Introduction to Performance of Contract
Any contractual relationship creates legal obligations. Performance of a contract means the execution of these obligations. According to Section 37 of the Indian Contract Act, “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.”
The offer to perform a contract is known as Tender. A valid tender must satisfy the following conditions:-
- It must be unconditional in nature.
- A tender must be made at a proper time and place.
- The offeree must be given a reasonable opportunity to ascertain the proposal
The Standard of Performance: The general rule is that, the performance obligation is strict, so that the contractual obligation is precisely and completely performed. Some examples of strict obligations are the obligations as to description, fitness for purpose, satisfactory quality etc. The only exception to this is the de minimis rule i.e. only microscopic deviations. If the rule of de minimis is not applicable in a particular situation then it constitutes breach.
Contracts which need not be performed
If the parties to a contract agree to substitute a new contract for it, or to rescind or alter it, the original contract need not be performed. The process to substitute an existing contract by a new contract is known as Novation.
If a voidable contract is rescinded, the other party need not perform his part
If the promise neglects or refuses to afford the promisor reasonable facilities for the performance of his promise, the promisor is excused by such neglect or refusal as to any non performance caused thereby.
Further, where the consideration and object is unlawful and where the performance is unlawful or illegal, the contract need not be performed.
By – Shradha Arora
(Editor @ Legal Bites)