UNIT – NINE

PERFORMANCE OF CONTRACT

Section 37 lays down that the parties to a contract must either perform or offer to perform, their
respective promises, unless such performance is dispensed with or executed.

Attempted performance or tender

When the promisor expresses his willingness to perform the obligation, but the promise refuses to
accept, it is termed as attempted performance or tender.

Essentials of a valid tender.

1. It must be unconditional when it is in accordance with the terms of the contract.

2. It must be made at a proper time and place.
3. It must be made to the proper person.
4. Tender must be whole and not in part.
5. Tender of money should be in current notes or coins.
6. Tender for delivery of goods must be for the quantity and quality as stipulated in the contract.

Who shall perform the contract?.

1. The promisor
2. The agent
3. The legal representative
4. Third parties

Who shall demand performance?.

It is only the promise who can demand the performance of the contract.

Time and place of performance

The contract Act gives guidelines regarding time and place.

1. Where no application is to be made and no time is specified.

2. Where time is specified but no application is to be made.
3. Application for performance on a certain day and at a proper time and place.
4. Place of performance where neither application is required nor a place of performance fixed.
Devolution of joint rights and liabilities

Devolution means passing over from one person to another. When two or more persons make a joint
promise, they are known as joint promisors. The following are the rules regarding joint promisors.

1. Joint performance by all promisors.

When two or more persons have made a joint promise, all of them must jointly fulfill the
promise. If any of the joint promisors dies, his legal representatives will be jointly liable for
performance along with the surviving promisor or promisors.
2. Joint promisors may be compelled to perform
When two or more persons make a joint promise and there is no express contract to the
contrary, the promise may compel any one or more of the joint promisors to perform the whole
of the promise.
3. Right to claim contribution
If any one of the joint promisors is compelled to perform the whole of the promise, he may
require the other joint promisor to contribute equally with himself to the performance of the
promise.
4. Sharing of loss arising from default.
If any one of the joint promisors makes default in the contribution, the remaining joint
promisors must bear the loss arising from such default in equal shares.
5. Release of a joint promisor
A release by the promise of any of the joint promisors does not discharge the other joint
promisors from liability. The released joint promisor continue to be liable to the other joint
promisors.

Appropriation of payments
The following are the rules relating to appropriation of payment.
1. Appropriation by debtor.
Where the debtor makes an express or implied intimation as to the debts to which his
payments must be applied, the creditor must apply the sum to that specific debt.
2. Appropriation by the creditor
Where the debtor does not intimates at the time of payment as to which particular debt the
payment is to be applied, the creditor may apply the payment to any lawful debt.
3. Where the debtor does not intimate and the creditor fails to appropriate.
Where the debtor does not expressly intimate and where the creditor fails to make any
appropriation, the payment shall be applied in discharge of the debts in chronological order.
 Assignment of contracts

The word assignment means transfer. It means transfer of contractual rights or obligations by a party
to the contract to some other person. It may happen either by;

1. Assignment by act of the parties

When a party to a contract voluntarily transfers his obligation or right to another person who is a
stranger to the contract, it can be termed as assignment by act of the parties. It may be either rights or
obligations.

a. Assignment of contractual rights

The rights and benefits under a contract can be assigned unless the contract is personal in
nature.
b. Assignment of contractual obligations
The obligations or liabilities under a contract cannot be assigned except with the consent of the
promise.
2. Assignment by operation of law.
It usually happens in the case of death of a person or due to insolvency.
a. Death
When a party to a contract dies, his rights and liabilities devolve upon his heirs and legal
representatives.
b. Insolvency
In case of insolvency of a person, his rights and liabilities may be transferred to the Official
Receiver appointed by the Court.