Performance of Contract: Exercise Solutions
How to Use This Page
Read the Samacheer Kalvi textbook chapter first. Then use this page to revise: attempt the textbook questions on your own, then compare with the model answers below. Pay special attention to the Common Mistakes section and the Exam Checklist before your test.
Key Concepts (Quick Recap)
| Term | Definition |
|---|---|
| Actual Performance | When the promisor has done what he had undertaken to do under the contract |
| Attempted Performance | When the promisor offers to perform but the promisee does not accept — a valid tender of performance |
| Tender | An unconditional offer to perform a contractual obligation |
| Promisor | Person who has undertaken to perform an obligation under a contract |
| Promisee | Person to whom the promise has been made, entitled to demand performance |
| Legal Representative | Person who oversees legal affairs of another (executor, administrator, guardian) |
| Reciprocal Promises | Promises which form consideration or part of consideration for each other (Section 2(f)) |
| Joint Promisors | Two or more persons who have made a joint promise together |
| Appropriation | Application of payments when a debtor owes several debts and makes a partial payment |
| Section 59 | Debtor's right to appropriate payment to any debt |
| Section 60 | Creditor's right to appropriate if debtor does not indicate |
| Section 61 | Payment applied in order of time if neither party appropriates |
I. Choose the Correct Answer (MCQ)
Q1. On the valid performance of the contractual obligations by the parties, the contract
(a) Is discharged ✓   (b) Become enforceable   (c) Becomes void   (d) Becomes legal
Q2. Which of the following persons can perform the contract?
(a) Promisor alone   (b) Legal representatives of promisor   (c) Agent of the promisor   (d) All the above ✓
Q3. A, B, C jointly promised to pay Rs.50,000 to D. Before performance of the contract, C dies. Here, the contract
(a) Becomes void on C's death   (b) Should be performed by A and B along with C's legal representatives ✓   (c) Should be performed by A and B alone   (d) Should be renewed between A, B and D
Q4. Which of these parties cannot demand performance of promise?
(a) Promisee   (b) Any of the Joint Promisees   (c) On the death of a Promisee, his Legal Representative   (d) Stranger to the Contract ✓
Q5. A person is said to be a third person if he is not a
(a) promisor   (b) promisee   (c) agent ✓   (d) Legal Representative
Q6. Every promise and every set of promises, forming the consideration for each other is an
(a) agreement ✓   (b) contract   (c) offer   (d) acceptance
Q7. When, at the desire of the promisor, the promisee or any other person has done or abstained from doing or promises to do or abstain from doing something, such act or abstinence or promise under section 2(d) is called
(a) Reciprocal promise   (b) consideration for the promise ✓   (c) counteroffer   (d) acceptance
Q8. Promises which form the consideration or part thereof, for each other under section 2(F) are called
(a) acceptances for different proposals   (b) agreements   (c) reciprocal promises ✓   (d) consideration
Q9. In a valid contract, what comes first
(a) enforceability ✓   (b) acceptance   (c) promise   (d) proposal
Q10. The void agreement signifies
(a) agreement illegal in nature   (b) agreement not enforceable by law ✓   (c) agreement violating legal procedure   (d) agreement against public policy
II. Fill in the Blanks
1. There are two ways of performing a contract — actual performance and attempted performance. 2. A valid tender of performance is considered equivalent to actual performance. 3. A stranger to the contract cannot demand performance. 4. Under Section 42, when two or more persons make a joint promise, all must fulfil the promise during their joint lives. 5. Under Section 45, the right to claim performance of a joint promise rests with all joint promisees during their joint lives. 6. Under Section 59, the debtor has the right to appropriate payment to any debt he chooses. 7. Under Section 60, if the debtor does not indicate which debt, the creditor has discretion to appropriate. 8. Under Section 61, if neither party appropriates, payment is applied in order of time. 9. A valid tender must be unconditional and for the whole obligation. 10. Reciprocal promises are defined under Section 2(f) of the Indian Contract Act. 11. A valid tender must be made to the promisee or his authorized agent. 12. Under Section 41, if a promisee accepts performance by a third person, the promisor is discharged. 13. When the promisor has done what he undertook to do, it is called actual performance. 14. When the promisor offers to perform but the promisee does not accept, it is called attempted performance or tender. 15. Every promisee can demand performance of a contract.
III. True or False (with corrections)
1. Actual performance and attempted performance are the same thing. False. Actual performance means the promisor has fulfilled the obligation completely. Attempted performance means the promisor offered to perform but the promisee did not accept.
2. A stranger to the contract can demand performance. False. Only the promisee, legal representative, or third party beneficiary can demand performance. A stranger to the contract cannot.
3. Joint liability ends when one joint promisor dies. False. Under Section 42, if one joint promisor dies, the remaining promisors AND the legal representatives of the deceased must perform the obligation.
4. A valid tender can be conditional. False. A valid tender must be unconditional. A conditional or qualified tender is not valid.
5. Under Section 46, performance must be within a specified time only. False. Section 46 deals with performance within a reasonable time when no specific time is mentioned. Section 47 deals with specified time and place.
6. A third person can perform a contract if the promisee accepts the performance. True. Under Section 41, if the promisee accepts performance by a third person, the promisor is discharged.
IV. Match the Following
| Column A | Column B |
|---|---|
| 1. Actual Performance | (e) Promisor fulfils the obligation completely |
| 2. Attempted Performance | (a) Valid tender of performance not accepted by promisee |
| 3. Section 42 | (d) Devolution of joint liabilities |
| 4. Section 45 | (c) Devolution of joint rights |
| 5. Section 59 | (b) Debtor's right to appropriate payment |
V. Answer Briefly
Q1. State the ways of Performing a Contract.
There are two ways of performing a contract:
1. Actual Performance: When the promisor has done what he had undertaken to do under the contract. 2. Attempted Performance: When the promisor offers to perform his obligation but the offer is not accepted by the promisee. A valid tender of performance is considered equivalent to performance.
Q2. Who is a Legal Representative?
A legal representative is a person who oversees the legal affairs of another. Examples include the executor or administrator of a deceased person's estate, and a court-appointed guardian of a minor or incompetent person. A legal representative can perform the contract on behalf of the deceased promisor.
Q3. Who is an agent?
Per Para 2 of Section 40, the promisor may employ a competent person such as an agent to perform the promise, if the contract is not formed on personal condition. Where personal skill or qualification is not the essence of the contract, performance through an agent is permissible.
Q4. Define Reciprocal Promise.
Per Section 2(f), "Promises which form consideration or part of the consideration for each other are called 'reciprocal promises'." In reciprocal promises, each promise is the consideration for the other, and both parties have mutual obligations.
Q5. By whom must contracts be performed?
Contracts may be performed by:
1. Promisor himself 2. Agent 3. Representatives 4. Third person 5. Joint Promisors
Q6. What do you mean by the appropriation of payments?
Appropriation means the application of payments. It arises when a debtor owes several debts to the same creditor and makes a payment that is insufficient to discharge the whole indebtedness. The question then arises: to which debt should the payment be applied?
Q7. What is the nature of the third person with regard to the performance of the contract?
According to Section 41, if a promisee accepts the performance of the promise by a third person, he cannot afterward enforce it against the promisor. The promisor is discharged from his obligation once a third person has validly performed the contract with the promisee's consent.
VI. Answer in Detail
Q1. Explain rules relating to place of performance of promise.
Under Section 47, if the promise is to be performed on a certain day, the promisor may undertake to perform it without application by the promisee. The promisor may perform the promise at any time during the usual hours of business on such day and at the place at which the promise ought to be performed.
If the promise is to be performed at a specific place and no day is fixed, the promisor must apply to the promisee to appoint a reasonable day for performance. The promisor must perform at the designated place within a reasonable time.
Where no place is specified in the contract, the promisor must apply to the promisee to fix a reasonable place for performance. The rules ensure that both parties have clarity on when and where performance is expected, reducing disputes.
Q2. Elucidate the provision regarding time as a factor in performance.
Common Mistakes to Avoid
1. Actual performance is NOT the same as Attempted performance — Actual means the obligation is fulfilled completely; Attempted means an offer to perform was made but not accepted by the promisee. 2. A stranger to the contract CANNOT demand performance — only the promisee, legal representative, or third party beneficiary can demand performance. 3. Joint liability survives death — if one joint promisor dies, the remaining promisors AND the legal representatives of the deceased must perform the obligation. 4. Valid tender must be UNCONDITIONAL — conditional offers or qualified tenders are not valid tenders and do not discharge the promisor. 5. Appropriation follows: debtor's intention first, then creditor's discretion, then order of time — the sequence under Sections 59, 60, and 61 must be followed. 6. Section 46 = reasonable time; Section 47 = specified time — do not confuse these two provisions on time as a factor in performance. 7. A contract can be performed by the promisor, agent, legal representative, or third person — not only the promisor personally, unless the contract involves personal skill or trust. 8. Appropriation follows debtor's intention (Sec 59), then creditor's discretion (Sec 60), then order of time (Sec 61) — this sequence must be followed.
Exam Checklist
- [ ] Can list 2 ways of performing a contract (actual vs attempted)
- [ ] Know who can perform a contract (promisor, agent, legal representative, third person, joint promisors)
- [ ] Know who can demand performance (promisee, legal representative, third party)
- [ ] Can define valid tender and list 8 essentials
- [ ] Can explain 3 types of reciprocal promises with examples
- [ ] Know rules on appropriation of payments (Sections 59, 60, 61)
- [ ] Understand devolution of joint liabilities (Section 42) and joint rights (Section 45)
- [ ] Can explain time as a factor (Section 46 vs Section 47)