2. 3.16 Performance of Contracts
3.17.1 Meaning of Performance
Performance of contract means fulfilling of the terms of the contract by
the respective parties to the contract. The Act lays down "The parties to
a contract must either perform, or offer to perform, their respective
promises, unless performance is dispensed with or excused under the
provisions of this Act, or of any other law". 67 It means that the
performance may be either actual - by fulfilling all obligations by the
parties under the contract or attempted where an offer to perform one's
obligations has been made by the promise, but the performance is not
complete unless the offer of performance is accepted by the promise.
Such offer to perform one's obligation under a contract is called tender.
The second part of the definition lays down that the parties are excused
from performance under the provisions of this Act or any other law. For
example, an insolvent is excused from performing his part of the
contract by law.
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3. Promises bind the legal representatives of .the
promisors in case of death of such promisors before
performance, unless a contrary intention appears
from the contract. The liability of the legal
representative is limited to the extent of the value of
the property inherited from the deceased.
Illustrations
A promises to deliver goods to B on a certain day on
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4. 3.16.2 Who can demand performance
It is only the promisee who can demand performance of the promise.
The general rule is that "a person cannot acquire rights under a
contract to which he is not a party. "68
3.16.3 Who should perform the promise?
a. In case of personal contract by the promisor personally.
b. In case of non-personal contract:
i. By the promisor personally.
ii. By a third person on behalf of the promisor.
iii. In the event of the death of promisor - by his legal representatives.
c) In case of Joint promisor - by the promisors jointly or third person
on behalf of the promisors or their legal representatives.
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5. Breach of Contract
Meaning of Breach of Contract
A breach of contract occurs if any party refuses or fails to perform his
part of the contract or by his act makes it impossible to perform his
obligation under the contract. In case of breach, the aggrieved party (i.e.,
the party not at fault) is relieved from performing his obligation and gets
a right to proceed against the party at fault. As stated earlier [paragraph
3.18.2(f)] a breach of contract may either be anticipatory or actual.
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6. Remedies of Breach of Contract
A remedy is the courses of action which are available to an aggrieved
party for the enforcement of a right under a contract. The various
remedies available are:
Rescission of Contract": Rescission means a right not to perform
obligations.
In case of breach of a contract, the promisee may put an end to the
contract. In such a case, the aggrieved party is discharged from all the
obligations under the contract and is entitled to claim compensation for
the damage which he has sustained because of the non-performance of
the contract.
01/03/12 Damages: Damages are monetaryShilpi
Suit for Course facilitator – Ms. compensation allowed for loss
66
7. I. Ordinary or general or compensatory damages: (i.e., damages
arising naturally from the breach).
II. ii. Special damages: (i.e., damages in contemplation of the parties at
the time of contract).
III. iii. Exemplary, Punitive or Vindictive damages: (i.e., damages which
are in the nature 'of punishment).
IV. iv. Nominal damages: (i.e., awarded only for the namesake).
V. Liquidated damages: Means a sum fixed up in advance, which is a
fair and genuine pre-estimate of the probable loss that is likely to
result from the breach. _
c) Suit for Specific Performance: Means demanding the court's
direction to the defaulting party Ms.carry out the promise according
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8. d) Suit for Injunction: Means demanding court's stay order Injunction
means an order of the court which prohibits a person to do a
particular act. For example: W agreed to sing at L's theatre only
during the contract period. During the contract period, W made
contract with Z to sing at another theatre and refused to perform
the contract with L. It was held that W could be restrained by
injunction from singing for Z.
e) Suit for Quantum meruit: Quantum-meruit means as much as is
earned. In this suit, claim is made to compensate for the work
already done. For. example: C an owner of a magazine engaged P to
write a book to be published by instalments in his magazine. After a
few instaulments were published, the publication of the magazine
was stopped. It was held that P could claim payment for the part
already published.
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