Chapter 7: Performance of Contracts-II-Theory

Question 1

Who can perform the contract?

Answer 1

1. Single promisor.
2. By Third parties.

Question 2

Who can perform the contract?
1. Single promisor.

Answer 2

A contact can be performed by Promisor or his Agent or his Legal Representatives (in case of death of promisor).
However, Agent or Legal Representative cannot perform contract if:
- Contract is of personal nature (e.g. marriage, art-work)
- It was agreed that promisor himself will perform.

Question 3

Who can perform the contract?
2. By third parties.

Answer 3

A third party (i.e. a stranger to the contract) can also perform the contract with the consent of promisee.
If a promisee accepts performance from third party, he cannot demand it from promisor afterwards.

Question 4

What are rules regarding performance of joint promise? (4 Headings)

Answer 4

Following rules apply unless agreed otherwise.
1. Liability to perform joint promise.
2. Liability in case of default.
3. Liability in case of death.
4. Liability in case of release of a joint promisor.

Question 5

What are rules regarding performance of joint promise?
1. Liability to perform joint promise.

Answer 5

Joint promisors are jointly and severally liable to perform the contract.
Even a single promiser can be compelled to perform whole contract.
However, if a joint-promisor pays more than his share, he can claim equal contribution from other promisors.

Question 6

What are rules regarding performance of joint promise?
2. Liability in case of default.

Answer 6

If a joint-promisor defaults, other promisors will bear the loss equally.

Question 7

What are rules regarding performance of joint promise?
3. Liability in case of death.

Answer 7

If a promisor dies, his legal representatives are liable along with other joint promisors.
If all promisors die, their legal representatives are liable.
However, the liability of legal representatives is limited to the amount of estate of the deceased.

Question 8

What are rules regarding performance of joint promise?
4. Liability in case of release of a joint promisor.

Answer 8

If promisee releases a promisor, other joint-promisors are not discharged from their liability.
Moreover, such released person is also liable to contribute to other promisors.

Question 9

What to do if time and place is specified in the contract?

Answer 9

Contract must be performed at the specified time and place.

Question 10

What to do if time is not specified in the contract?

Answer 10

Contract must be performed within a reasonable time on a working day and within the usual hours of business.
The question “what is a reasonable time” is a question of fact depending on each particular case.

Question 11

What to do if place is not specified in the contract?

Answer 11

Promisor must apply (ask) promisee to confirm place of delivery.
Promisee must specify a proper place (e.g. at warehouse or shop, and not at a public place).
The question “what is the proper place” is a question of fact depending on each particular case.

Question 12

What is meaning of Reciprocal promises?

Answer 12

Reciprocal promises mean promises which form consideration for each other.
Every contract has reciprocal promises (except agreements without consideration).

Question 13

What are rules regarding performance (or order of performance) of reciprocal promises? (5 rules)

Answer 13

1. When promises are to be performed simultaneously (mutual and concurrent promises).
2. When the order of performance is expressly fixed by the contract (called mutual and dependent promises).
3. Where the order is not expressly fixed by the contract (called Mutual and Independent promises).
4. Legal and illegal promises.
5. Preventing/neglecting party to perform the promise.

Question 14

What are rules regarding performance (or order of performance) of reciprocal promises?
1. When promises are to be performed simultaneously (mutual and concurrent promises).

Answer 14

Such promises must be performed simultaneously.
A party need not to perform his promise if other party is not ready and willing to perform his promise.

Question 15

What are rules regarding performance (or order of performance) of reciprocal promises?
2. When the order of performance is expressly fixed by the contract (called mutual and dependent promises).

Answer 15

Such promises must be performed in the order specified. A party need not to perform his promise if other party fails to perform his promise.

Question 16

What are rules regarding performance (or order of performance) of reciprocal promises?
3. Where the order is not expressly fixed by the contract (called Mutual and Independent promises).

Answer 16

Such promise must be performed in the order, which the nature of transaction requires.

Question 17

What are rules regarding performance (or order of performance) of reciprocal promises?
4. Legal and illegal promises. (2 Points)

Answer 17

• If there are alternative promises (including legal and illegal), then only legal alternative can be enforced.
• If there are different agreements in a contract (first to do legal and then to do illegal things), then only legal set can be forced.

Question 18

What are rules regarding performance (or order of performance) of reciprocal promises?
5. Preventing/neglecting party to perform the promise.

Answer 18

If one party prevents the other from performing his promise, aggrieved party has following remedies:
- Contract becomes voidable at his option.
- Damages for breach of contract.
- Compensation, for part of work already performed (on the basis of Quantum Meruit).

Question 19

What are consequences of non-performance within prescribed time?

Answer 19

If promisor does not perform the contract within prescribed time, its consequences depend on whether time is essence or not.

Question 20

When is time is an essence of the contract? (3 Points)

Answer 20

1. Parties have agreed so, or
2. When nature of contract requires that contract should be performed within specified time.
3. When non-performance will cause injury to a party.

Question 21

What are consequences of non-performance within prescribed time if time is essence? (2 Points, Long)

Answer 21

If goods/services are not delivered on time, aggrieved party (i.e. promisee) has following remedies:
1. Contract becomes voidable at the option of aggrieved party.
He can either:
(i) Rescind the contract
(ii) Accept late delivery of goods/services.
If accepted, it will be implied ratification.
2. Aggrieved party can claim Damages, provided he gives notice (if goods/services are accepted) at time of acceptance.

Question 22

What are consequences of non-performance within prescribed time if time is NOT essence?

Answer 22

Contract remains valid (unless delay is beyond reasonable time).
However, aggrieved party can claim damages because of delay, provided he gives notice at time of acceptance.