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Mercantile Laws-I

Notes 5.2 Rules regarding the Time, Place and Manner of Performance of
Contracts [Ss.46-50]

These rules are: (i) Where the time for performance has been specified and the promisor has

undertaken to perform it without application by the promisee, the promisor must perform on

the day fixed during the usual business hours and at the place at which the promise ought to
be performed. A promises to deliver goods to B at his warehouse on 15th July. A offers the
goods at B’s warehouse but after the usual hours for closing it. The performance of A is not

valid. (ii) Where the time of performance is not specified and the promisor agrees to perform
without a demand from the promisee, the performance must be made within a reasonable time.
What is a reasonable time is, in each particular case, a question of fact. (iii) Where a promise is
to be performed on a certain day, and the promisor has not undertaken to perform it without
application by the promisee, the promisee must apply for performance at a proper place and
within the usual business hours. What is a proper time and place is, in each particular case, a
question of fact. (iv) When a promise is to be performed without application by the promisee

and no place is fixed for its performance, the promisor must apply to the promisee to appoint a
reasonable place for the performance of the promise, and perform it at such place. A undertakes
to deliver 1,000 kilos of Jute to B on a fixed day. A must apply to appoint a reasonable place for

the purpose of receiving it and must deliver it to him at such place. (v) The performance of any
promise may be made in any manner or at any time which the promisee prescribes or sanctions.

Examples:

(i) A owes B ` 2,000. B accepts some of A’s goods in deduction of the debt. The delivery of the
goods operates as a part payment.
(ii) B owes A ` 2,000. A desires B to pay the amount to A’s account with C, a banker. B, who
also banks with C orders the amount to be transferred from his account to A’s credit and
this is done by C. Afterwards and before A knows of the transfer, C fails. There has been a
good payment by B.
(iii) A, a shopkeeper desires B, a customer who owes him ` 1,000 to send him a cheque for `
1,000 by post. The debt is discharged as soon as B puts into the post a letter, containing the
cheque addressed to A.

Reciprocal Promises [Ss.51-54]

Reciprocal promises means a promise in return for a promise. Thus, where a contract consists
of a promise by one party (to do or not to do something in future) in consideration of a similar
promise by other party, it is a case of reciprocal promises. Reciprocal promises may be divided
into three groups: (i) Mutual and dependent, (ii) Mutual and independent, and (iii) Mutual and
concurrent.

Rules concerning performance of different kinds of reciprocal promises. These are:
1. In the case of mutual and dependent promises, the performance of one party depends
upon the prior performance of the other party. If the promisor, who must perform, fails to
perform it, he cannot claim the performance of the reciprocal promise. On the other hand,
he must compensate the other party to the contract for any loss which such other party may
sustain by the non-performance of the contract.

Examples:

(i) A contracts with B to execute certain builder’s work for a fixed price, B supplying the
necessary timber for the work. B refuses to furnish any timber and the work cannot be

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