THE INDIAN CONTRACT ACT, 1872: PERFORMANCE OF CONTRACT (CHAPTER IV)

📄 THE INDIAN CONTRACT ACT, 1872: PERFORMANCE OF CONTRACT (CHAPTER IV)

I. OBLIGATION & TENDER OF PERFORMANCE

Sec.	Topic	Objective Principle (Ratio)	Case Law / Note
37	Obligation to Perform	Parties must perform or offer to perform their promises unless dispensed with or excused by law.	The death of the promisor discharges contracts involving personal skill (Sec. 40).
38	Offer of Performance (Tender)	The promisor is discharged if their offer is rejected. Tender must be unconditional, made at the proper time and place, and must allow the promisee a reasonable opportunity to examine the goods/services.	Attempted Performance is legally equivalent to actual performance for discharging the promisor.
39	Refusal to Perform Wholly	If a party wholly refuses to perform or disables themselves, the promisee may rescind the contract.	This is the principle of Anticipatory Breach, allowing the promisee to sue immediately.

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II. PERFORMANCE BY WHOM & JOINT PROMISES

Sec.	Topic	Objective Principle (Ratio)	Case Law / Note
40	Who Must Perform	Must be performed by the promisor only if it involves personal skill. Otherwise, by the agent or legal representative.	Personal contracts are discharged upon the death of the promisor.
41	Acceptance from Third Person	Acceptance of performance from a third party discharges the original promisor from their liability.	An exception to the general rule of liability.
43	Compelling Performance	The promisee can compel any one or more of the joint promisors to perform the whole promise.	The performing joint promisor can then claim contribution from the others.

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III. TIME, RECIPROCAL PROMISES & DISCHARGE BY OPERATION

Sec.	Topic	Objective Principle (Ratio)	Case Law / Note
51	Simultaneous Performance	In reciprocal promises, the promisor need not perform unless the promisee is ready and willing to perform.	Essential for concurrent obligations.
55	Time as Essence	If time is essential, delay makes the contract voidable. If time is non-essential, the promisee can claim compensation but cannot repudiate the contract.	Note: In contracts for immovable property, time is generally not the essence.
56	Doctrine of Frustration	A contract becomes void if the performance becomes impossible or unlawful after the contract is made (Supervening Impossibility).	Case Law: Satyabrata Ghose v. Mugneeram Bangur & Co. (Frustration applies to destruction of the fundamental basis).
62	Novation/Rescission/Alteration	Substitution of a new contract (Novation), cancellation (Rescission), or change in terms (Alteration) discharges the original contract.	Novation requires the consent of all parties, including the new party.
63	Remission/Waiver	The promisee can accept a lesser sum or dispense with performance without new consideration.	This is an exception to the rule of consideration.
65	Restitution	Upon a contract becoming void (e.g., under Sec. 56), the person who received an advantage must restore it or make compensation.	Based on the Principle of Unjust Enrichment.
60	Appropriation of Payments	Clayton's Rule: Where neither party specifies, the payment is applied in the order of time to the debts that are first in time (oldest debt discharged first).	This is the implied rule for running accounts.

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