Note on Performance of contract

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Performance of the contract

The performance of the contract means the fulfillment of respective promises by the concern parties as mentioned in the contract. As we already mentioned the possibility of performance is one of the essential elements of a valid contract, an agreement must be capable of being performed. Since the contract is created between two parties, they have certain liabilities to perform their respective promises on time. If respective parties fulfill such respective promises, it is called performance of the contract. Every contract should be made which is possible to perform otherwise void. If an agreement is made for an impossible act like fly over sky without any instrument, it is void since it is impossible.

Performance in actual is completing the deal or agreement according to the terms given in the contract. For example, Ram Chandra wants to buy that snazzy looking 1998 Ferrari from the local dealer's clearance sale. The dealer, Mr. Shiva, offers to sell Ram Chandra that slick-looking German car if he pays the dealer Rs 9, 700, 000. After a little of bargaining, Ram Chandra agrees to the terms and get the car at a deducted price of Rs 9, 699, 500, signing on the dotted line. The contract has been accepted. Mr. Shiva, Ram Chandra's car dealer, will deliver the 1997 Ferrari and then Ram Chandra pay him all the balance due. The dealer delivers the car and Ram Chandra's payment of Rs 9,699,500, are the performance of the contract.

Both parties must compulsorily live up to their end of the bargaining period in the contract to have closure or end. In other words, until and unless both parties have properly performed/ conduct under the contract, the contract remains opened.

The performance may classify into two types:

Actual Performance: When a promisor made a propose of performance to the promisee and the proposed has been accepted by the promisee, it is called actual performance, it is called actual performance. For example, Ashish contracted to deliver Makkhan rice to Ram within next week from the date of agreement and Ram will pay the full amount of the goods within 3 weeks of delivery. In accordance with the agreement, Ashish delivers Makkhan rice to Ram within the week and Ram also paid the amount to Ashish within the agreed time.

Attempted Performance: When promisor made an offer of performance to the promisee and offer has not been accepted by the promisee. It is called attempted performance. For example, Ashish contracted to deliver Makkhan rice to Ram within a week. If Ram refused to take delivery of Makkhan rice, it is the case of attempted performance because Ashish has done what he was required to do under the contract.

Who may perform contract?

  1. The promisor himself: As a general rule, a contract can be performed by the promisor, either through any other competent person or personally. But in the case of the contract involving or requiring taste or diligence, personal skill, etc, for example, contract to paint a picture, a contract of the agency or of service; the promisor himself must compulsorily perform the contract of the agency or of service. In the case of disablement or death of a promisor, a contract will be discharged and the other party would be free from liability.

  • For example, Ashish promises to paint a picture for Bishal. Ashish must perform the promise himself rather than be taking help of other.
  1. The promisor or his agent: Where there is no necessary of personal skill and the work could be done by anyone, the promisor or his representative may exercise a competent person to perform it. In the case of a contract to sell the goods, the promisor himself or his agent or salesperson may perform the contract.

  • For example, Ashish promises Bishal to sell the goods at a certain price. Ashish may perform this promise himself or ask his agent or salesperson for performance of contract

  1. The Legal Representative: In the case of death or disablement of the promisor before the performance, the responsibility of performance falls on his legal representatives of an expired promisor are not bound for the performance of the contract. But in the case of a contract of impersonal or formal nature, the legal representative have bound for the performance of the contract. They are not liable personally.

  • Example, Ashish promises to paint a picture for Bishal on a certain day at a certain price fixed in the agreement. Ashish dies before the day of the transaction, the contract could not be performed. Ashish’s heirs are not liable for the contract as in this case the personal skill of Ashish was involved in it.

  • Similarly, Ashish promises to deliver goods to Bishal on a certain day on payment of Rs 10, 000. Ashish dies before that day of transaction. Ashish’s representatives are bound to deliver the goods to Bishal and Bishal is bound to pay the settled sum of Rs10, 000 to Ashish’s representatives.

  1. The Third Person: If a promisee accepts performance of the promisor from a third person, he cannot afterward impose it against the promisee. Once the third party performs or completes the contract, and that is accepted by the promisee there is the end of the matter and the promisor is then discharged.

  • For example, promisee accepted lesser amount from the third party in full satisfaction of his claim; it was held that he could not enforce the promisee against the promisor for the remainder.

Who can demand performance of the contract?

The only person/party is the promisee who can demand performance of the promise in a contract, for, the general rule is that "a person cannot achieve rights under a contract to which he isn't a party ". A third party or any other cannot demand performance of the contract even in the situation if it was made for his benefit.

In the case of the death of the promisee, his legal representatives are entitled to impose the performance of the contract against the promisor.

For example, Ashish promises Bishal to pay Calvina a sum of Rs.10, 000. The person who can demand performance is Bishal and not Calvina since the contact was done between Ashish and Bishal. In the case of death of the promisee, his legal representatives can demand performance of the contract.

Similarly, Ashish draws a cheque for Rs10, 000 in favor of Calvina the banker makes a mistake regarding Ashish’s balance and refuses payment. Bank is liable to Ashish and not to Calvina because Calvina is not a party to contract.

Reference:

Shrestha, R. P. (2007).Business Law.Kathmandu: M.K.Books.

http://legal-dictionary.thefreedictionary.com/, 2011

, W. (2016).businessdictionary. Retrieved from businessdictionary.com:http://www.businessdictionary.com/definition/performance-of-contract.html

Jones, S. (2012). http://freebcomnotes.blogspot.com. Retrieved from free BCom notes:http://freebcomnotes.blogspot.com/2016/04/performance-of-contract.html

Performance of the contract

The performance of the contract means the fulfillment of respective promises by the concern parties as mentioned in the contract. 

 

Who may perform the contract?

  • The promisor himself
  • The promisor or his agent
  • The Legal Representative
  • The Third Person

Who can demand performance of the contract?

 

The only person/party is the promisee who can demand performance of the promise in a contract, for, the general rule is that "a person cannot achieve rights under a contract to which he isn't a party ".

The performance may classify into two types:

Actual Performance

Attempted Performance

 

 

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mohan

How we make contract ?


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