A contract is a legally enforceable agreement that establishes, defines, and governs the mutual rights and obligations of its parties.
If an agreement fits the following characteristics, it is considered a contract:
- Consent should be freely given.
- The parties must be able to enter into a contract legally.
- The importance of following the law should not be overlooked.
- It is necessary to have legal objects present.
A contract typically entails the delivery of products, services, or money, or the promise to do so in the future.
Performance Of Contract
The legal definition of “Performance” is the performance of a party’s obligations to the other party as a result of the contract they have entered into. A contract creates a legal obligation on the contracting parties to fulfil their mutual duties, which lasts until the contract is terminated. The most natural and usual manner of cancelling a contract is to perform it. A person who fulfils the conditions of a contract is relieved of further responsibilities. In most situations, such a performance entitles him to the performance of the opposing party as well. The contract is considered terminated when the contract’s performance meets the contractual obligations.
The term “Performance of Contract” refers to both the promisor and the promisee carrying out their contractual responsibilities. Unless the contract indicates otherwise, promises bind the promisor’s representatives in the event of the latter’s death before the performance, according to Section 27 of the Indian Contract Act. This means that each contracting party must fulfil or offer to fulfil its promise.
Section 37 of the Indian Contract Act,1872 & Types of Performance of Contract
Performance is discussed in Section 37 of the Contract Act. Section 37 of the Indian Contract Act is:
Obligation of parties to contract. —The parties to a contract must either perform, or offer to perform, their respective promises, unless such performance is dispensed with or excused under the provisions of this Act, or of any other law. Promises bind the representatives of the promisors in case of the death of such promisors before performance, unless a contrary intention appears from the contract. Illustrations:
(a) A promises to deliver goods to B on a certain day on payment of Rs.1,000. A dies before that day. A’s representatives are bound to deliver the goods to B, and B is bound to pay the Rs. 1,000 to A’s representatives.
(b) A promises to paint a picture for B by a certain day, at a certain price. A dies before the day. The contract cannot be enforced either by A’s representatives or by B.
Hence, there are two sorts of performance, according to the Section:
- Actual performance: Actual performance of a contract means that a person has completed the liability or duty that he or she agreed to complete and that there is no more work that he or she is obligated to complete under the promise. He is thought to have maintained his word and delivered on his promise.
- Attempted performance: When performance is about to be due, it is called an attempted performance. Because the promisee prevents the promisor from fulfilling his obligation or performing his duty, he is unable to do so. A circumstance in which the promisor intended to fulfil his commitment or discharge his duty but was unable to do so due to an intervening disability is known as an attempted performance of a promise.
Levels of Performance of Contract
There are three levels of Performance:
- Complete Performance of a Contract: When a party completely performs a contract, it means that the contracting party has met all of the contract’s criteria. A fully performing party has the right to expect the same from the other.
- Substantial Performance of a Contract: Substantial performance of a contract means that it isn’t perfect, but it’s good enough to avoid a breach of contract lawsuit. In further detail, it means that a party has completed all material components of the contract but has not completed non-material aspects.
- Breach of a Contract: Any performance that isn’t complete or substantial is considered a material breach. This entails a degree of performance that falls short of what is acceptable. The party who materially breaches the agreement is liable for damages to the other party and cannot sue for performance.
By whom should the contract be performed?
- Promisor: A contract has at least two parties: a promisor and a promisee. A promisee is a person or entity to whom a promise is made, while a promisor is a person or entity who fulfils the promise. If something in the contract indicates that the parties intended for the promise to be fulfilled by the promisor himself, that promise must be fulfilled by the promisor himself. This indicates that contracts that require the use of personal skill or diligence, or those are based on personal trust between the parties, must be carried out by the promisor himself.
- Agent: In legal terms, an Agent is a person who has been given legal authority to act on behalf of another person or organisation. Where the contract does not require personal consideration, the promisor or his representative may choose a competent person/Agent to carry it out.
- Legal Representatives: Legal representatives are individuals or heirs who hold assets but do not own them, such as an executor or administrator of an estate or a court-appointed guardian of a minor or incompetent person. A legal representative is a person who assumes the role of another person and represents their interests. A person who is in charge of another individual’s legal affairs. All of these people are covered by the legal representatives’ expression. When the promisor dies, a contract involving the exercise of personal talent or based on personal considerations comes to an end. Unless the contract expressly states otherwise, the legal representatives of the deceased promisor are obligated to perform any other contract. However, their contractual liability is limited.
- Third Person: A third party is someone who has the legal right to sue under a contract even if they are neither a party to it nor a signer of it. When a promisee accepts the performance of a promise by a third party, he cannot later enforce it against the promisor.
- Joint Promisors: Joint Promisors are those who have more than one promisor. If a promisor makes a joint promise unless the contract expressly states otherwise, all such persons must jointly fulfil the promise; if one of them dies, his legal representatives must jointly fulfil the promise with the surviving promisor. If they all die, their legal representatives must carry out the agreement as a group. “If any promisee neglects or refuses to provide adequate facilities for the fulfilment of the promise to the promisor, the promisor is excused for non-performance,” according to Section 67.
I would like to conclude by summarizing the whole article. Sections 40, 41, and 42 of the Indian Contract Act,1872 deal with “By whom should contract be performed?”
- Section 40: If the nature of a contract reveals that any of the parties intended that the contract’s promise be fulfilled by the promisor himself, the promisor is bound to do so. Otherwise, the promisor, his representatives, or an employed agent may carry out the pledge. If the promisor, his representatives, or his agent cannot delegate the execution of the promise, the promisor, his representatives, or his agent can perform the promise, depending on the nature of the contract.
- Section 41: If a promisee accepts the fulfilment of a promise from a third party, the promisee cannot later enforce it against the promisor. As a result, even if the promisor has not allowed the third party to perform the promise, the promisor is relieved of his responsibilities when the promise is fulfilled.
- Section 42: Unless the contract expressly states otherwise, the Joint Promisors are jointly obligated to fulfil the commitment. Furthermore, if any of the promisors dies, their legal representatives must jointly fulfil the pledge with the remaining promisors. If all of the promisors die, the promise must be fulfilled jointly by their legal representatives.
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