In view of the coronavirus pandemic, we are making LIVE CLASSES and VIDEO CLASSES completely FREE to prevent interruption in studies
Business Laws > Indian Contract Act 1872: Part II > Who Performs the Contract?
Indian Contract Act 1872: Part II

Who Performs the Contract?

There are at least two parties to a contract, a promisor, and a promisee. A promisee is a party to which a promise is made and a promisor is a party which performs the promise. Three sections of the Indian Contract Act, 1872 define who performs a contract – Section 40, 41, and 42. In this article, let us take a look at the following sections to understand the concept of the performance of a contract better.

Section 40

Section 40 of the Indian Contract Act, 1872 states

If the nature of a contract indicates that either of the parties intended that the promise contained in the contract must be performed by the promisor himself

  • then the promisor is obligated to perform the promise
  • else the promise can be performed by the promisor or his representatives or an employed agent.

Let’s look at some examples: Peter promises to pay Rs 50 to John. In this case, Peter can perform the promise himself by paying the money to John or can ask someone else to pay him. Also, if Peter dies before fulfilling his promise, then his representatives are required to perform the promise or employ someone to do the same.

We will take a look at another example. Peter is a singer and he promises to sing a song at John’s wedding reception. In this case, the nature of the contract requires Peter to perform the promise himself. He cannot delegate it to someone. So, there are three possibilities for the performance of the promise. It can be done by the promisor, his representatives or his agent, depending on the nature of the contract.

promisor

Promisor Performs the Promise

If a contract indicates that the parties intended for the promisor to fulfil the promise himself, then the promisor is obligated to perform the promise. Usually, these include promises which involve personal skills, experience, or expertise and are usually based on trust between the promisor and the promisee.

Example 2 cited above about Peter singing at John’s wedding reception is a good example of a personal skill being required to perform the promise.

Learn Capacity to Contract here. 

Agent Performs the Promise

If the contract does not require the personal consideration of the promisor, then the promisor can employ a competent person to perform the promise. Example 1 cited above is a good example of Peter employing an agent to pay Rs 50 to John.

Legal Representatives Perform the Promise

If the promisor dies before performing the promise, then the legal representatives become responsible for the same. If the promise involves the utilization of personal skills or expertise, then the consideration ceases with the death of the promisor.

However, in all other scenarios, the legal representatives are obligated to perform the promise unless the contract has a contrary intention specified. Also, the liability of the legal representatives is limited to the value of the property inherited by them.

Peter promises to pay John an amount of Rs 10,000 within one month of delivery of certain goods. John delivers the goods. However, Peter dies before he can pay the money to John. Now, it is his legal representative’s responsibility to ensure that John receives the payment. The representative can pay himself or employ someone for the same.

Section 41

If the promisee accepts the performance of a promise from a third person, then he cannot enforce it against the promisor at a later date. Hence, the performance of the promise by a third-party discharges the promisor of his obligations even if he has not authorized the third-party to perform the promise.

Peter promises to pay John an amount of Rs 10,000 for painting his house. John finishes the job but Peter is unable to pay him. Oliver, a common friend of Peter and John, offers Rs 6,000 to John on behalf of Peter, which he accepts. Eventually, John files a suit for recovery against Peter.

The Court holds that:

  • John accepted Rs 6,000 from a third-person.
  • Peter has not authorized the third-person.
  • Hence, John’s act has discharged Peter of his liability to pay the entire amount.
  • John can only claim Rs 4,000 from Peter now.

Section 42

If the promisors agree to perform a promise together – joint promise – then they are jointly obligated to fulfil the promise, unless the contract specifies a contrary intention. Also, if any of the promisors die, then their legal representatives must fulfil the promise jointly with the surviving promisors. If all the promisors die, then the legal representatives of each of them must perform the promise jointly.

Peter, John, and Oliver jointly promise to pay Rs 9,00,000 to Rita. However, Peter dies before paying the money. In this case, Peter’s representative – Jack, is now jointly responsible along with John and Oliver to pay Rita the amount.

Unfortunately, before Rita receives her money, all the three promisors, i.e. Peter, John, and Oliver die. In this case, Jack – Peter’s representative, Tony – John’s representative, and Sam – Oliver’s representative must jointly pay the amount to Rita.

Learn Discharge of a Contract here in detail. 

Solved Example for You

Q: Peter and John are childhood friends. Peter is a painter and agrees to paint John’s c for a payment of Rs 20,000. However, he is in urgent need and requests John to pay him in advance. John obliges and they enter into a contract for the same. Peter starts making John’s portrait. However, before he can finish, he dies in a car accident. Jack inherits Peter’s property. Can John file a suit for recovery since he had already made the payment but did not get his portrait in return?

Ans: Since the contract was based on personal consideration, that is Peter’s painting skills and there was no clause in the contract regarding a refund if Peter fails to deliver the portrait, John cannot file a suit for recovery of his money.

Share with friends

Customize your course in 30 seconds

Which class are you in?
5th
6th
7th
8th
9th
10th
11th
12th
Get ready for all-new Live Classes!
Now learn Live with India's best teachers. Join courses with the best schedule and enjoy fun and interactive classes.
tutor
tutor
Ashhar Firdausi
IIT Roorkee
Biology
tutor
tutor
Dr. Nazma Shaik
VTU
Chemistry
tutor
tutor
Gaurav Tiwari
APJAKTU
Physics
Get Started

1
Leave a Reply

avatar
1 Comment threads
0 Thread replies
1 Followers
 
Most reacted comment
Hottest comment thread
1 Comment authors
Pratham Sethi Recent comment authors
  Subscribe  
newest oldest most voted
Notify of
Pratham Sethi
Guest
Pratham Sethi

K and A had entered into a contract where K was to supply 50,000 phones to A within 2 months from the date of signing of contract. K was to procure the phones from China and deliver the same to A. The rate of the phone was Rs. 5000/- a piece (inclusive of all taxes and duties). At the time of the execution of the contract, the duty was at 5% (five percent). Immediately after the execution of the Agreement, India had increased the duties to 1000% (one thousand percent). Therefore, K was finding it difficult to sell the phones… Read more »

Amber
Guest
Amber

section 20 of the contract act 1872 says that if there is a mistake of fact and both the parties did not know the fact occurred after assigning the contract then it can’t be enforceable by law and the money or any reward will be return to the party who accepted that offer(section 65,72 of contract act).

Sushil Kumar Singhal
Guest
Sushil Kumar Singhal

At the time of execution of contract Taxes and duties were different than while implementing the contract. which was not foreseeable hence K and A if agree than contract can be implemented otherwise K can rescind the contract.

RANABEER HALDER
Guest
RANABEER HALDER

K CAN CLAIM RELIEF UNDER DOCTRINE OF FRUSTRATION

Stuck with a

Question Mark?

Have a doubt at 3 am? Our experts are available 24x7. Connect with a tutor instantly and get your concepts cleared in less than 3 steps.
toppr Code

chance to win a

study tour
to ISRO

Download the App

Watch lectures, practise questions and take tests on the go.

Get Question Papers of Last 10 Years

Which class are you in?
No thanks.