Indian Contract Act 1872: Performance of Contracts

Meaning of Performance of Contracts

Performance of Contracts means fulfilling of their respective legal obligations created under the contract by both the promisor and the promisee. When a contract is duly performed by both the parties, the contract comes to a happy ending and nothing more remains. Performance by all the parties of the respective obligations is the normal and natural mode of discharging or terminating a contract.

By whom Contracts must be Performed? 

1. By the promisor himself: In the case of a contract involving skill, taste or credit; e.g., a contract to paint a picture, a contract of agency or service; the promisor must himself perform the contract.
   
2. By the promisor or his agent: In the case of a contract of impersonal nature; e.g., a contract of sales of goods or a contract to lend a sum of money, the promisor himself or his agents may perform the contract [Section 40 Clause (2)].
   
3. By the legal representatives: In case of the death of the promisor before performance, the liability of the performance falls on his legal representatives, unless a contrary intention appears from the contract [Section 37 Clause (2)].
    Thus, in the case of contracts involving personal skill, the heirs or legal representatives of a deceased promisor are not bound to perform the contract. Such contracts come to an end on the death of the promisor. But in the case of contracts not involving personal considerations, the legal representatives are bound to perform the contract.
   
4. Performance by a third person: Section 41 lays down that if a promisee accepts performance of the promise from a third person, he cannot afterwards enforce it against the promisor. Thus where a promisee accepted a lesser amount from a third party in full satisfaction of his claim, it was held that he cannot enforce the promise against the promisor.