Who Must Perform a Contract?

Introduction

A contract creates obligations between the parties, and those obligations must ordinarily be fulfilled in accordance with the agreement. However, the person who must perform a contractual promise may vary depending on the nature of the promise, the intention of the parties and the circumstances of the contract.

The Indian Contract Act, 1872, addresses this issue primarily through Sections 37 and 40–45. These provisions explain when a promisor must perform personally, when another person may perform, what happens when a promisee accepts performance from a third person, and how contractual obligations are dealt with when there are joint promisors.

For example, if A promises to pay B ₹50,000, the payment may be made by A personally or through another person. However, if A promises to paint a portrait using A’s personal artistic skill, A may be required to perform the promise personally.

Understanding who must perform a contract is essential to determining whether a contractual obligation has been properly fulfilled and who remains liable if performance does not take place.

Relevant Statutory Provisions

Section 37: Obligation of Parties to Contracts

Section 37 provides that the parties to a contract must either perform or offer to perform their respective promises unless performance is dispensed with or excused under the Indian Contract Act or another applicable law.

The section also provides that promises bind the representatives of a promisor who dies before performance, unless a contrary intention appears from the contract.

This rule is subject to an important qualification: obligations that depend on the promisor’s personal skill, qualifications or individual involvement ordinarily cannot be performed by legal representatives after the promisor’s death.

Example: A agrees to repay a loan to B. If A dies before the repayment date, A’s legal representatives may be required to satisfy the obligation from the estate inherited from A, subject to applicable law. They do not ordinarily become personally liable beyond the assets for which the law makes them responsible.

Section 40: Person by Whom a Promise Is to Be Performed

Section 40 is the principal provision dealing with who must perform a contractual promise.

It provides that where the nature of the case indicates that the parties intended a promise to be performed by the promisor personally, the promisor must perform it personally. In other cases, the promisor or the promisor’s representatives may employ a competent person to perform it.

The section establishes two broad categories.

1. Promises Requiring Personal Performance

Where the nature of the contract or the parties’ intention requires the promisor’s personal involvement, another person cannot simply be substituted to perform the promise.

This commonly applies where the contract depends on personal skill, artistic ability, professional expertise or another quality specifically associated with the promisor.

Example: A agrees to paint an original portrait for B. A must perform the promise personally because the agreement requires A’s own artistic skill.

2. Promises That May Be Performed by Another Person

Where personal performance is not essential, the promisor may employ a competent person to fulfil the obligation.

Example: A agrees to pay B ₹20,000. A may make the payment personally or arrange for another person to make it on A’s behalf.

The distinction depends on the nature of the promise and the intention of the parties, rather than simply on whether another person is available to perform it.

Section 41: Effect of Accepting Performance from a Third Person

Section 41 provides that when a promisee accepts performance of a promise from a third person, the promisee cannot subsequently enforce the same promise against the original promisor.

The provision prevents the promisee from demanding the same performance again after accepting it from someone else.

Example: A owes B ₹10,000. C pays the amount on A’s behalf, and B accepts that payment as fulfilment of A’s obligation. B cannot subsequently demand the same ₹10,000 from A.

The key requirement is acceptance of the performance. A mere offer by a third person that the promisee does not accept does not automatically discharge the original promisor.

Section 42: Devolution of Joint Liabilities

Section 42 deals with the devolution of joint liabilities when two or more persons make a joint promise.

Unless a contrary intention appears from the contract, the joint promisors must fulfil the promise jointly during their joint lives. If one of them dies, the deceased person’s legal representative must act jointly with the surviving promisors. After the death of the last surviving promisor, the legal representatives of all the promisors must fulfil the promise jointly.

This rule is subject to the nature of the obligation and the legal limitations applicable to the liability of legal representatives.

Example: A and B jointly promise to repay ₹1,00,000 to C. If A dies before performance, A’s legal representative and B must fulfil the obligation jointly, subject to the applicable legal rules.

Section 43: Liability of Joint Promisors

Section 43 provides that, unless the contract expressly states otherwise, the promisee may compel any one or more of the joint promisors to perform the whole promise.

The section also provides for contribution among joint promisors. Each joint promisor may require the others to contribute equally towards the performance of the promise, unless a contrary intention appears from the contract.

If one joint promisor defaults in contributing, the remaining joint promisors must bear the resulting loss equally, subject to the statutory provision.

Example: A, B and C jointly promise to pay D ₹90,000. D may, in the absence of an agreement to the contrary, compel A alone to perform the entire promise. A may then seek the appropriate contribution from B and C.

The provision protects the promisee by allowing enforcement against one or more joint promisors without requiring the promisee to pursue each promisor separately.

Section 44: Effect of Release of One Joint Promisor

Section 44 provides that where one of several joint promisors is released by the promisee, the release does not discharge the other joint promisors. Nor does it free the released promisor from responsibility towards the other joint promisors.

This means that releasing one joint promisor does not automatically extinguish the liability of the others.

Example: A, B and C jointly promise to pay D ₹60,000. D releases A from liability. Under Section 44, B and C are not automatically discharged from their obligations merely because A has been released.

The provision must be read with Section 43, which governs enforcement against joint promisors and contribution between them.

Section 45: Devolution of Joint Rights

Section 45 deals with the devolution of rights where a promise has been made to two or more persons jointly.

Unless a contrary intention appears from the contract, the right to claim performance rests jointly with the promisees during their joint lives. After the death of one promisee, the right passes to the deceased promisee’s legal representative jointly with the surviving promisees. After the death of the last surviving promisee, the legal representatives of all the promisees jointly hold the right to claim performance.

Example: A promises to pay ₹50,000 jointly to B and C. If B dies before the promise is performed, the right to claim performance generally rests with C and B’s legal representative jointly, subject to the contract and applicable law.

Who Can Perform a Contract?

The following table summarises the principal rules.

Person	When performance is permitted or required	Relevant provision
Promisor personally	Where the contract requires personal performance	Section 40
Competent third person	Where personal performance is not essential and substitution is permitted	Section 40
Legal representatives	For obligations that survive the promisor’s death	Section 37
Third person whose performance is accepted	Acceptance prevents the promisee from enforcing the same promise again against the original promisor	Section 41
Joint promisors	Joint liabilities are governed by the statutory rules on enforcement and contribution	Sections 42–44
Joint promisees and their legal representatives	Rights to claim performance devolve according to the statutory rules	Section 45

Important Case Law

Vinayak Purshottam Dube (Deceased) Through Legal Representatives v. Jayashree Padmakar Bhat (2024)

Court: Supreme Court of India.

Decision: 1 March 2024.

Legal issue: The case considered the operation of Sections 37 and 40 of the Indian Contract Act, 1872, in determining whether contractual obligations could be performed or enforced through legal representatives after the death of a promisor.

Legal principle: The Supreme Court explained that legal representatives may be bound to fulfil a deceased person’s contractual obligations to the extent of the estate inherited by them. However, they are not ordinarily personally liable for the deceased person’s contractual debts, and obligations dependent on the deceased person’s personal skills or qualifications do not ordinarily survive in the same way as obligations that can be performed by another person.

Relevance: The decision illustrates the distinction between contractual obligations that can be performed through legal representatives and obligations requiring the personal performance of the promisor. It is relevant to Sections 37 and 40. <Cite refs={[“turn506996search25″,”turn506996search11”]}/>

Key Points for Exams

• Section 37 establishes the general obligation of parties to perform or offer to perform their promises.
• Section 40 determines who must perform a contractual promise.
• A promise requiring personal skill or personal involvement must ordinarily be performed by the promisor.
• Where personal performance is unnecessary, a competent person may perform the promise in accordance with the contract.
• Under Section 41, acceptance of performance from a third person prevents the promisee from subsequently enforcing the same promise against the original promisor.
• Section 42 governs the devolution of joint liabilities.
• Section 43 permits enforcement of the whole joint promise against any one or more joint promisors, subject to the contract.
• Section 44 deals with the effect of releasing one joint promisor.
• Section 45 governs the devolution of joint rights.
• The Supreme Court’s decision in Vinayak Purshottam Dube v. Jayashree Padmakar Bhat (2024) explains the relationship between personal performance and the obligations of legal representatives.

Conclusion

The question of who must perform a contract depends on the nature of the promise, the intention of the parties and the applicable provisions of the Indian Contract Act, 1872.

Sections 37 and 40 establish the general rule that contractual promises must be performed, while distinguishing obligations requiring personal performance from those that may be fulfilled by another competent person. Section 41 addresses the consequences of accepting performance from a third person, and Sections 42–45 govern joint liabilities, contribution, release and joint rights.

The central principle is that contractual obligations must be fulfilled by the person legally responsible for them. Whether performance may be delegated, whether an obligation survives death and whether a promisee can enforce the entire promise against one joint promisor depend on the statutory rules and the terms of the contract.