Attempted Performance of a Contract under the Indian Contract Act, 1872

Introduction

Performance of a contract refers to the fulfilment of promises made by the parties to a contract. Ordinarily, contractual obligations are discharged when the parties perform their respective promises. However, a situation may arise in which one party is ready and willing to perform their promise, but the other party refuses to accept the performance.

This situation is known as attempted performance, also called tendered performance. It occurs when a promisor offers to fulfil a contractual obligation but the promisee does not accept the offer.

The Indian Contract Act, 1872, recognises this principle under Section 38, which deals with the effect of a refusal to accept an offer of performance. The provision protects a promisor who makes a valid offer to perform but is prevented from completing the performance because of the promisee’s refusal.

For example, A agrees to deliver 100 bags of rice to B on a specified date. A brings all 100 bags to the agreed place and offers to deliver them according to the contract, but B refuses to accept them without a valid reason. If A’s offer satisfies the requirements of Section 38, A may be protected against the consequences of non-performance arising merely from B’s refusal.

Meaning of Attempted Performance

Attempted performance refers to an offer by a promisor to fulfil a contractual promise when the performance is not completed because the promisee refuses to accept it.

It is also known as tender of performance. The term distinguishes an offer to perform from actual performance, in which the contractual obligation is actually fulfilled.

Attempted performance is important because a promisor should not ordinarily be held responsible for failing to complete performance when the promisor has properly offered to perform and the promisee has wrongfully refused to accept it.

However, every offer to perform does not qualify as valid tendered performance. The offer must satisfy the requirements prescribed by law.

Example of Attempted Performance

A agrees to sell and deliver a laptop to B for ₹50,000 on 15 October. On the agreed date, A brings the laptop to the agreed place and offers to deliver it in accordance with the contract. B refuses to accept the laptop even though A has complied with the contractual terms.

In this situation, A has attempted to perform the promise. If the offer satisfies Section 38, A is not responsible merely for B’s refusal to accept the performance.

Relevant Statutory Provision: Section 38

Section 38 of the Indian Contract Act, 1872, deals with the effect of a refusal to accept an offer of performance.

It provides that where a promisor has made an offer of performance to the promisee, and the offer has not been accepted, the promisor is not responsible for non-performance and does not lose the rights available under the contract merely because the promisee refuses to accept the offer.

However, the offer must satisfy the conditions prescribed by the section.

Essential Requirements of a Valid Tender

Under Section 38, an offer of performance must satisfy the following requirements:

1. Unconditional offer: The offer must be unconditional. The promisor cannot impose conditions that are inconsistent with the contractual obligation.
2. Offer at the proper time and place: The offer must be made at the time and place at which the promisor is bound to perform the promise.
3. Reasonable opportunity for inspection: Where the offer concerns the delivery of goods, the promisee must have a reasonable opportunity to ascertain that the goods offered are the goods the promisor is bound to deliver under the contract.
4. Offer to the appropriate person: The offer must be made to the promisee or to a person authorised to accept performance on the promisee’s behalf.
5. Opportunity to ascertain performance: The offer must give the promisee a reasonable opportunity to verify that the promisor is ready and able to fulfil the contractual obligation.

The legal effect of an offer depends on whether these requirements and any other applicable contractual conditions have been satisfied.

Types of Attempted Performance

1. Tender of Goods

Tender of goods occurs when the promisor offers to deliver the goods required under the contract.

For example, A agrees to supply 500 units of a product to B. A brings the correct quantity of goods to the agreed place on the agreed date, but B refuses to accept them.

If the offer satisfies Section 38, A may be protected against liability arising merely from B’s refusal.

2. Tender of Money

Tender of money occurs when a party offers to pay the amount due under a contract, but the recipient refuses to accept it.

For example, A owes B ₹20,000 and offers to pay the amount on the due date. B refuses to accept the payment without a valid reason.

The legal consequences depend on the circumstances and the applicable law. A valid offer may protect the promisor against the consequences of the refusal, but an unaccepted offer does not necessarily extinguish the underlying debt in every situation.

Legal Effects of Attempted Performance

1. Protection Against Liability for Non-Performance

Where a valid offer of performance is made and refused, Section 38 protects the promisor against responsibility for non-performance arising merely from that refusal.

2. Preservation of Contractual Rights

The promisor does not lose the rights available under the contract merely because the promisee refuses a valid offer of performance.

3. No Automatic Discharge in Every Case

Attempted performance should not be confused with actual performance. A valid tender may have specific legal consequences, but it does not automatically mean that every contractual obligation has been fully discharged.

The effect depends on the nature of the promise, the terms of the contract and the applicable statutory provisions.

4. Requirement of Readiness and Ability to Perform

A promisor cannot rely on a purported tender if they were not genuinely ready and able to fulfil the obligation in accordance with the contract. A defective or conditional offer may not receive the protection of Section 38.

Difference Between Actual Performance and Attempted Performance

Basis	Actual Performance	Attempted Performance
Meaning	The contractual promise is actually fulfilled	The promisor offers to fulfil the promise
Completion	Performance is completed to the relevant extent	Performance is offered but may be refused
Acceptance	The obligation is fulfilled in accordance with the contract	The promisee may refuse to accept the offer
Relevant provision	Section 37 and other applicable provisions	Section 38
Legal effect	Discharges the obligation to the extent properly performed	May protect the promisor against liability arising merely from refusal of a valid offer
Example	A delivers the agreed goods to B, and B accepts them	A offers the correct goods for delivery, but B refuses them

Difference Between Attempted Performance and Breach of Contract

Attempted performance and breach of contract are distinct concepts.

Attempted performance involves an offer to fulfil a promise. If the offer is valid and the promisee refuses it, Section 38 may protect the promisor against liability arising merely from the refusal.

A breach of contract occurs when a party fails to fulfil a contractual obligation without a legally recognised excuse or justification.

For example, if A agrees to deliver goods to B but does not bring the goods to the agreed place, A may be in breach of the contract. In contrast, if A properly offers to deliver the goods and B refuses to accept them, A may be protected under Section 38.

The distinction depends on the actual conduct of the parties and whether the requirements for a valid tender have been fulfilled.

Importance of Attempted Performance

Attempted performance is important for several reasons:

• It protects a promisor who is ready and willing to perform but faces an unjustified refusal from the promisee.
• It prevents a promisee from unfairly treating a promisor as having failed to perform when a valid offer was made.
• It helps determine responsibility for non-performance in contractual disputes.
• It distinguishes a genuine failure to perform from a situation in which performance is prevented by the other party.
• It clarifies the legal consequences of an offer to perform under Section 38 of the Indian Contract Act, 1872.

Key Points for Exams

• Attempted performance is also known as tendered performance.
• Section 38 of the Indian Contract Act, 1872, deals with refusal to accept an offer of performance.
• A valid tender must be unconditional and made at the proper time and place.
• In the case of goods, the promisee must have a reasonable opportunity to ascertain that the goods offered conform to the contractual obligation.
• A valid offer of performance may protect the promisor against liability arising merely from the promisee’s refusal.
• Attempted performance differs from actual performance because the promise is offered for fulfilment but may not be completed.
• A tender must comply with the applicable statutory requirements to receive the protection of Section 38.
• Attempted performance does not automatically discharge every contractual obligation.

Conclusion

Attempted performance is an important principle under the Indian Contract Act, 1872, because it addresses situations in which a promisor offers to fulfil a contractual obligation but the promisee refuses to accept the offer.

Section 38 protects a promisor who makes a valid offer of performance, provided the statutory requirements are satisfied. It ensures that a party is not automatically held responsible for non-performance when the failure to complete performance results from the other party’s refusal.

The central principle is that contractual obligations must be performed as agreed, but a party who properly offers to perform should not ordinarily suffer the legal consequences of non-performance merely because the other party refuses to accept a valid tender.