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Performance of Contract
Performance
Performance of contract means the fulfillment of legal obligations under the contract by both parties in the contract.
Rules Regarding Performance of Contracts
Demand Performance
In case of a single promisee, only the promisee can demand performance. A third party can not demand
performance, even if the contract was made for his benefit. However, a third party can demand performance in exceptional cases (beneficiary in case of trust & assignee of contract). In case of death of the promisee, his legal representative can demand performance.
When a promise is made with several persons jointly, all promisees are to demand performance jointly. In case of death of any promisee, legal representative of the deceased along with the surviving promisees is to demand performance.
Performance of Contract
A contract is to be performed by the promisor himself or his agent. In case the performance of
contract involves personal skills, the promisor himself must perform. In case the promisor dies before
performance, and the performance does not involve personal skills of the promisor, his legal representative becomes liable to perform. However, legal representatives are liable to the extent of the
estate of the deceased by them. When the promisee accepts performance from a third person, he can not
enforce it afterwards against the promisor.
Although, the joint promisors are required to perform the promise jointly, but at times the promisee may
compel a single promisor to perform the contract on behalf of all promisors. If any one the joint promisors is compelled the whole promise, every other joint promisor is to contribute equally to the performance of
contract.In case of joint promise, if one of the promisors is released by the promisee, his liability to the promise ceases.
Assignment of Contract
Contracts involving personal skills and qualifications can not be assigned. A promisor can not assign his
liabilities under a contract. This means that the promisee can not compel a third person to perform the promise.
Contractual rights and benefits can not be assigned, if they are of personal nature. An actionable claim
can be assigned by an instrument in writing.
Assignment of contracts may take place by the operation of law in the following circumstances:
- Death
2. Insolvency
Time and Place of Performance
Within a Reasonable Time
Where by a contract, a promisor is to perform his promise without application by the promisee, and no time for performance is fixed, the contract must be performed within a reasonable time.
Within a Specified Time
When a promise is to be performed on a certain day, and the promisor has undertaken to perform without application by the promisee, the promisor may perform it at any time during the usual business hours.
Proper Time and Place
When a promise is to be performed on a certain day and the promisor has not undertaken to perform without application by the promisee, it is the duty of the promisee to apply for performance at a proper place and within the usual hours of business.
Reasonable Place
When a promise is to be performed without application by the promisee and no place has been fixed for the performance of the contract, it is the duty of the promisor to apply to the promisee to appoint a reasonable place for performance of the promise.
Prescribed by the Promisee
The contract is to be performed in the manner, or at any time prescribed by the promisee.
Time is of the Essence of Contract
- When time is of essence of the contract and the promisor fails to perform within the fixed time, the contract becomes voidable at the option of the promisee.
- When time is not of essence of the contract and the promisor fails to perform with in the fixed time, the contract remains valid and the delayed performance has to be accepted. However, the promisee has the right to claim compensation for the loss due to the delayed performance.
- When the promisee accepts the delayed performance instead of avoiding the contract, he cannot afterwards claim compensation for any loss on account of delayed performance.
- It must be of the whole obligation.
- It must give opportunity to inspect the goods.
- It must be made by a person who is able to perform.
- It must be made to the promisee or his agent.
- In case there are several joint promisees, a tender to any one of them would be valid.
- In case of tender of money, exact amount should be tendered.
Effect of Refusal
The contract is deemed to have been performed.
Discharge by Agreement
A contract is discharged by agreements in the following ways:
Novation
Alteration
Rescission
Remission
Waver
Discharge by Subsequent Impossibility of Performance
Factors of subsequent impossibility
1. Destruction of Subject Matter of the Contract
2. Failure of Purpose of the Contract
3. Death or Personal Incapacity
4. Change of Law
5. Declaration of War
Discharge by Lapse of Time
Discharge by Operation of Law
A contract is discharged by operation of law in the following cases:
Insolvency
Merger
Material Alteration
Discharge by Breach of Contract
The breach of contract means the failure of a party to perform the promise. The breach of contract may be:
Actual Breach
Anticipatory Breach
Remedies for Breach of Contract
Breach of Contract
When a party breaks the contract either by refusing to perform or failure to perform satisfactorily, there is a breach of contract. Following remedies are available to the aggrieved party in case of breach of contract:
- Suit for Rescission
- Suit for Damages
- Suit upon Quantum Meruit
- Suit for Specific Performance
- Suit for Rescission
- Suit for Injunction
Suit for Rescission
When the aggrieved party wants to sue the guilty party for damages for breach of contract, he must sue for rescission of the contract. When the court grants rescission, the guilty party is released from his obligations under the contract and becomes entitled to compensation.
Suit for Damages
Damages are the monetary compensation allowed to the aggrieved party for the loss suffered by him on account of breach of contract. Following are the kinds of damages:
- Ordinary Damages
- Special Damages
- Exemplary Damages
