Performance of Contract and Section 37 of Indian Contract Act
Performance of Contract and Section 37 of the Indian Contract Act, 1872
1. Meaning of Performance of Contract
Performance of a contract means the fulfillment of the promises or obligations specified in the contract by the parties involved.
Once the contract is performed, the contract comes to an end, and parties are discharged from their duties.
Performance can be complete or partial, depending on the terms of the contract.
2. Section 37 of Indian Contract Act, 1872: Overview
Section 37 states:
“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.”
This means each party is bound to perform their part of the contract or at least make a valid offer to perform, unless there is a lawful excuse.
3. Key Features of Section 37
Mutual obligation: Both parties are bound to perform their promises.
Offer to perform: If one party cannot perform immediately, a valid offer to perform suffices to show willingness.
Exceptions: Performance is not required if:
It is dispensed with by contract.
It is excused by law (e.g., impossibility, frustration).
4. Legal Implications
No party can enforce the contract without performing their own promise.
If a party refuses or neglects to perform, the other party may sue for breach.
Where one party has made a valid offer of performance, they are generally protected from breach claims.
5. Case Law Illustrations
a) Pinnel’s Case (1602) 5 Co Rep 117a
Although an English case, it’s foundational for understanding contract performance.
Held that part performance or payment of a lesser sum than due is not sufficient to discharge the full obligation unless accompanied by something extra.
b) Hochster v. De la Tour (1853) 2 E & B 678
The defendant repudiated the contract before the date of performance.
The court allowed the plaintiff to sue immediately for breach.
This highlights the importance of performance and offer to perform.
c) Subramanian Chettiar v. S. Karunakaran Chettiar AIR 1943 Mad 80
The court held that a party who has not performed or offered to perform his obligation cannot sue the other party for non-performance.
Reinforces the principle of Section 37.
6. Related Concepts
a) Time and Place of Performance (Section 38, 39, 40)
Time and place for performance must be as per contract or reasonable if not specified.
Delay in performance may amount to breach.
b) Tender of Performance
An offer to perform exactly as per contract conditions.
Valid tender protects the performing party from claims of breach.
7. Practical Implications
Parties must be ready and willing to perform their obligations.
Mere promise to perform in the future is insufficient.
Failure to perform entitles the other party to remedies such as damages, specific performance, or rescission.
8. Summary Table
| Aspect | Explanation |
|---|---|
| Section 37 | Parties must perform or offer to perform promises |
| Mutuality | Both parties obligated to perform |
| Exceptions | Excused or dispensed by law or agreement |
| Remedy for Non-performance | Breach of contract, damages |
| Valid Tender | Protects party offering performance |
9. Conclusion
Section 37 of the Indian Contract Act establishes a fundamental principle of contract law: performance or valid offer of performance is mandatory before a party can claim enforcement. It ensures fairness by obligating both parties to fulfill their promises unless excused by law. This principle is well supported by judicial precedents, reinforcing the balance of duties and rights in contract performance.
RELATED Blog
0 comments