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Note: this post is a part of our important question answer series on Contract Law. You can read other questions by clicking here.
Answer
It goes without saying that
a contract requires a certain set of basic essentials that must be fulfilled in
order to make it legally enforceable. But even when the parties to the contract
have fulfilled these essentials, its validity can be questioned if the same is
not fulfilled in due time and in accordance to prescribed manner.
Performance of contract
means carrying out of promises and obligations undertaken by the parties according
to the terms prescribed in the contract. Section 46-50 of the contract Act lay
down the rules regarding the time and place of performance. Further, section 55
deals with the consequences of non-fulfillment of the conditions.
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Rules Regarding Time and Place of Performance of Contract
1.
Where
no application is to be made (Sec 46):
In situations, where there is no time period specified for the
performance of the contract, and the promisor has to perform the contract
without any request by the promisee, in such a case the promisor must perform the
contract within a “reasonable time”.
It should be noted here; the
term reasonable time depends on the facts and circumstances of the case and
will also depend on the nature of the transaction.
Illustration:
A, a sweet seller orders 50
KG milk with B. In this case, although A does not prescribed any time for the
performance of the contract, but the nature of the contract requires, to
perform it as soon as possible.
2.
Where
time is specified and no application is to be made (Sec 47):
When date and place of performance is specified but nothing mentions
about the time, then this section comes into play. This section describes that in
case no specific time is mentioned, then the promisor should deliver the goods
during the usual hours of business.
Illustration:
XYZ college administration
orders for 500 chairs to be delivered on 1st day of Jan, 2022, by
paying the advance payment. The other party accepts the offer. Since the time
is not specified, it should be delivered between 10 am and 3 pm, assuming those
are the regular timings for the college.
If the other party delivers the
order after regular timings of the college, the administration will be no
obligation to accept it.
You may like: Question: Whether a Hindu marriage is a “Sacrament” or a “Contract”? Explain.
3.
When
Performance is to be made on a proper place and time but an application is to
be made by the promisee to the promisor for its performance: (sec 48):
When the terms of the
contract states that a performance of a contract has to be made on a particular
day, but the promisor will only do so when the promisee makes an application to
the promisor on that specific day for performance. Hence, here since it is
specifically mentioned in the contract that the promisee has to request the
promisor for performance on that specific day, he must do so at the proper
place and during the usual business hours as specified by him.
Illustration
Shiv agrees to supply Prachi
50 cartons of alcohol on 3rd November at her office. As per terms of the
contract, Prachi would have to request Shiv for performance. Thus, on the due
date and within usual business hours, Prachi should request Shiv regarding a
time and place for the supply of goods.
4. Where no place is fixed and no application has to be made to the promisor by the promisee (Sec 49):
When a promise is to be performed without application by the promisee
and no place is fixed for the performance, it is the duty of the promisor to
apply to the promisee to appoint a reasonable place for the performance of the
promise and perform the promise at such place.
The place for the
performance of promise implies both the delivery and payment of goods.
Illustration
Sheela entered into a
contract for supplying 100 cartons of Gram Flour to Anu on 5th September at a
specific price. On the due date of performance, Sheela must apply or request
Anu for determining a reasonable place and also make the payment at the same
place.
5.
Performance
in manner or at the time prescribed or sanctioned by the promisee (Sec 50:
When the terms of the contract states that performance has to be made in
the time and manner as specified by the promisee, then it has to be followed.
Illustration
Ankur’s son is in the
hospital and needs money for his son’s operation. Harsh owes money to Ankur and
agrees to repay him in at any place or time decided by Ankur. In this case, Ankur
has the liberty to ask for the performance of the promise in any manner and at
any place or time suited to him.
The consequence of Failure to perform the contract at a fixed time when
the time is essence of the contract
Section 55 of the Indian
Contract Act,1872 deals with the effect of failure to perform the contract at a
fixed time when the time is essence of the contract, whether explicitly or
impliedly.
This section states that if
an act is not done within the stipulated time, the contract becomes voidable at
the option of the promisee provided the Intention of the parties was that time
should be of the essence of the contract.
Here, whether time was the
essence of the contract or not depends on:
I.
Intention of the parties and
II. On the nature of the contract.
In the case of Trailakyanath Maity v. Provabati Santra: the Calcutta
High Court observed: "Whether or not the time is the essence of the
contract, must depend on the facts and circumstances of each case.
In the case of Bishamber Nath Agarwal v. Kishan Chand: It was held that
if any agreement states that a particular act relating to the contracts is to
be done within the particular time or manner, then it should be done in that
time or manner. The other party has no right to manipulate the terms by his
own.
In Bhudra Chand v. Betts
(1915) the defendant promised to deliver an elephant to the plaintiff for the
capture of a wild elephant as a part of Kheda Operations. The contract provided
that the elephant would be delivered on the 1st of October, 1910, but the
defendant obtained an extension of the time till 6th Oct and yet did not
deliver the elephant till 11th. The plaintiff refused to accept the elephant
and sued for damages for the breach.
It was held that the
plaintiff was entitled to recover damages since it was proved that time was the
essence of the contract since the defendant had tried to obtain an extension of
time.
It was held in the case of
China Cotton Exporters v. Beharilal Ramcharan Cotton Mills Ltd (1961) that
in commercial contracts time is ordinarily of the essence of the contract.
For more Contract Law questions, visit this link.
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