Thursday, 10 February 2022

Performance of Contracts

                                       Performance of Contracts 

Section 37 of the Indian Contract Act says that “the parties to a contract must either perform or offer to perform, their respective promises” Thus, each party is bound to perform his obligation under the contract, unless the performance is dispensed with or excused under the provisions of the Contract Act, or of any other law. Section 37 of the Indian Contract Act which lays down the obligation to perform proceeds as follows :

S.37. Obligation of parties to contracts. – 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 representative of the promisors in case of the death of such promisors before performance, unless a contrary intention appears from the contract. 

For Instance, ‘A’ promises to deliver some goods to ‘B’ on a certain day on payment of Rs. 1000. A died before that day. A’s representatives are bound to deliver the goods to B, and B is bound to pay Rs. 1000 to A’s representatives.

Obligation of parties to perform

The buyer of property retained some money so as to compel the seller to perform certain obligations, like evicting tenants and handing over vacant possessions. The relevant document revealed the transaction to be a sale with consensus ad idem. The court said that non-payment of a part of the sale consideration could not give a cut at the very root of the contract, since it was a concluded contract. An agreement was signed by the parties and fully acted upon without the need for executing any further documents. The agreement was described as its foot as a preliminary and tentative draft for discussion purpose only. It was held to be a complete agreement entitling the claimant to relief. 

Promises bind representatives

The proviso to the section says that a promise binds the representatives of the promisors in case of his death, unless a contrary intention appears from the contract. The Cuttack High Court came to the conclusion that this principle would apply even if the promisor has left behind no legal heir. The court said : “If the contractor is legal, and enforceable, then even if one of the parties to the contract dies leaving no heir, the persons, who acquired interest over the subject matter of the contract and specific performance can be enforced against such persons.”. However, these legal propositions in no way helped the appellant as she had failed to establish existence of the alleged agreement.  

Clause for Renewal

A contract contained a clause for renewal. The party having the right to do so under the contract invoked the renewal clause. The other party refused to accept the renewal. The supreme court of India said that the best course for the party was to get the right of renewal declared and enforced by a court of Law or to get a declaration that the agreement stood renewed as contemplated by the renewal clause. 

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