effect of release of one joint promisor.

If one of the joint promisors is releasedfrom his liability by the promisee, his

liability to the promisee ceases but this

does not discharge the other joint

promisor from liability. (sec 44)


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Time and Place for Performance

Sec 46 to 50 & 55.

1. Where prescribed by the promisee; the

performance of the contract must be at

the specified time and place.

2. Where not prescribed by the promisee;

a. Within a reasonable time, on a workingday) and within the usual hours of

business.


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Time and Place for Performance

b. At proper place, (a shop or working place

and not at public meeting or a fair).


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Effects of failure to perform a

contract within a stipulated time

1. Where time is of the essence of the

contract: failure to perform within the

fixed time makes the contract void able

at the option of promisee.

2. Where time is not of the essence of the

contract: failure to perform within the

specified time does not make thecontract voidable.


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Effects of failure to perform a

contract within a stipulated time

3. In case of contract void able due to

failure to perform within agreed

time/reasonable time, if promisee

accepts the delayed performance, cantclaim compensation afterwards for the

loss caused by delay, unless giving

notice (promisor) at the time of acceptingperformance.


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Contracts which need not be

performed1. In case of novation, alteration, or rescission,

original contract need not be performed.62

2. In case of remission, original contract standsdischarged.63

3. when aggrieved party cancels the contract,need not perform the promise.64

4. If any promisee neglects or refuses to affordthe promisor reasonable facilities for the

performance of his performance, the promisoris excused for the non-performance of thecontract.67

Performance of Contract.ppt

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