I. Performance of Contract [Sections 37–67]
Performance refers to the fulfillment of obligations by the parties as agreed in the contract.
1. Types of Performance
a) Actual Performance
When both parties fulfill their promises as per the contract.
b) Attempted Performance (Tender)
When one party offers to perform their part but the other party refuses.
- Valid Tender must be:
- Unconditional
- At proper time and place
- With willingness to perform completely
2. Who Must Perform?
- Promisor himself, if personal skill is required.
- Agent, if allowed by nature of the contract.
- Legal representative, in case of death of promisor (if contract is not personal in nature).
- Third party, if accepted by promisee.
3. By Whom Must Performance Be Accepted?
- Promisee or his agent
- Legal representative (if promisee is dead)
4. Joint Promises
- All promisors must jointly perform unless otherwise agreed.
- Promisee can compel any one of the joint promisors to perform.
II. Discharge of Contract
Discharge means the termination of the contractual relationship.
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1. Discharge by Performance
When both parties perform their obligations, the contract ends naturally.
2. Discharge by Mutual Agreement [Section 62]
By novation, rescission, alteration, or remission:
- Novation: Substituting a new contract or party.
- Rescission: Cancelling the contract by mutual agreement.
- Alteration: Change in terms with consent.
- Remission: Acceptance of lesser performance.
📝 Example: A owes B ₹10,000. B agrees to take ₹8,000 in full satisfaction. Contract is discharged by remission.
3. Discharge by Impossibility [Section 56]
Also known as doctrine of frustration.
a) Initial Impossibility – Void ab initio
b) Subsequent Impossibility – Becomes void due to events like:
- Change in law
- Destruction of subject matter
- Death/incapacity in personal contracts
- Government interference
Case: Taylor v. Caldwell (1863) – Concert hall burned down; contract discharged due to impossibility.
4. Discharge by Lapse of Time
As per Limitation Act, if a party fails to perform or sue within a specified time (usually 3 years), the contract is discharged.
5. Discharge by Operation of Law
Occurs in cases of:
- Death (in personal contracts)
- Insolvency
- Merger of rights
- Unauthorized material alteration
6. Discharge by Breach of Contract
When a party fails or refuses to perform:
- Actual Breach – On due date or during performance.
- Anticipatory Breach – Before the due date by words or conduct.
📝 Example: A agrees to deliver goods on 10th June but says on 1st June he won’t. This is anticipatory breach.
III. Summary Table
| Mode of Discharge | Description |
|---|---|
| Performance | Fulfillment of promises by both parties |
| Agreement (S.62) | Novation, Rescission, Alteration, Remission |
| Impossibility (S.56) | Contract becomes impossible to perform |
| Lapse of Time | Time-barred as per Limitation Act |
| Operation of Law | Death, insolvency, unauthorized changes |
| Breach of Contract | Refusal or failure to perform – actual or anticipatory |