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Unit 5: Discharge of Contract

perform his promise at the agreed time, the promisee accepts performance of such promise at any Notes
time other than agreed, the promisee cannot claim compensation for any loss occasioned by the
non-performance of the promise at the time agreed, unless at the time of such acceptance he gives
notice to the promisor of his intention to do so. Thus, if the performance beyond the stipulated
time is accepted, the promisee must give notice of his intention to claim compensation. If he fails
to give such notice he will be deemed to have waived that right.

5.9 What is the Effect of the Death of one Party on the Contract?

The contract may or may not be discharged. It depends upon the personal skill, qualifi cation or

ability of the promisor. Where the personal skill, qualification or ability of the promisor is the
basis of the contract the contract stands discharged by his death or physical disablement or illness
as a result of which the contract could not be performed. However, in a case where the personal

skill, qualification or ability of the promisor is not the basis of a contract, his death does not result
in the discharge of his obligations under the contract.

Example:
(i) A agrees to paint a picture for B by a certain date. A dies before that time without painting
the agreed picture. The death of A results in the discharge of the contract and therefore his
legal representatives are not liable either to perform the contract or to pay compensation
for non-performance.
(ii) A borrows a sum of ` 5,000 from B to be paid by a certain date. A dies before that date without
meeting his obligation. His legal representatives are liable to pay the borrowed amount.
However, their liability is limited to the extent of the value of the assets inherited.

5.10 Summary

z A contract creates obligations. ‘Performance’ of contract means the carrying out of
obligations under it. The parties to contract must either perform or offer to perform their
respective promises unless such performance is dispensed with or excused under the
provisions of the Indian Contract Act, or some law (s.37).
z The promise may be performed by promisor himself or his agent or by his legal
representative. (i) In case, there was an intention of the parties that the promise must be
performed by the promisor himself, such promise is to be performed by him only. Thus,
where A promises to paint a picture for B, then A must perform this promise personally.
(ii) If there is no such intention of the parties, then the promisor may employ a competent
person to perform the promise. If A has promised to deliver some items of grocery to B,
A may perform this promise either personally delivering the items to B or causing it to be
delivered to B through someone.

z 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.
z In the case of mutual and independent promises, each party must perform his promise
without waiting for the performance or readiness to perform on the part of the other. A
promises B to deliver him goods on 10 July and B in turn promises to pay the price on 6
July. B’s paying the price is independent of A’s delivering the goods and even if B does not
pay the price on 6 July, A must offer the delivery of the goods on 10 July. A can, of course,
sue B for price and damages.

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