Performance of Contract, Discharge of Contract

Performance of a contract is the fulfillment of the terms and conditions agreed upon by the parties to the contract. In India, the performance of a contract is governed by the Indian Contract Act, 1872.

The performance of a contract is the fulfillment of the terms and conditions agreed upon by the parties to the contract. The contract should specify the time and place of performance, and the performance should be made within a reasonable time and at the place where the contract was made. The tender of performance should be made at the time and place specified in the contract. The performance of the contract leads to its discharge, and the breach of contract can lead to remedies for the aggrieved party. The performance of a contract can be subject to conditions and warranties, and a third party can perform the obligations under the contract if the contract allows for it.

The following are the details of the performance of a contract:

1. Types of Performance: The performance of a contract can be of two types – actual performance and attempted performance. Actual performance means that the parties have fully and completely performed their obligations as specified in the contract, while attempted performance means that the parties have made a partial or incomplete performance of their obligations.
2. Time and Place of Performance: The contract should specify the time and place of performance. If the contract does not specify the time and place of performance, the performance should be made within a reasonable time and at the place where the contract was made.
3. Tender of Performance: If a party is ready and willing to perform their obligations under the contract, but the other party refuses to accept the performance, the party can tender the performance. The tender of performance should be made at the time and place specified in the contract.
4. Discharge of Contract: The performance of the contract leads to its discharge. Once the contract is discharged, the parties are relieved of their obligations under the contract.
5. Breach of Contract: If a party fails to perform their obligations under the contract, it is a breach of contract. The aggrieved party can seek remedies for the breach of contract, such as damages, specific performance, rescission, or quantum meruit.
6. Conditions and Warranties: The performance of a contract can be subject to conditions and warranties. Conditions are essential terms of the contract, and the non-performance of a condition can lead to the termination of the contract. Warranties are minor terms of the contract, and the non-performance of a warranty does not lead to the termination of the contract.
7. Performance by Third Party: If the contract allows for the performance by a third party, the third party can perform the obligations under the contract. However, if the contract specifies a particular person to perform the obligations, only that person can perform the obligations.

Legal provisions

The legal provisions related to the performance of a contract are laid down in the Indian Contract Act, 1872. The following are some of the important provisions related to the performance of a contract:

• Section 37: This section provides that the parties to a contract must either perform or offer to perform their respective obligations under the contract. The party who is ready and willing to perform their obligations must make an offer of performance to the other party.
• Section 38: This section deals with the effect of refusal to accept an offer of performance. If the other party refuses to accept the offer of performance without any just cause, the offering party is deemed to have fulfilled their obligation under the contract.
• Section 39: This section provides that if a party to a contract does not perform their obligations on the date fixed for performance, the other party may sue for specific performance or claim damages for breach of contract.
• Section 40: This section deals with the time for performance of reciprocal promises. It provides that where a contract consists of reciprocal promises, each party must perform their promise within a reasonable time after the other party has performed their promise.
• Section 41: This section provides that if a party fails to perform their obligations under the contract, the other party may either terminate the contract or continue with the contract and claim damages for the breach of contract.
• Section 42: This section deals with the discharge of a contract by performance. It provides that a contract is discharged by performance when the parties to the contract have fully and completely performed their respective obligations under the contract.
• Section 43: This section deals with the discharge of a contract by impossibility of performance. It provides that a contract is discharged if it becomes impossible to perform due to reasons beyond the control of the parties, such as natural calamities, death, or destruction of the subject matter of the contract.

Discharge of Contract

Discharge of a contract means the termination of the contractual relationship between the parties. In other words, it means that the obligations of the parties under the contract come to an end. The Indian Contract Act, 1872 lays down the provisions for the discharge of a contract. The following are the ways in which a contract can be discharged:

• Performance: The most common way of discharging a contract is by performance. When both parties have fulfilled their respective obligations under the contract, the contract is said to be discharged by performance.
• Agreement: A contract can also be discharged by mutual agreement between the parties. The agreement can be express or implied. The parties may agree to substitute a new contract in place of the original contract or may agree to waive certain terms of the original contract.
• Breach: A contract can be discharged by breach if one of the parties fails to perform their obligations under the contract. The aggrieved party may choose to terminate the contract and sue for damages.
• Impossibility: A contract can be discharged by impossibility of performance. This may occur when the performance of the contract becomes impossible due to an event that is beyond the control of the parties, such as a natural disaster, death, or destruction of the subject matter of the contract.
• Operation of Law: A contract can be discharged by operation of law. This may occur when a law is passed that renders the contract illegal or void.
• Lapse of Time: A contract may be discharged by the lapse of time. If a contract is not performed within a reasonable time, the parties may be discharged from their obligations under the contract.

Legal provisions

The legal provisions related to the discharge of a contract are provided under the Indian Contract Act, 1872. The Act provides for various ways in which a contract can be discharged. Some of the important legal provisions related to the discharge of a contract are as follows:

• Section 37: This section provides that the parties to a contract must either perform or offer to perform their respective obligations under the contract. The party who is ready and willing to perform their obligations must make an offer of performance to the other party.
• Section 38: This section deals with the effect of refusal to accept an offer of performance. If the other party refuses to accept the offer of performance without any just cause, the offering party is deemed to have fulfilled their obligation under the contract.
• Section 39: This section provides that if a party to a contract does not perform their obligations on the date fixed for performance, the other party may sue for specific performance or claim damages for breach of contract.
• Section 40: This section deals with the time for performance of reciprocal promises. It provides that where a contract consists of reciprocal promises, each party must perform their promise within a reasonable time after the other party has performed their promise.
• Section 41: This section provides that if a party fails to perform their obligations under the contract, the other party may either terminate the contract or continue with the contract and claim damages for the breach of contract.
• Section 56: This section deals with the discharge of a contract by impossibility of performance. It provides that a contract is discharged if it becomes impossible to perform due to reasons beyond the control of the parties, such as natural calamities, death, or destruction of the subject matter of the contract.
• Section 62: This section deals with the discharge of a contract by frustration. It provides that a contract is discharged by frustration if an unforeseen event occurs after the formation of the contract, which makes the performance of the contract impossible or radically different from what was originally intended.