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Core Concept — Obligation to Perform S. 37
🎯Parties must either perform (actual performance) or offer to perform (attempted performance) their promises, unless performance is dispensed with or excused under the Contract Act or any other law.
✔ Actual performance
Promisor performs as per terms and promisee accepts it.Cotton of agreed quality delivered on the day, in business hours; buyer takes delivery.◐ Attempted performance (Tender) S. 38
Promisor offers to perform but promisee does not accept. Also called tender / offer of performance.2
By Whom Must Contracts be Performed?
🧑🔧Promisor himself S. 40
Where the parties intended personal performance (e.g. marry, paint a picture).Legal representatives S. 37
Bound on promisor's death — unless contrary intention or personal nature. Liability limited to value of deceased's estate.Competent person S. 40
In other cases, promisor or his representatives may employ a competent person.Third person S. 41
If promisee accepts performance from a third person, he cannot later enforce it against the promisor.Father repays son's loan → son discharged.3
Joint Promises — Rules
👥Devolution of joint liabilities S. 42
- All alive → all promisors jointly
- One dies → his representatives jointly with survivors
- All die → representatives of all jointly
Joint & several liability S. 43
Promisee may compel any one or more joint promisors to perform the whole promise (unless express agreement to the contrary).Contribution S. 43
Each may compel others to contribute equally. If one defaults in contribution, the rest bear the loss in equal shares.Release of one S. 44
Release of one joint promisor by promisee does not discharge the others, nor free the released one from liability to co-promisors.Devolution of joint rights S. 45
Right to claim belongs to all promisees jointly; on death, to their representatives with survivors. One promisee alone cannot sue.🧮 Worked example
A, B, C jointly owe D Rs. 3,000. C pays all; A insolvent (estate pays ½).Shares Rs. 1,000 each → C gets Rs. 500 from A's estate and Rs. 1,250 from B (B bears half of A's Rs. 500 shortfall).
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Time & Place of Performance
🕰️| Situation | Rule |
|---|---|
| No time specified; no application by promisee needed | Perform within a reasonable time (flag for Independence Day → before that day) |
| Day specified; no application needed S. 47 | Perform on that day during usual hours of business, at the proper place (delivery after business hours = not performed) |
| Day specified; application to be made S. 48 | Promisee must apply for performance at a proper place and within usual business hours |
| No place fixed; no application needed S. 49 | Promisor must apply to promisee to appoint a reasonable place, and perform there |
| Manner/time prescribed by promisee S. 50 | Perform in that manner and time (cheque posted as desired → debt discharged on posting; bank transfer as desired → good payment even if bank later fails) |
⏰ Failure to perform at the fixed time S. 55
Time is of the essence
Contract (or unperformed part) becomes voidable at promisee's option; he may rescind and sue.Birthday cake; books for an exhibition.Time NOT of the essence
Not voidable; promisee must accept but is entitled to compensation for loss.Accepting late performance
Promisee cannot claim compensation unless he gives notice of intention to claim at the time of acceptance.5
Valid Offer of Performance (Tender) S. 38
📦1. Unconditional✖ pay debt only if shares allotted
+
2. Proper time✖ cake 2 days early
+
3. Proper place✖ rent at a wedding
+
4. Able & willing to do the whole✖ instalments for lump sum
+
5. Reasonable chance to inspect goods✖ no inspection time
Joint promisees
An offer to one of several joint promisees has the same legal consequences as an offer to all.Effect of refusal of valid tender
Promisor is not responsible for non-performance and does not lose his rights (compensation, rescission) under the contract.Refusal to perform wholly S. 39
If a party refuses or disables 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, acquiescence in its continuance.Singer absent on 6th night; manager allows her to sing on 7th → cannot end contract, but can claim compensation for 6th night.6
Reciprocal Promises S. 2(f)
🔁Promises which form the consideration or part of the consideration for each other.
Simultaneous S. 51
No promisor need perform unless the promisee is ready and willing to perform his reciprocal promise.Order of performance S. 52
Order fixed by contract; if not fixed, the order the nature of the transaction requires.House built before payment; security given before stock delivered.Preventing performance S. 53
Contract voidable at option of party prevented + compensation for loss.Default of first performer S. 54
Party who must perform first and fails cannot claim the reciprocal promise and must compensate the other.Seller fails next-day delivery → buyer need not pay.Legal + illegal things S. 57
First set (legal) = contract; second set (illegal) = void agreement.House sale valid; extra price if used for gambling void.Alternative promise S. 58
One branch legal, other illegal → only the legal branch can be enforced.Rice or smuggled opium → rice enforceable.7
Appropriation of Payments — Roadmap
💳Applying a payment to a particular debt where a debtor owes several distinct debts to one person. Apply the rules in order:
1. Debtor indicates S. 59
express or implied — if accepted, apply accordingly
➜
express or implied — if accepted, apply accordingly
2. Creditor's choice S. 60
any lawful debt due — even time-barred, but not disputed
➜
any lawful debt due — even time-barred, but not disputed
3. Neither appropriates S. 61
order of time (time-barred or not); equal standing → proportionately
order of time (time-barred or not); equal standing → proportionately
🧮 Proportionate example
Debts: Rs. 150,000 (18 Apr), Rs. 300,000 (18 Apr), Rs. 400,000 (25 Apr). Payment Rs. 90,000 → Rs. 30,000 + Rs. 60,000 to the two 18-April debts (1:2).Interest & principal
General rule: interest (mark-up) first, then principal.Rs. 30,000 paid: Rs. 20,000 interest + Rs. 10,000 principal.Implied intimation: bulk payments equal to fuel invoices + earlier objection to surcharge → payment applies to fuel; a disputed surcharge is not a lawful debt for appropriation.
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Contracts which Need Not be Performed
🛑Novation S. 62
New contract substituted for old; old rights/obligations extinguished (may change parties).Creditor accepts a new debtor with all three agreeing. No novation if the new creditor doesn't assent.Rescission S. 62
Cancellation by mutual agreement.Alteration S. 62
Variation in terms by mutual agreement; parties remain the same.Remission S. 63
Accepting a lesser amount/performance than agreed. Promisee may also dispense with, extend time, or accept any satisfaction.Rs. 2,000 accepted for Rs. 5,000 debt → discharged.Waiver
Unilateral surrender of a legal right — releases the other party's obligation.No reasonable facilities
If promisee neglects/refuses reasonable facilities, promisor is excused for resulting non-performance.Owner doesn't point out places to repair.9
Impossibility of Performance S. 56
🚧Initial impossibility
An agreement to do an act impossible in itself is void (treasure by magic).Supervening impossibility / illegality
Act becomes impossible, or unlawful by an event promisor could not prevent → contract becomes void when it becomes so.✔ Valid grounds
- Destruction of subject matter (music hall fire)
- Death / personal incapacity in personal contracts (singer ill)
- Declaration of war
- State of things forming the basis ceases to exist
- Subsequent law/ban making performance illegal (import ban)
✖ NOT valid excuses
- More difficult, costly or less beneficial; commercially unviable
- Default of a third party relied upon
- Strikes, lockouts, civil disturbances (riots, political unrest)
- Partial impossibility of separable objects (naval review cancelled but fleet sail possible)
Partly impossible / unlawful
Separable parts → lawful/possible part survives (8 of 10 singing nights). Inseparable → whole void (essential machine component; one salary for lawful + unlawful work).Compensation & restoration
Promisor who knew (or should have known) of impossibility/illegality, unknown to promisee, must compensate (already-married man's marriage promise).Advance received under a void agreement/contract must be refunded (sick singer refunds advance; no lost profits).
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Application & Exam Traps
⚠️Creditor releases joint promisor Farhan → Farhan free only towards creditor; still liable to co-promisors for contribution.
Creditor may apply payment to a time-barred debt — not to a disputed debt.
One of two joint promisees sues alone → fails; both must join.
Price rise / higher diesel cost / new custom duty → impossibility → no discharge; liable for breach.
Legal representative of deceased promisor liable fully → only up to inherited estate.
Supplier substitutes Taiwan goods for Singapore → buyer not bound; it is an alteration.
Accepting late delivery silently → no compensation later; give notice at time of acceptance.
Demanding extra price under threat to cancel ≠ coercion (no PPC act); paying it = agreed alteration.
Delivery at 8:30 pm + "sign within 10 minutes" → invalid tender (conditional, no inspection).
Venue access denied by client (reciprocal promise) → voidable at option of the prevented party + compensation.
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Quick Revision Box
⚡2Types: actual & attempted (tender)
5Essentials of valid tender
3Appropriation: debtor → creditor → order of time
4Contract need not be performed (S. 62–63, facilities, impossibility)
- S. 37–41 Obligation & who performs · S. 42–45 Joint promises/rights
- S. 47–50 Time & place · S. 55 Time of essence · S. 38–39 Tender, refusal
- S. 2(f), 51–54, 57–58 Reciprocal promises
- S. 59–61 Appropriation · S. 62–63 Novation, rescission, alteration, remission · S. 56 Impossibility
One-liners: Time essential → voidable; not essential → compensation · Prevented party → voidable + compensation · Costlier ≠ impossible.
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