As a promisor and promise are essential to a contract, so are the time and place of the performance of contract. If a time and place for the performance of contract are agreed upon, then the promisor should perform the promise accordingly. If not, then it should be performed at a reasonable place and time. The Indian Contract Act, 1872, specifies some rules regarding the time and place for the performance of contract under sections 46 – 50.
Time and Place of Performance of Contract
When no application to be made and no time specified (Section 46)
Imagine a contract where the promisor has to perform his promise without any application by the promisee and there is no time specified for the performance of the same. In such a scenario, the promisor should perform the contract at a reasonable time.
While the term ‘reasonable’ can have different interpretations, the section specifies that it the circumstances of every case will determine the definition of reasonable for the parties involved.
Example: Peter promises to pay John Rs 5,000 in cash at his house, within six months, as a repayment of the loan he had taken from John. Peter leaves for work at six in the morning which is when John returns home from his night shift job. As per the circumstances, the only time when Peter and John can meet is at six in the morning. Hence, the time and place for the performance of contract is 6 a.m. at John’s house.
No Application to be made but Time is Specified (Section 47)
If there is a contract where the promisee is not required to make an application but the promisor needs to perform the contract only on a Sunday, then the promisor should perform the promise during regular business hours, unless the time is specified in the contract too.
Example: Peter promises to deliver certain goods to John on payment of an advance of Rs 5,000. John makes the payment and asks Peter to deliver the goods on a Sunday. Since the time is not specified, Peter should deliver it between 9 am and 6 pm, assuming those are the regular business hours in the place they live.
If Peter attempts delivery after the business hours, then John has the right to not accept the goods and ask Peter to deliver again during business hours.
Application by the Promisee required (Section 48)
Let’s say that there is a contract where the promisee necessarily needs to make an application for the performance of a contract, then the promisee needs to ensure that the application is made at a proper place and time. In this case, the phrase ‘proper place and time’ can have different meanings in different cases.
Example: Peter and John enter a contract where Peter promises to fix John’s car whenever he asks him to. Peter also takes an advance payment for the same. When John asks Peter to fix his car, he must ensure that he doesn’t ask Peter to go a lot out of his way. Also, he must preferably ask for repairs during business hours.
No Application to be made but the Place of Performance is not Specified (Section 49)
Imagine a contract where the promisee is not required to make an application for the performance of contract. Also, the place of performance is unspecified. In such a scenario, it is the responsibility of the promisor to apply to the promisee asking him to appoint a reasonable place for the performance of the promise.
Example: Peter promises to deliver 5 television sets to John on a fixed day and time. However, the contract does not mention an address. It is Peter’s responsibility to apply to John and ask him to appoint a reasonable place where he can safely accept the delivery of the goods.
Performance as prescribed by the Promisee (Section 50)
There can also be a contract where the promisor agrees to perform the promise in a manner and at a place and time prescribed or sanctioned by the promisee.
Example: John’s son is in the hospital. He needs money for his son’s operation. Peter owes money to John and agrees to repay him in cash/cheque at any place or time decided by John. In this case, John has the liberty to ask for the performance of the promise in any manner and at any place or time suited to him.
Solved Example on Performance of Contract
Q1. Peter owes Rs 5,000 to John. According to the agreement between them, John doesn’t need to make an application for Peter to repay the loan. Also, there is no specification for the place and time. Further, Peter has agreed to repay the money in a manner and at a place and time prescribed by John.
One day John visits Peter’s house and takes a liking for a new painting made by Peter. He asks Peter to give him the painting in lieu of the loan. Peter obliges and does the necessary paperwork. Has Peter repaid his loan?
Ans: According to Section 50 of the Indian Contract Act, 1872, Peter has performed his promise in a manner and at a place and time prescribed by the promisee, John.
John asked for the painting as a repayment of the loan. He exercised his right to determine the manner of the performance of the promise. Since Peter obliged, he had fulfilled the contract and was no longer liable to pay any further money to John.