ASSIGNMENT

Standard of Performance of Contract Mentioned in Contract Act 1872; Modern

Name: Muhammad Ahmad

Roll No. BL5F18M40

LLB 5 Years Session 2018-23

Teacher: Mr. Saif Ullah Hashmi

Last Date of Submission: May 02, 2020

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 Table of Content

1- Performance of Contract

2- The Obligation of Parties to Contract

3- Who can Perform Contract or Person by Whom Promise is to be Performed

 Promisor himself

 Agent on Behalf of Principle:

 Representatives of Promisor:

 Third Persons:

4- The Standard of Performance

5- Effect of Refusal of a Party to Perform Promise Wholly:

6- Specific Performance of a Contract

7- Contracts which need not be performed

8- Time and Place for the Performance

 Time for Performance

9- Performance on Certain Day to be at Proper Time and Place

10- Manner of Performance

11- Promisor Not Bound to Perform, Unless Reciprocal Promisee Ready and Willing to

Perform

 Scope and Applicability

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12- Liability of Party Preventing Event on Which the Contract is to take Effect

13- Effects

 Effect of Novation, Rescission and Alteration of Contract

 Effect of Failure to Perform Contract at Fixed (Essential) Time

 Effect of such Failure When Time is Not Essential

 Effect of Acceptance of Performance at Time Other than that of Agreed Upon

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Performance of Contract:

Generally, an agreement between two parties that creates legal responsibility and is

enforceable by law is a contract. For entering into a contract, there are certain essentials.

 The intention of Legal obligation

 Competency of parties

 The condition should be certain with a legal object

 Agreement between two parties

 Lawful consideration

 Free Consent

 The intention of Legal obligation

The base of a contract is that both the parties have to complete their part of the contract in

order to give effect to it according to the set of terms. Performance of a contract is the

completion of the contractual obligations by the parties. It is one of the way to discharge a

contract. The parties have no more rights and liabilities if once the contract is discharged.

The Obligation of Parties to Contract:

The parties of a contract must to either perform or offer to perform their particular promises

until such performance is dispensed or excused under the provisions of contract Act or of any

other related law. Promises bind the representatives of the promisors in case of the death of

such promisors before the performance, unless a contrary intention appears from the

contract. 

A contract being an agreement enforce by law comprise of mutual promises. So that a party

can enforce the promises made to him, he should perform his promise or offer to perform his

promise and it is after he has so performed or offered to perform, his promise that he could

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ask the other party to complete his promise. Moreover performance and eagerness and

willingness to perform the contract are the basic requirement.

The promisor has to offer to perform his obligation under the contract designed. The offer of

a performance of a contract is known as Tender. If first party does not accept then the other is

not responsible for non-performance nor does he lose his right under the contract. If the party

rejects the tender of performance it entitles other parties to sue for the breach of the

contract. A legal tender must satisfy the below conditions:-

 Its nature must be unconditional where unconditional means that neither should any

extra conditions be attached to the contract nor should any existing condition be change.

The conditions also should stay the same as they were at the time of end of the contract.

 A tender must be made at a right time and place. In most of the cases the place and time

of the tender are set. If time and place of tender not set then the time and place should

be reasonable and appropriate, for example if goods are delivered at odd hours and such

tender is refuse then the promisor will not be discharged from his obligation.

 The offeree must be given a rational opportunity to ascertain the offer. The offeree

should have an appropriate time to ascertain that all the terms and conditions have

complied in the performance of the contract.

Who can Perform Contract or Person by Whom Promise is to be Performed?

 Promisor himself:

If the terms and conditions of the contract plainly indicate that the conditions are as

such that the promisor only can perform them then it can be complete by the promisor

only. This means contracts which involve the utilization of special personal skill and

expertise must be performed by the promisor himself.

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  Agent on Behalf of Principle:

When it is not separately mentioned in the contract that the only promisor bound to complete

the performance, then the agent can perform the contract on behalf of the promisor

(Principle).

 Representatives of Promisor:

 A contract which is involve the use of special personal skills of the promisor or is founded

on individual consideration comes to an end on the death of the promisor. In that condition

due to terms and conditions of the contract the legal representatives of the promisor are

bound to enter into by him until different intention appears from the contract. But the

responsibility of the legal representatives will be limited to the share of the property or wealth

they have inherited from the late promisor. Sometimes the nature of the promise is design by

itself that the promisor has to perform the contract in his personal capacity. This generally

happens in cases where the use of the personal skills of the promisor is involved for instance

contracts of paint, contract of sing, contract of marry and contracts to practical nature. In such

cases, the death of the promisor puts an end to the contract.

 Third Persons:

 In the nature of the performance of a third person, the promisee must agree that when the

contract is being made. If the condition of performance by the third party is accepted then the

promisee cannot reject later. In this case the contract performs will be discharged on the part

of the promisor if it is finished by the decided third party even if the promisor does not ratify

the performance explicitly. Discharge of a contract by the performance of third party can

occur only when it is done with the intention of doing so.

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The Standard of Performance:

The common rule is that the obligation is strict on performance so that the contractual

obligation is accurately and fully performed. Examples of the some strict obligations are the

obligations with regard to description, purpose of fitness, quality of satisfaction etc. The only

exception to this is the rule of de minimis i.e. microscopic deviations only. A legal term

meaning is very tiny to be meaningful or taken into consideration i.e. immaterial. As a matter

of policy the law does not give confidence to parties to take legal actions for technical

breaches of rules where the impact of the breach is negligible.

The term de minimis is taken from a long phrase of Latin which translates into “the law does

not concern itself with trifles.” De minimis exceptions are generally included in contracts to

limit the application of covenants or other limitations so that they do not apply in

circumstances where the failure to observe the restriction has negligible impact. If the de

minimis rule is not appropriate in a particular situation then it constitutes a breach. Courts

benches have applied the de minimis rule often to ignore the small transgressions of the law.

As to what is a case deserve this advantage of the abovementioned rule is a question of truth

to be decided in each case for which no strict and exhaustive law can be laid down. The court

ignores the shortfall and extends the benefit.

The maxim de minimis non curat lex means that the law does not govern trifles, law ignores

unimportant details. Where petty irregularities or even infractions of the strict letter of the

law are brought under the notice of the court, this maxim is of common use. The law allows

the qualification implied in the maxim, where there are irregularities of very small result, the

court does not aim that the imposition of penalties should be rigidly severe. If the variations

were a slight trifle which if, continued in practice, would consider little or nothing on the

common interest, it might appropriately be overlooked.

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Effect of Refusal of a Party to Perform Promise Wholly:

When a party to a contract refused to perform himself from performing of contract, his

promise in its whole, the promisee may put an ending to the contract unless he signify by

conduct or words, his consent in its continuance. [9] If performance is refuse by one of the

parties and does not accomplish his part of the contract then the contract is said to be out of

order and amount to the breach of contract by such party. This is called repudiation.

Repudiation of a contract happen where one party renounces their obligations under a

contract. It can be that they are not willing or not capable to perform their obligations under a

contract. Repudiation is seen to be quite a severe matter and the court requires a clear

indication that a party is not ready or not willing to perform the contract. Because it is always

before an actual breach of a contract. It can be referred to as an anticipatory breach.

Specific Performance of a Contract:

Certain performance is reasonable relief which is given by the court to enforce next to a

defendant and the task of doing what he agreed by contract to do. Thus the remedy of certain

performance is difference with the remedy by way of damages for broken of contract which

gives financial damages for failure to perform the terms of the contract. Damages and certain

performance both are remedies which are given upon breach of obligations by a party to the

contract. The previous is a substitutional remedy and the latter a specific remedy. The remedy

of specific performance is settled by way of exception. The applicant seeking this remedy

must first satisfy the court that the ordinary remedy of damages is insufficient.

Contracts which need not be performed:

 If the parties of a contract agree to replace a new contract for it or to cancel or modify it

then the original contract need not be performed. The process of substituting new

contract on an existing is known as Novation.

 If a rescinded contract is voidable then other party need not perform his part.

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  If the promisee neglects or cancel to afford the promisor rational facilities for the

performance of his promise then the promisor is excused by such neglect or cancelation

as to any non- performance caused thereby.

 Further where the consideration and thing of a contract are not supported by law and

where the performance is unlawful or not legal then the contract need not be performed.

Time and Place for the Performance:

Specific time and place is arranged by the consent of both promisor and promisee for the

performance of contract without doubt.

 Time for Performance:

In every contract a promisor is to perform his/her promise without application by the

promisee and no time for performance is specified the engagement surely be perform

within a reasonable time. Here the question is that, what is Reasonable Time?

Reasonable Time:

The time where the defendant agreed to discharge a debt due by the plaintiff to a third party

and in default to pay to the plaintiff such damages as he might continue and no time was

fixed for the performance of the obligation, it was held that the failure of the defendant to

perform it for a period of three years amounted to breach of the contract as that was a

sufficient and reasonable time for performance.

 Place for Performance:

When promise is to be performed without application by the promisee, and place is not fixed

for the performance of it. It is the duty of the promisor to apply to the promisee to appoint a

reasonable place for the performance of the promise and to perform it at such place.

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The words ‘no place is fixed’ do not exclude any inference the Court may draw as to the

purpose of the parties from the nature and conditions of the contract especially where is to

give money.

Performance on Certain Day to be at Proper Time and Place:

When a promise is to be performed on certain day and promisor has not undertaken to

perform it without application by the promisee to apply for performance at a proper place and

with the usual hours of business.

Manner of Performance:

The performance of any promise may be made on any manner, or at any time which the

promisee prescribes or sanctions.

Promisor Not Bound to Perform, Unless Reciprocal Promisee Ready and Willing to

Perform:

When a contract consists of reciprocal promises to be simultaneously performed and

performance of the promise by the promisor is not needed unless the promisee is ready and

willing to perform his reciprocal promise.

 Scope and Applicability:

Where the promises are reciprocal each party has always the option to perform his part of the

contract but one party cannot insist on the other party to perform his promise without himself

performing what he has agreed to do but where breach of contract is committed by one party

the other party may sue for specific performance without providing his own willingness to

perform his part of the contract.

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Liability of Party Preventing Event on Which the Contract is to take Effect:

If the Contract contains reciprocal promises and one party of the contract trying to stop other

party form the performing of their part of contract then the contract becomes voidable at the

option of the party so prevented and he is entitle to compensation from the other party for any

loss which he may sustain on consequences of the non-performance of the contract. In the

entire contract if due to the defendant’s default the plaintiff could not perform what they had

taken to do then it is the right of the desired party to recover back the money he has paid

under the contract.

Effects:

 Effect of Novation, Rescission and Alteration of Contract:

If the parties of a contract are agree to substitute a new contract from it or to rescind or alter it

then the original contract need not to be performed.

 Effect of Failure to Perform Contract at Fixed (Essential) Time

If a party in any contract promises to do a specific task at or before specific time or certain

thing at or before the specific time and fails to do at or before specific time then the contract

become voidable, at the intention of the promisee, if the intention of the parties was that time

should be of the essence of the contract.

 Effect of such Failure When Time is Not Essential:

If it was not the purpose of the parties that time should be of the essence of the contract then

the contract does not become void by the failure to do such thing at or before the specific

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time but the promisee is entitled to compensation from the promisor for any loss occasioned

to him by such failure.

 Effect of Acceptance of Performance at Time Other than that of Agreed Upon:

If contract is void on account of promisor’s failure to perform his promise at the time agreed

and the promisee accept performance of such promise at any time other than that agreed then

the promisee cannot claim compensation for any lose occasioned by the non-performance of

the promise at the time agreed unless at the time of such acceptance, he give notice to the

promisor of his intention to do.

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References:

[1] Contract Act, 1872.

[2] Mulla The Indian Contract Act, 15th Edition, Anirudh Wadhwa, Lexis Nexis.

[3] Avtar Singh, Contract & Specific Relief, Tenth edition.

[4] ibid              

[5] [1911] 2 K.B. 330

[6] Thomson Reuters, Practical law, https://uk.practicallaw.thomsonreuters.com/1-382-3582?

transitionType=Default&contextData=(sc.Default)&firstPage=true&comp=pluk&bhcp=1

[7] Umesh Chand Gandhi vs. 1st Additional and Sessions Judge and Another, 1994 SCC (1)

747, JT 1993 (6) 553.

[8] Exposition of maxim by Herbert Broom mentioned in the judgment of  Karthyayani

Amma vs. Varkey, LAWS (KER)-1961-1-5.

[9] Section 39 in The Indian Contract Act, 1872.

[10] https://legalvision.com.au/what-is-repudiation-of-a-contract/.

[11] http://www.legalservicesindia.com/article/942/Specific-performance-of-Contracts.html,

specific performance of a contract by sprshprsd.

The End

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