Module 1 - Performanceofcontract

8/9/2019 Module 1 - Performanceofcontract

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Performance of contract


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PERFORMANCE OF CONTRACTSPERFORMANCE OF CONTRACTS

Who must perform?Who must perform? Sec.37: The parties to a contract mustSec.37: The parties to a contract must

either perform or offer to perform theireither perform or offer to perform their

respecti!e promisesrespecti!e promisesun"ess such performance is #ispense# $ith orun"ess such performance is #ispense# $ith ore%cuse# un#er the pro!isions of this Act ore%cuse# un#er the pro!isions of this Act orof an& other "a$.'of an& other "a$.'

Representati!e(s )ia*i"it&:Representati!e(s )ia*i"it&:Promises *in# thePromises *in# the"e+a" representati!e of the #ecease#"e+a" representati!e of the #ecease#promisor.promisor.


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Asho, promises to #e"i!er +oo#s to -a*u on aAsho, promises to #e"i!er +oo#s to -a*u on acertain #a& on pa&ment of Rs.///. Asho, #iescertain #a& on pa&ment of Rs.///. Asho, #ies*efore that #a&. Asho,(s representati!e is*efore that #a&. Asho,(s representati!e is

*oun# to #e"i!er the +oo#s to -a*u $ho in turn*oun# to #e"i!er the +oo#s to -a*u $ho in turnis *oun# to pa& the amount to Asho,(sis *oun# to pa& the amount to Asho,(srepresentati!e.representati!e.

Mr.A promises to paint a picture for Mr.- *& aMr.A promises to paint a picture for Mr.- *& a

certain #a& at a certain price. Mr.A #ies *eforecertain #a& at a certain price. Mr.A #ies *eforethe #a&. The contract cannot *e enforce#the #a&. The contract cannot *e enforce#either *& Mr.A(s representati!e or *& Mr.-.either *& Mr.A(s representati!e or *& Mr.-.


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T&pes of Performance0T&pes of Performance0

Actua" performanceActua" performance Attempte# performance or offer to performAttempte# performance or offer to perform

1ten#er of performance21ten#er of performance2


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hat is Ten#er of Performance0hat is Ten#er of Performance0

4t is a"so ca""e# offer of performance.' 4t is4t is a"so ca""e# offer of performance.' 4t is$hen the parties to a contract offer to$hen the parties to a contract offer toperform their respecti!e promises.perform their respecti!e promises.

Essentia"s of a !a"i# ten#er of performance:Essentia"s of a !a"i# ten#er of performance: 4t must *e uncon#itiona":4t must *e uncon#itiona":5 offers to +i!e his5 offers to +i!e his

house to 6 if permits. Offer is con#itiona"house to 6 if permits. Offer is con#itiona"

hence not a !a"i# ten#er.hence not a !a"i# ten#er. Offer must *e ma#e *& promisor orOffer must *e ma#e *& promisor or

representati!e.representati!e.


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Must *e ma#e at reasona*"e time 8 p"ace.Must *e ma#e at reasona*"e time 8 p"ace. Offer cannot *e of the part of performance.Offer cannot *e of the part of performance.

For e%amp"e a sta,eho"#er not *oun# toFor e%amp"e a sta,eho"#er not *oun# to

accept "ess than $hat is actua""& pa&a*"e.accept "ess than $hat is actua""& pa&a*"e. Promisor is *oun# *& his promise to #e"i!erPromisor is *oun# *& his promise to #e"i!er

the same thin+ an# promisee has opportunit&the same thin+ an# promisee has opportunit&to e%amine the same.to e%amine the same.

4n case of 9oint promises the ten#er is !a"i#.4n case of 9oint promises the ten#er is !a"i#. 4t must *e ma#e to promisee or his #u"&4t must *e ma#e to promisee or his #u"&

authorie# a+ent.authorie# a+ent.


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Summary - Requisites of a valid

tender

It must be unconditional.It must be unconditional. It must be of the whole quantity.It must be of the whole quantity. It must be by a person in a position.It must be by a person in a position.

It must be made at the proper time and place.It must be made at the proper time and place. It must be made to the proper person.It must be made to the proper person. It may be made to one of the several jointIt may be made to one of the several joint

promiseespromisees It must give a reasonable opportunity to theIt must give a reasonable opportunity to the

promisee for inspection of the goods.promisee for inspection of the goods. The debtor must make a valid tender in legalThe debtor must make a valid tender in legal

tender money.tender money.


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Effects of refusal of a party toEffects of refusal of a party to

perform promise whollyperform promise whollyContracts which need not be performed:Contracts which need not be performed: When its performance becomes impossible.When its performance becomes impossible. When the parties to it agree to substitute aWhen the parties to it agree to substitute a

new contract for it or to rescind or alter it.new contract for it or to rescind or alter it. When the promisee dispenses with orWhen the promisee dispenses with or

remits, wholly or in part.remits, wholly or in part. When the person at whose option it isWhen the person at whose option it is

voidable, rescinds it.voidable, rescinds it. When the promisee neglects or refuses toWhen the promisee neglects or refuses to

aordaord..


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By whom must contracts be performed?By whom must contracts be performed?

.. !romisor himself.!romisor himself.

".". #gent#gent

$.$. %egal representatives.%egal representatives.

&.&. Third person.Third person.

'.'. (oint promisors.(oint promisors.


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Devolution of joint liabilitiesDevolution of joint liabilities

#ny of the joint promisors may be#ny of the joint promisors may be

compelled to perform.compelled to perform.

# joint promisor compelled to# joint promisor compelled to

perform may claim contribution.perform may claim contribution.

)haring of loss arising from default.)haring of loss arising from default.

*elease of a joint promisor.*elease of a joint promisor.


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Devolution of joint rihtsDevolution of joint rihts


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!ho can demand performance?!ho can demand performance?


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Time and place of performanceTime and place of performance

Where no application is to be made and noWhere no application is to be made and notime is speci+ed.time is speci+ed.

Where time is speci+ed and no applicationWhere time is speci+ed and no application

is to be made.is to be made. #pplication for a performance on a certain#pplication for a performance on a certain

day and place.day and place. #pplication by the promisor to promisee to#pplication by the promisor to promisee to

appoint place.appoint place. !erformance in manner or at time!erformance in manner or at time

prescribed or sanctioned by the promisee.prescribed or sanctioned by the promisee.


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Reciprocal promisesReciprocal promises

utual - independentutual - independent

onditional - dependentonditional - dependent

utual - concurrentutual - concurrent


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Rules reardin performance ofRules reardin performance of

reciprocal promisesreciprocal promises )imultaneous performance)imultaneous performance

/rder of performance/rder of performance

0ect of one party preventing0ect of one party preventinganotheranother

0ect of default as to promise to be0ect of default as to promise to be

performed +rstperformed +rstTo do things legal and other thingsTo do things legal and other things

illegalillegal


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"ime as the essence of the"ime as the essence of the

contractcontract

When time is of the essence.When time is of the essence.

When time is not of theWhen time is not of the

essence.essence.


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Subsequent noticeSubsequent notice


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#ppropriation of payments#ppropriation of payments

Where the debtor intimates.Where the debtor intimates.

Where the debtor does not intimatesWhere the debtor does not intimates- the circumstances are not- the circumstances are not

indicated.indicated.

Where the debtor does not intimateWhere the debtor does not intimate

- creditor falls to appropriate.- creditor falls to appropriate.


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Assi+nment of ContractsAssi+nment of Contracts

;n#er certain circumstances parties ma&;n#er certain circumstances parties marop out an# *rin+ others in their p"aces.#rop out an# *rin+ others in their p"aces.

To


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"ypes of #ssinment of contracts"ypes of #ssinment of contracts

.. #ct of the parties#ct of the parties

#ssignment of contractual obligations.#ssignment of contractual obligations. ontractual obligations involving personal skills - ability cannot beontractual obligations involving personal skills - ability cannot be

assigned.assigned.

# promisor cannot assign his liabilities or obligation under a contract.# promisor cannot assign his liabilities or obligation under a contract.

#ssignment of contractual rights.#ssignment of contractual rights.1 The rights - the bene+ts under the contract not involving personalThe rights - the bene+ts under the contract not involving personal

skills may be assigned.skills may be assigned.

1

#n actionable claim can always be assigned.#n actionable claim can always be assigned.

".". /peration of law/peration of law 2eath2eath

InsolvencyInsolvency


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E%amp"e = T&pes ofE%amp"e = T&pes ofAssi+nmentAssi+nment

Assignment by act of parties:Assignment by act of parties: 5 o$es 65 o$es 6Rs.///. 5 cannot transfer his "ia*i"it& to aRs.///. 5 cannot transfer his "ia*i"it& to athir# person. >o$e!er if 6 a+rees to acceptthir# person. >o$e!er if 6 a+rees to accept

7 as his #e*tor in p"ace of 5 the "ia*i"it& can7 as his #e*tor in p"ace of 5 the "ia*i"it& canthen *e transferre# from 5 to 7.then *e transferre# from 5 to 7.

Assignment by operation of law:Assignment by operation of law:1i2 ;pon1i2 ;pon #eath#eathof a part& ri+hts 8 "ia*i"ities #e!o"!e upon hisof a part& ri+hts 8 "ia*i"ities #e!o"!e upon hisheirs 8 "e+a" representati!es. 1ii2 ;ponheirs 8 "e+a" representati!es. 1ii2 ;poninso"!enc&inso"!enc& ri+hts an# o*"i+ations pass on to ri+hts an# o*"i+ations pass on toAssi+nee or Officia" Recei!er.Assi+nee or Officia" Recei!er.


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Module 1 - Performanceofcontract

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