CA Foundation Solutions For Business Laws – Performance Of Contract

Performance Of Contract Self-Study Questions And Answers

Question 1. Describe the Obligations of parties to contract Under the Indian Contract Act, of 1872.

Answer:

Performance of Contract: It is one of the modes of discharging the contract. It is the completion or fulfillment of obligations by the respective parties to a contract.

As per Section 37 of the Indian Contract Act, the parties to the contract must either

Perform their respective promises, or
Offer to perform the same unless such performance is dispensed with or excused under the provisions of any other law.

Question 2. By Whom a contract may be performed.

Answer:

Promisor himself: Section 40 states that “if it appears from the nature of the case that it was the intention of the parties to a contract that any promise contained in it needs to be performed by the promisor himself, such promise must be performed by the promisor himself.”
Contracts involving the exercise of personal skill or diligence, or which are formed on the personal confidence between the parties need to be performed by the promisor himself.
Agent: If the contract is not found on the personal consideration, the promisor or his representative may employ a competent person to perform it.
Representatives: Contract involving the use of personal skill or found to be on personal consideration comes to an end on the promisor’s death.
In other cases, the legal representatives of the deceased partner are bound to perform it unless the contrary intention appears from the contract; but their liability is limited to the value of the property they inherit from the deceased.
Third person: As per Section 41, “if the promisee accepts the performance of the promise by a third person, he cannot afterward enforce it against the promisor”.
Joint promisors: In the case of a joint promise, the promisee may compel one or more of the joint promisors in the absence of a contract to the contrary. If any of them dies, his legal representatives must perform the promise jointly with the surviving promisors.

Question 3. Distinguish between Succession and Assignment.

Answer:

Difference between Succession and Assignment

Performance Of Contract Distinguish Between Succession And Assignment.

Question 4. Briefly explain the Effects of refusal to accept an offer of performance.

Answer:

The Effects of refusal to accept an offer of performance

The promisor makes an offer of performance to the promisee, but the offer to perform is not accepted by the promisee.

Question 5. How many types of tender are there and Describe the Cements of Tender?

Answer:

Tender of goods: attempted performance to promise to do something.
Tender of money: attempted performance of a promise to pay something.

Essentials of valid tender:

Must be unconditional.
Must be for the whole obligation.
Must be given at the proper time.
Must be given at proper place.
Must give a reasonable opportunity for inspection.
The party giving tender must be willing to perform his obligation.
Must be paid to the proper person.
Must be made for the exact amount of money.

Question 6. Describe the Effects of the Refusal of the party to perform the promise.

Answer:

The aggrieved party can:

Terminate the contract.
Indicate by words or by conduct that he is interested in its continuance. If the promisee decides to continue the contract, he would not be entitled to put an end to the contract on this ground immediately. In both cases, the promisee would be entitled to claim damages that he suffered as a result of the breach.

Question 7. What are the Liabilities of Joint Promisor and Promisee?

Answer:

Section 42:

If two or more persons have made a joint promise, ordinarily all of them during their lifetime must jointly fulfill the promise. After the death of any of them, his legal representative jointly with the survivor or survivors should do so.

Section 43:

All the joint promisors are jointly and severally liable. However, the contract between joint promisor may provide otherwise.
A joint promisor may claim contributions from other joint promisors if he is compelled to perform the whole promise.
A joint promisor may claim contribution from other joint promisors if any other joint promisor makes a default in the performance of his promise.

Section 44:

Where one of the joint promisors is released, other joint promisors shall continue to be liable.

Question 8. What are the Rights of joint promises?

Answer:

The Rights of joint promises

U/s 45, when a person has made a promise to several persons, then unless a contrary intention appears from the contract, the right to claim performance rests between him and them during their lifetime.
When one of the promisees dies, the right to claim performance rests with the legal representative jointly with the surviving promisees.
When all the promisees die, the right to claim performance rests with their legal representatives jointly.

Question 9. Describe the Time and place of performance of the promise.

Answer:

Time of Performance:

Section 46: Where no time is specified for the performance of the contracts, the performance must be done within a reasonable time.

Day, Hour, and Place of Performance:

Section 47: Where the promisor undertaken to perform a promise on a certain day, he may perform it at any time during the usual hours of business, on that particular day and place as decided by the contract.
Section 48: If a promise is made to perform on a certain day and the promisor has undertaken to perform it without the application by the promisee., the promisee must apply for performance at a proper place and within the usual business hours.
Section 49: If no specific place of performance is fixed by contract, the promisor must apply to the promisee to appoint a reasonable place for performance.

Manner or Mode of Performance:

Section 50: Performance should be made in the manner or at the time prescribed or sanctioned by the promisee.

Question 10. What do you understand by Reciprocal Promise and Performance of Reciprocal Promise?

Answer:

Reciprocal Promise

If the contract consists of reciprocal promises, performance is not necessary unless the second party is willing to perform a reciprocal promise.

Reciprocal promises constitute concurrent conditions and the performance of one of the promises is conditional on the performance of the other, hence both promises should be performed simultaneously.
The order of performance may sometimes be indicated not expressly, but by nature of the transaction, where it is not expressly fixed by contract, they shall be performed in that order which the nature required.
If the contract contains reciprocal promises, the contract becomes voidable if one party to the contract prevents the other from performing his promise and he is entitled to compensation for any loss suffered due to non-performance.
If the contract of reciprocal promises cannot be performed till the other promise is performed, the promisor fails to perform his part, and the promisor cannot claim compensation but has to pay compensation for any loss suffered by the other party.

Section 55: Where a party to a contract promises to do a certain thing at or before the specified time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promisee if parties intended that the time should be the essence of the contract.

If the time was not the essence of the contract and if the contract is not performed at or before the specified time, then the contract does not become voidable but the promisee is entitled to compensation for any loss suffered.
If due to failure of performance of the contract at the agreed time, the contract became voidable, but the promisee accepts performance at any other time, then he is not entitled to any compensation for loss unless he gives prior notice to the promisor of his intention to do so.
A contract cannot be avoided where time is not essential, promisee there is only entitled to compensation for delay.
Even where time was essential, the promisee may waive his right to repudiate the contract and if the promisor fails to perform the promise within the stipulated time, the promisee may accept performance at some other time and is not entitled to any compensation for delay unless he gives prior notice to the promisor of his intention to do so.

If a contract contains a reciprocal promise, first to do certain legal things and secondly, under specified circumstances, to do certain illegal things, the first set of promises is valid while the second being illegal is void agreement.

Question 11. How Many Types of Impossibilities are there?

Answer:

Types of Impossibilities

Section 56: An agreement to do an impossible act is void. Impossibility can be of two types:

Performance Of Contract Types Of Impossibilities

Question 12. Describe the Appropriation of payments.

Answer:

The Appropriation of payments

If the debt to be discharged is indicated while making payment, then payment is to be applied according to instruction.
If the debt to be discharged is not indicated while making payment, the creditor may apply for payment at his discretion to any lawful debt due and payable to him from the debtor whose recovery is not time-barred.
If no appropriation regarding payment is made by both parties, the FIFO basis will apply based on time.

Question 13. Which is a Contract which need not be performed with the consent of both parties?

Answer:

Section 62: If the parties to the contract agree to
- substitute a new contract for it, or
- rescind it, or
- alter it.
Section 63: If the promisee
- dispenses with or remits, wholly or. in part, the performance of the promise made to him.
- extend the time for such performance.
- accepts any satisfaction for it.
Section 64: If the person at whose option it is voidable rescinds the contract.
Section 65: If the agreement contract is discovered to be void, the person who has received advantage under such agreement or contract is required to restore the same or make compensation for it from whom he received it.
Section 66: A rescission must be communicated to the other party like the communication of a proposal.
Section 67: If the promisee neglects or refuses to afford the promisor reasonable facilities for the performance of the promisee, a contract need not be performed.

Question 14. How Many Modes of Discharge of Contract are there?

Answer:

It means termination of contractual relations between the parties to a contract.

Modes of Discharge of Contract:

1. By performance: It occurs when the parties to the contract fulfill their obligations arising under the contract within the time and in a prescribed manner. It may be:

Actual performance
Attempted performance

2. By mutual agreement: The parties may enter into a fresh agreement that provides for the extinguishment of their rights are liabilities of the original contract. Important methods of discharge by fresh contract.

Novation: It occurs when an existing contract is substituted by a new one, either between the same parties or between the new ones.
Rescission: A occurs when only the old contract is canceled and no new contract comes to exist in its place.
Alteration: It occurs when the terms of the contract are so changed by mutual agreement that have the effect of substituting a new contract for the old one.
Remission: It refers to the acceptance of less fulfillment of the terms of the promise.
Waiver: It refers to the abandonment of the rights by the party who is entitled to claim the performance of the contract.
Acceptance: Of any other satisfaction it occurs when the party entitled to claim performance accepts any other satisfaction instead of the performance of the contract.

3. By Lapse of time: It occurs if a contract is not performed within a specified period as prescribed by the Limitation Act, 1963.

4. By operation of law: It occurs when the contract is discharged by operation of law which includes

Material Alteration: Where it is done without the knowledge and consent of the other, the contract can be avoided by the other party.
Insolvency: It can be done under certain particular circumstances.
Death of a promisor: Contract involving the personal skill or expertise of the promisor. When the promisor dies, it cannot be performed by anyone else and hence comes to an end.
Merger of rights: If an inferior right in a contract is merged into a superior right by the party.

Question 15. How Many Types of Impossibilities of Performance or Frustration are there Describe them.

Answer:

Types of Impossibilities of Performance

1. Performance Of Contract Types Of Impossibilities Of Performance

2. Discharge by supervening impossible is done in the following ways:

Death or personal Incapacity
Destruction of the subject – Manner
Non-existence or non-occurrence of certain essential things
Change of law
Declaration of war

3. Discharge by supervening illegality: If after making the contract, its performance becomes impossible due to alteration of law or act of any person, it is discharged.

4. Cases not covered by subsequent impossibility:

Partial impossibility
Commercial impossibility
Difficulty of performance
Default of a third-party
Strikes, Lockouts, etc.

Question 16 Describe the Types of breach of contract.

Answer:

There are Two Types of Breach of Contract:

Actual Breach: If one party defaults in performing his part of the contract on the due date.
Anticipatory Breach: When a person repudiates the contract the stipulated time for its performance has arrived.

Performance Of Contract Objective Questions And Answers

Question 1. State with reasons whether the following statements are Correct or Incorrect:

Payments made by a debtor are always appropriated in chronological order.
Cancellation of a contract by mutual consent of the parties is called a waiver.

Answer:

Incorrect: Payments made by a debtor to the creditor are to be appropriated as per the provisions stated under sections 59 to 61 of the Indian Contract Act.
Incorrect: It is not a waiver but it is called Rescission.

Question 2. State with reasons whether the following statement is Correct or incorrect: In the discharge of the whole claim a party to the contract agrees to accept a lesser amount than due, from the other party is a valid contract despite inadequate consideration.

Answer:

Correct: According to Section 63 of the Indian Contact Act, ‘1872, a party may dispense with or remit wholly or past, the performance of the promise made to him.

Thus, a promise to accept a lesser amount than due, from the other party is a valid contract despite the inadequate consideration.

Question 3. State with reasons whether the following statement is Correct or Incorrect: If the promises are joint, the right to claim performance is joint and not joint, and several.

Answer:

Correct: Section 45 of the Contract Act lays down that when a person has made a promise to two or more persons jointly, then unless a contrary intention appears from the contract, the right to claim performance rests, as between him and them, with them during their joint lives.

And after the death of any of them With the representatives of such deceased person jointly with the survivor or survivors, and after the death of the last survivor, with representatives of all jointly.
This rule is applicable subject to contrary intention being shown by the contract. Accordingly, all the joint promisees should sue the promisor jointly and not jointly and several.

Question 4. State with reasons whether the following statement is Correct or Incorrect: A promise to pay a time-barred debt is not enforceable.

Answer:

A promise to pay a time-barred debt is enforceable, if it is in writing and signed by the promisor or by his agent authorized to do so. The promise may be to pay the whole or any part of the debt [Section 25(3) Indian Contract Act, 1872].

Question 5. State with reasons whether the following statement is Correct or Incorrect: Reciprocal promises to do certain things legal and other illegal, make such promises void.

Answer:

Corrects: Where persons reciprocally promise to do certain things legally and to do certain things illegal, the set to do the things legal is a contract, but to do the things illegal is void agreement (Section 57 of Indian Contract Act, 1872).

Question 6. State with reasons whether the following statement is correct Incorrect: The original contract between the parties must be performed even when the parties agree to substitute it with a new contract.

Answer:

Incorrect: According to Section 62 of the Indian Contract Act, 1872, if the parties to a contract agree to substitute a new contract for the old contract, or to rescind or alter it, the original old contract is not required to be performed since substitution means rescinding the old contract or altering the terms in the old contract. The discharge of old contracts is a consideration for the new ones.

Performance Of Contract Short Notes

Question 1. Write a short note on the appropriation of payment.

Answer:

Appropriation of Payments: Sections 59 to 61 of the Contract Act, of 1872 enacted the rules of appropriation of payment of English Law as laid down in Clayton’s case with certain modifications, which may be reproduced below:

Application of Payment where debt to be discharged is indicated (Section 59): Where a debtor, owing several distinct debts to one person, makes a payment to him either with express intimation or under circumstances Implying that the payment is to be applied to the discharge of sotto particular debt, the payment, If accepted, must be applied accordingly.
Application of payment where debt to be discharged Is not Indicated (Section 60): Whoro the debts has omitted to Intimate and there are no other circumstances Indicating to which debt the payment Is to be applied, the creditor may apply It at his discretion to any lawful debt due and payable to him from the debtor, whether Its recovery Is or Is not barred by the law In force for the time being os to the limitation of suits.
Application of payment where neither party appropriates (Section 61): Whoro neither party makes any appropriation, the payment shall be applied In the discharge of the debts In order of time, whether they are or are not barred by the law in force for the time being as to the limitation of suits. If the debts are of equal standing, the payments shall be applied in the discharge of each proportionately.
Appropriation towards Interest: When the debtor makes a part payment without indicating the appropriation (whether towards principal or interest) in such cases, the payment must first be adjusted towards interest and the balance towards the principal amount.

Question 2. Write a short note on Rescission

Answer:

Rescission: Rescission is the electing to avoid a contract and treat it as not binding when it is void or voidable or terminable by a party. It means when a contract is broken by one party, the other party may treat the contract as rescinded.

In such a case is absolved of all his obligations under the contract as rescinded. In such a case is absolved of all his obligations under the contract and is entitled to compensation for any damages that he might have suffered.

Rescission may occur:

By mutual consent of the parties, or
Where it partly falls In the performance of his obligation, the other party may rescind the contract without proudly to his right to claim compensation for the breach of contract, or
By the party whose consent has not been given freely.

Rescission may be total or partial. Total rescission is the discharge of the online contract. Partial rescission Is the variation of the original contract by

rescinding some of the terms of the contract or
substituting new terms for the ones which are rescinded, or adding new terms without rescinding any of the terms of the original contract.

Question 3. Write a short note on Appropriation Is a right primarily of the debtor and for his benefit.

Answer:

Appropriation Is a right primarily of the debtor and for his benefit

When a debtor who owes several debts to the same creditor makes a payment that is insufficient to satisfy the whole Indebtedness, a problem arises as to how to appropriate the given payment. Sections 59 to 61 of i.e. Indian Contract Act, of 1872 lay down the following rules:

if the debtor expressly states that the payment made by him is to be applied to the discharge of some particular debt, the creditor must act accordingly.
if there are no express instructions, then the debtor’s implied intention should be gathered from the circumstances adhering to the payment and the appropriation must be done accordingly.
if there are no express or implied directions of the debtor thorn the creditor had the option to apply the payment to any debt lawfully due from the debtor including times observed debt (Clayton’s case).
where the debtor as well as the creditor had not made the appropriation. Then the payment is to be applied to the discharge of the debts in order of time,’ whether or not they are time-barred. If the debts are of equal standing, the payment shall be applied In the discharge of each proportionately.
if payment has been made without opposingly stating whether it is interest or principal, payment is to be applied towards interest first and then the balance to principal.

Thus, it is quite clear from the above that it is always not the case where appropriation is a right primarily of the debtor and for his benefit. It depends upon the circumstances of a particular case.

Question 4. Write a short note on Reciprocal promises that are to be performed simultaneously.

Answer:

Reciprocal promises that are to be performed simultaneously

According to Section 51 of the Indian Contract Act, of 1872 “when a contract consists of reciprocal promises to be simultaneously performed, no promisor need to perform his promise unless the promisee is ready and willing to perform his reciprocal promise”.

When the parties agree that the performance of the contract by each part is to be simultaneous, it is necessary that in exchange for the performance of the contract by one party the other party should also be in a position to give simultaneous performance, i.e. he should be ready and willing to perform his reciprocal promise.
In a contract, of sale of goods, unless otherwise agreed, the delivery of the goods and the payment of the price are concurrent conditions, that is to say, the seller shall be ready and willing to give possession of the goods to the buyer in exchange for the price and the buyer shall be ready to pay the price in exchange for possession of the goods.
Readiness and willingness to perform the contract do not mean that the buyer should have the hard cash in his- person, or the seller should always continue to have a ready stock of the goods after the making of the contract.
It is enough that the buyer, has made arrangements to make the payment, which can be done without undue delay, and the seller on his part arranged for the goods which can be delivered soon after the payment is made.
It is of course, necessary that the person should have the ability to perform the contract. If a person is merely mentally prepared or willing to perform the contract but cannot do so, the other party need not perform the contract.

Thus a person who becomes insolvent does not have means of payment in exchange for the goods, he is deemed to be not ready and willing to perform the contract.

Question 5. Write short notes on the following: State the rules of appropriation of payments, when:

The order of discharge of debts is indicated;
The order is not indicated.

Answer:

As a normal rule, the debtor while making payment of debts should indicate to the creditor the order of payment or appropriation. This is needed in case several debts are payable by a debtor to his creditor.

However, the debtor might not indicate the order or payment for one reason or the other, in such cases, the rules laid down in the Indian Contract Act, of 1872 apply.
Section 59, lays down, “Where a debtor, owing several distinct debts to one person makes a payment to him either with express intimation or under circumstances implying that the payment is to or applied to the discharge of some particular debt, the payment, if accepted, must be applied accordingly.”

Thus in the instance case, the debtor has indicated the order of discharge of debts, the creditor has no other alternative except to appropriate the amount received by him according to the order indicated by the debtor.

In the second case i.e., where the debtor does not indicate or has not indicated the order of discharges of debts, Section 60 of the Act, makes the position clear. According to this Section 60, “Where the debtor has omitted to intimate and there are no other circumstances indicating to which debt the payment is to apply.
The creditor may apply the money received at his discretion to any lawful debt due and payable to him from the debtor whether its recovery is or is not barred by the law in force for the time being as to the limitation of suits.”
Thus it is clear that in the second case, provisions of Section 60 shall apply and the creditor shall be within his rights to appropriate the money against the debts if any barred by law of limitation.

However, if there are several debts due on the same date and the debtor has not indicated the order of payment, the creditor shall have to apply the money proportionately in the discharge of these debts.

Question 6. Write a short note on the Doctrine of Frustration

Answer:

The doctrine of Frustration: Part 2 of Section 56 of the Indian Contract Act, 1872 lays down that if the performance of a contract becomes impossible or unlawful after its making due to some event which is beyond the control of the parties, such contract becomes void when such event has accrued. This is known as the doctrine of frustration. The performance may become impossible legally or physically.

The following are the causes of frustration:

Destruction of the subject matter of the contract.
Death or personal incapacity of the party.
Cancellation of an expected event.
Subsequent legal changes.
Declaration of war.

Distinguish Between Performance Of Contract

Question 1. Briefly explain the distinction between Succession and Assignment.

Answer:

The distinction between Succession and Assignment

Distinguish between Succession and Assignment: When the benefits of a contract are succeeded to be a process of law, then both the burden and benefits attaching to the contract may sometimes devolve by the legal heir.

Suppose, a son succeeds to the estate of his father after his death, he will be liable to pay the debts and liabilities of his father owed during his lifetime.
But if the debts owed by his father exceed the value of the estate inherited by the son then he would not be called upon to pay the excess.
The liability of the son will be limited to the extent of the property inherited by him. In the matter of assignment, however, the benefit of a contract can only be assigned but not the liabilities thereunder.
This is because then the liability is assigned, and a third party gets involved therein.

On the other hand, if a creditor assigns the benefits of a promise, he thereby entitles the assignee to realize the debts from the debtor but where the benefits are coupled with liability or when a personal consideration has entered into the making of the contract then the benefit cannot be assigned.

Question 2. Briefly explain the distinction between Innovation and Alteration.

Answer:

Novation and Alteration: The law about novation and alteration is contained in Sections 62 to 67 of the Indian Contract Act, of 1872. In both these cases, the original contract need not be performed. Still, there is a difference between these two:

Novation means the substitution of an existing contract with a new one. Novation may be made by changing the terms of the contract or there may be a change in the contracting parties. But in case of alteration, the terms of the contract may be altered by mutual agreements by the contracting parties but the parties to the contract will remain the same.
In case of novation there is altogether, a substitution of a new contract in place of the old contract. But in case of alteration, it is not essential to substitute a new contract in place of the old contract. In alteration, there may be a change in some of the terms and conditions of the original agreement.

Question 3. Briefly explain the distinction between Recession and Alteration.

Answer:

Rescission and Alteration: Rescission means cancellation of the contract. If by mutual agreement the parties agree to cancel all or some of the terms of the existing contract.

It is called rescission of the contract, and then the contract is discharged. A contract can be rescinded before its performance becomes due. Non-performance of a contract by both parties for a long period, without any complaint, amounts to implied rescission.
Rescission may be total or partial. When all the terms of the contract are canceled, it is total rescission which results in the discharge of the entire contract. When some of the terms are canceled and some new terms are added, it is partial rescission.
Partial rescission results in the variation of the original contract. Section 62 of the Indian Contract Act, of 1872 lays down that if the parties to a contract agree to rescind it, the original contract need not be performed.
The alteration, on the other hand, means making a change in the terms of the contract with the consent of all the parties. Alternation discharges the old terms which have been changed and the parties become bound by the original contract with altered terms.

Rescission of the contract may be total or partial but alteration is always partial and the original contract can not be altered wholly. The effect of alteration is the same as laid down in Section 62 of the Indian Contract Act, 1872 i.e. the original contract need not be performed.

Question 4. Differentiate between Novation and Alteration as per The Indian Contract Act, of 1872.

Answer:

Difference between Novation and Alteration:

Performance Of Contract Difference Between Novation And Alteration

Performance Of Contract Descriptive Questions And Answers

Question 1. What is “Supervising Impossibility”? What are its effects on the contract?

Answer:

“Supervising Impossibility”

An impossibility that makes the performance of a contract impossible or illegal, by the occurrence of an unexpected event or a change of circumstances beyond the contemplation of parties, is called Supervising Impossibility.

It may arise on account of more than one reason, which may be enumerated below:

Accidental destruction of the subject matter of the contract, such as loss of property by the occurrence of accidental fire, death of an artist, or incapacity of an artist by long illness.
Non-existence or non-occurrence of a particular state of things, For Example.. postponement of the music concert for which the hall was rented out.
Incapacity to perform a contract of personal services illness.
Change in law, For Example. acquisition of the property by the government.
The outbreak of war makes the contracting parties citizens of enemy countries.

Effects: Supervising impossibility makes the contract void and the parties are released from their obligations. They need not perform their part of the promises which have not accrued till the date of the impossibility.

Question 2. State in brief the grounds upon which a contract may be discharged.

Answer:

Discharge of contracts: A contract is discharged when the obligation created by it comes to an end. A contract may be discharged in any one of the following ways:

Discharge by performance: It takes place when the parties to the contract fulfill their obligations arising under the contract within the time and in the manner prescribed. Discharge by performance may be
1. Actual performance or
2. Attempted performance.
  - Actual performance is said to have taken place; when each of the parties has done what he has agreed to do under the agreement. When the promisor offers to perform his obligation, but the promisee refuses to accept the performance, it amounts to attempted performance or tender of performance.
Discharge by mutual agreement: Section 62 of the Indian Contract Act provides if the parties to a contract agree to substitute a new contract for it, or to refund or remit or alter, the original contract need. not be performed. These principles come in the heads of novation, rescission, alteration remission, accord, and satisfaction, owing to the occurrence of an event and waiver.
By impossibility of performance: The impossibility may exist from its initial stage. In that case, it would be impossible an initiate. Alternatively, there may be supervening impossibility which may take place owing to
1. an unforeseen change in law;
2. the destruction of the subject matter essential to that performance;
3. the non-existence or non-occurrence of a particular state of things, which was naturally contemplated for-perfQrming the contract, as a result of some personal incapacity like dangerous malady; the declaration of war (Section 56).
Discharge by lapse of time: A contract should be performed within a specified period as prescribed by the Limitation Act, 1 963. If it is not performed and if no action is taken within the specified period of limitation, the party is deprived of remedy at law. For example, if a creditor does not file a suit against the buyer for recovery of the price within three years, the debt becomes time-barred and hence not recoverable.
Discharge by operation of law: A contract may be discharged by operation of law which includes by the death of the promisor, merger of inferior right in the superior right by which the inferior right vanishes, by complete loss of evidence, by insolvency, etc.
Discharge by breach of contract: Breach of contract may be an actual breach of contract or anticipatory breach of contract. If one party defaults in performing his part of the contract on the due date, he is said to have committed a breach thereof.
- When on the other hand, a person repudiates a contract before the stipulated time for its performance has arrived, he is deemed to have committed an anticipatory breach. If one of the parties to a contract breaks the promise the party injured thereby, has not only a right of action for damages but he is also discharged from performing his part of the contract. (Section 64).
Remission accord and satisfaction: A promise may dispense with or remit the performance of the promise made to him or may accept any satisfaction of things fit. In the first case, the contract will be discharged by remission and in the second by accord and satisfaction.
Refusal to afford reasonable facilities: If any promisee, neglects or refuses to afford the promisor reasonable facilities for the performance of his promise, the promisor is excused by such neglect or refusal as to any non-performance caused thereby.

Question 3. Is it required that parties to the contract must perform the contract personally?

Answer:

Who must perform the contract: Except the contracts which require personal skill and labor, the promise under a contract may be performed by the following persons:

Promisor himself: If it appears from the nature of the case that it was the intention of the parties to any contract, that any promise contained in it should be performed by the promisor himself, such promise must be performed by the promisor. Contracts involving personal skill or those depending upon personal trust and confidence must be performed by the promisor himself (Sec. 40).
Agent: Where personal consideration is not the foundation of a contract, the promisor or his representatives may employ a competent person to perform it (Section 40).
The Legal Representatives: Promises bind the representatives of the promisors in case of the death of such promisors before performance, unless a contrary intention appears from the contract.
- On the death, of the promisor, the promisee can compel his legal representatives to perform the promise unless it involves the personal skill of the promisor.
- However, the liability of the legal representative will not be personal but shall be limited only to the extent of the value of the estate of the deceased promisor inherited by him. (Section 37).
Third Persons: When the promisee accepts the performance of the promise from a third person, he cannot afterward enforce it against the promisor. That is, performance by a stranger, accepted by the promisee, produces the result of discharging the promisor, although the latter has neither authorized nor ratified the act of the third, party (Section 41).
Joint Promisors: When two or more persons have made a joint promise, then unless a contrary intention appears from the contract, all such persons must jointly fulfill the promise.

If any of them dies, his legal representatives must, jointly with the surviving promisors, fulfill the promise. If all of them die, the legal representatives of all of them must fulfill the promise jointly (Section 42).

Question 4. Explain the rules under the law of contract as regards to time and place for the performance of the promise.

Answer:

Time and place for the performance of the promise: Sections 46 to 50 of the Indian Contract Act, 1872 are relevant regarding the time and place for the performance of the promise which is as follows:

If no time is specified, the promise must be performed within a reasonable time. The expression ‘reasonable’ time is interpreted having regard to the facts and circumstances of a particular case (Section 46).
If a promise is to be performed on a specified date but an hour is not mentioned, the promisor may perform it at any time during the usual hours of business, on such day. Moreover, the delivery must be made at the usual place of business (Section 47).
Where no place is fixed, the promisor has to ask the promisee to fix a reasonable place for the performance of the promise. In all cases, the promisor must apply to the promisee.
Here no distinction is made between an obligation to pay money to the promisee; here no distinction is made between an obligation to pay money and an obligation to deliver goods or discharge any other obligation [Section 49].
The foregoing rules regarding the time and place for the performance of the promise apply, only when the promisor undertakes to perform the promise without an application being made by the promisee.
Where the promisor has not undertaken to perform the promise without an application by the promisee, and the promise is to be performed on a certain day the promisee must apply for performance at a proper place and within the usual hours of business (Section 48).

Generally, the performance of any promise may be made in any manner, or at any time which the promisee prescribes or sanctions.

Question 5. State the circumstances under which an agreement may be void; since it is impossible to carry it out.

Answer:

Impossibility of Performance [Section 56 of the Indian Contract Act, 1872]: An agreement may be void since it is impossible to carry it out.

A contract to do an act, which after the contract is made, becomes impossible, or, because of some event which are promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful under the following cases:

Impossibility existing at the time of contract:
- if known to the parties.
- if unknown to the parties.
- if known to the promisor only.
Supervening impossibility (arising after the formation of a contract) like destruction of subject matters, non-existence or non-occurrence of a particular state of things incapacity to perform a contract of personal services or change of law, or outbreak of law or failure of the ultimate purpose.

Question 6. What is meant by the Performance of a Contract? By whom the contract can be performed?

Answer:

Performance of a Contract

Performance of contract consists of doing or causing to be done, that which the promisor has promised shall be done. Performance of the contract is the completion of a legal obligation that arises out of the contract.

Every party to the control is obliged to perform the contract accordingly unless it is discharged or exempted from the performance.
The parties to a contract must either perform or offer to perform, their respective promises, unless such performance is disposed with or excused under the provisions of the law of contract or any other law. (Section 37 Indian Contract Act, 1872).
So that a party could enforce the promises made to him, he should perform his promise or offer to perform then he can ask the other party to perform his promise unless a contrary intention appears from the contract.

Either performance or readiness and willingness to perform the contract is the basic requirement of this section.

By whom contract must be performed?

The promise under a contract may be performed, as the circumstances may permit, by the promisor himself, or by his agent or his legal representative.

Promisor himself: If there is something in the contract to show that there was an intention of the parties, that the performance should be made personally, such promise must be performed by the promisor (Section 40). Such contracts involve personal skill or diligence.
Agent: Where personal consideration is not required, the promisor or his representative may employ a competent person to perform (Section 40).
Representatives: Except the contract which involves personal skill and diligence all contracts may be performed by the legal representatives of the deceased promisors unless a contrary intention appears from the contract (Section 37).
However, their liability under a contract is limited to the value of the property they inherit from the deceased. Where personal skill and diligence are the foundation of the performance such contracts come to an end on the death of the promisor.
Third Persons: When a promisee accepts performance from a third person, he can not afterward enforce it against the promisor (Section 41).
Joint Promisors: When two or more persons have made a joint promise, then, unless a contrary intention appears by the contract all such persons, during their joint lives, and after the death of any of them, his representatives jointly with the survivor or survivors, and after the death of the lost survivor, the representatives of all jointly must fulfill the promise (Section 42 of the Indian Contract Act).

Question 7. When a contract may be discharged by Operation of Law?

Answer:

A contract may be discharged by the operation of law in the following manner:

By death: In a contract involving personal skill and or ability, the contract is terminated on the death of the promisor. In other contracts, the rights and liabilities of a deceased person pass on to the legal representatives of the deceased person.
By merger: Merger takes place when an inferior right accruing to a party under a contract merges into a superior right accruing to the same party under the same or some other contract.
By insolvency: When a person is adjudged insolvent he is discharged from all liabilities incurred before his adjudication.
By unauthorized attraction of the terms of a written agreement: Where a party to a contract makes any material alteration in the contract without the consent of the other party, the other party can avoid the contract.
A material alteration is one that changes, in a significant manner, the legal identity or character of the contract or the rights and liabilities of the parties to the contract.
By rights and liabilities becoming vested in the same person: Where the liabilities and rights under a contract vest in the same person, for example, when a bill gets into the hands of the acceptor, the other parties are discharged.

Question 8. State the rules of appropriation of payments, when:

the order of discharge of debts is indicated;
the order is not indicated.

Answer:

However, the debtor might not indicate the order or payment for one reason or the other. In such cases, the rules laid down in the Indian Contract Act, of 1872 apply.
Section 59, lays down, “Where a debtor, owing several distinct debts to one person makes a payment to him either with express intimation or under circumstances implying that the payment is to or applied to the discharge of some particular debt, the payment if accepted, must be applied accordingly.”

In the second case i.e. where the debtor does not indicate or has not indicated the order of discharges of debts, Section 60 of the Act, makes the position clear. According to this Section 60, “Where the debtor has omitted to intimate and there are no other circumstances indicating to which debt the payment is to apply, the creditor may apply for the money.
Received at his discretion to any lawful debt due and payable to him from the debtor whether its recovery is or is not barred by the law in force for the time being as to the limitation of suits.”
Thus it is clear that in the second case, provisions of Section 60 shall apply and the creditor shall be within his rights to appropriate the money against the debts if any barred by law of limitation.

Question 9. State and explain the various modes whereby a contract may come to an end.

Answer:

Various modes whereby a Contract comes to an end: A contract may be discharged either by an act of the parties or by an operation of law as stated below:

Discharge by performance: When the parties to the contract fulfill their part of the promo, the contract comes to an end.
Discharge by mutual agreement: When the parties to the contract agree not to perform the contract based on the principles of recession, or narration alteration or remission, the original contract comes to an end.
Discharge by impossibility of performance: When the performance of the contract becomes impossible owing to
- An unforeseen change in law or
- The destruction of the subject matter essential to the performance of the contract, or
- The non-existence or non-occurrence of a particular state of things such as personal incapacity like illness or meeting with an accident or
- The outbreak of war and the party being declared as an alien enemy.
Discharge of lapse of time: Where a contract is to be performed within a special time and it is not performed within that time or period, the law of limitation applies and the contract comes to an end For Example. creditor not taking any action against the debtor for the recovery of the debt within 3 years.
Discharge by operation of law: Where law operates in the non-performance of a contract say death of the promisor or insolvency or merger etc.
Discharge by breach of a contract: Where the party to the contract makes a default in the performance of the contract.
Discharge by waiver on the part of either party.
Discharge by not providing reasonable facilities for performance by the party to the contract.

Question 10. Explain with examples the principles of Novation, Rescission, Alteration, and Remission where contracts need not be performed.

Answer:

Novation, Rescission, Alteration and Remission:

1. Novation (Section 62): Novation means the substitution of a new contract for the original contract. Such a new contract may be either between the same parties or between different parties. The consideration for the new contract Is the discharge of the original contract.

Example: A Owns B ₹ 10,000/-. A agrees with B and gives B a mortgage or his (A’s) estate for ₹ 5,000/- in place of the debts of ₹ 10,000/. This is a new contract and extinguishes the old.

2. Rescission (Section 62): Rescission means cancellation of the contract by any party or all the parties to a contract.

Examples: X promises Y to sell and deliver 100 Bales of cotton on 1^st October at his godown and Y promises to pay for goods on 1^st November. X does not supply the goods. Y may rescind the contract.

3. Alteration (Section 62): Alteration means a change in the terms of a contract with the mutual consent of the parties. Alteration discharges the original contract and creates a new However, parties to the new contract must not change the contract.

Example: X promises to sell and deliver 100 bales of cotton on 1^st October and Y Promises to pay for goods on 1^st November. Afterward, X and Y mutually decide that the goods shall be delivered in five equal installments at Z’s godown. Here, an original contract has been discharged and a new contract has come into effect.

4. Remission (Section 63): Remission means acceptance, by the promisee of a lesser fulfillment of the promise made. According to Section 63, “Every promisee may dispense with or remit, wholly or in part, the performance of the promise made to him, or may extend the time for such performance, or may accept; instead of it any satisfaction which he thinks fit”.

Example 1: A promises to paint a picture for B. B afterward forbids him to do so. A is no longer to perform the promise.

Example 2: A owes B ₹ 5,000/- A pays to B, and B accepts, in satisfaction of the whole debts, ₹ 2,000/- paid at the time and place at which ₹5,000/- were payable. The whole debt is charged.

Example 3: A owes B, under a contract a sum of money, the amount of which has not been ascertained. A, without ascertained. A, without ascertaining the amount, gives to B, and B, in satisfaction thereof, v accepts the sum of ₹ 2,000/. This is a discharge of the whole debt, whatever may be its amount.

Question 11. Explain any five circumstances under which contracts need not be performed with the consent of both parties.

Answer:

As per the given sections of the Contract Act, 1 872 the circumstances under which contracts need not be performed with the consents of both parties are as follows:

Section-62: If the parties to the contract agree to
- Substitute a new contract for it or
- rescind it Or
- alter it.
Section-63: If the promisee k
- Dispenses with or remits, wholly or in part, the performance of the promise made to him.
- Extend the time for such performance.
- Accepts any satisfaction for it
Section-64: If the person at whose option it is voidable rescinds the contract.
Section-65: If the agreement contract is discovered to be void, the person who has received advantage under such agreement or contract is required to restore the same or make compensation for it from whom he received it.
Section-66: A rescission must be communicated to the other party like the communication of the proposal.
Section 67: If the promisee neglects or refuses to afford the promisor reasonable facilities for the performance of the promises, the contract need not be performed.

Question 12. X and Z are partners in a firm. They jointly promised to pay ₹ 3,00,000 to D. Y become insolvent and his private assets are sufficient to pay 1/5 of his share of debts. X is compelled to pay the whole amount to D. Examining the provisions of the Indian Contract Act, of 1872, decide the extent to which X can recover the amount from Z.

Answer:

According to Section 43 of the Indian Contract Act, of 1872, when two or more persons make a joint promise, the promisee may, in the absence of express agreement to the contrary, compel anyone or more of such joint promisor to perform the whole of the promise.

Also, each of two or more joint promisors may compel every other joint promisor to contribute equally to the performance of the promise, unless a contrary intention appears from the contract.
In other words, if one of the joint promisors is made to perform the whole contract, he can call for a contribution from others.
It also says that if any one of two or more joint promisors makes a default in such contribution, the remaining joint promisor must bear the loss arising from such default in equal shares.
In the given case X, Y, and Z jointly promised to pay ₹ 3,00,000 to D. Y could pay only ₹ 20,000 (i.e. 1/5 of ₹ 1,00,000), hence loss due to his default i.e. 80,000 will be borne equally by X and Z.

Now since X is compelled to pay the entire amount, he can call for contribution from Z of his share i.e. ₹ 1,00,000. Thus, the extent to which X can recover the amount from Z is ₹ 1,40,000.

Question 13. Mr. X and Mr. Y entered into a contract on 1^st August 2018, by which Mr. X had to supply 50 tons of sugar to Mr. Y at a. certain price strictly within 10 days of the contract. Mr. Y also paid an amount of ₹ 50,000 towards advance as per the terms of the above contract. The mode of transportation available between their places is roadway only. A severe flood came on 2^nd August, 201 8 and the only road connecting their places was damaged and could not be repaired within fifteen days. Mr. X offered to supply sugar on 20^th August, 201 8 for which Mr. Y did not agree. On 1^st September 2018, Mr. X claimed compensation, of ₹ 10,000 from Mr. Y for refusing.to accept the supply of sugar, which was not there within the purview of the contract. On the other hand, Mr. Y claimed a refund of ₹ 50,000, which he had paid in advance in terms of the contract. Analyse the above situation in terms of the provisions of the Indian Contract Act, of 1872 and decide on Y’s contention

Answer:

According to the facts of the case, it can be observed that the contract entered into by the parties Mr. X and Mr. Y demonstrates a case under the applicability of the provisions of Section 56 of the Indian Contract Act, 1872 that States – “A contract to do an act which after the contract is made becomes impossible because of some event which the promisor could not prevent becomes void.”

In this case, Mr. X has promised to supply 50 tons of sugar to Mr. Y for which Mr. Y has paid an amount of t 50,000 in advance according to the terms of the contract.
However, due to a severe flood, the only mode of transportation available between their places is damaged which makes the execution of the delivery of 50 tons of sugar to Mr. Y impossible within the stipulated time.
Now Mr. X claims compensation of ₹ 10,000 from Mr. Y for non-acceptance of delivery after the expiry of the stipulated time
Period but since the contract has already gone void due to the impossibility of performance within the stipulated time – period there remains no legal room for demanding compensation.

But at the same time the contention of Mr. Y for a refund of his previously advanced sum of ₹ 50,000 stands valid as under the provisions of the Indian Contract Act,1872 if a contract turns void due to any specific reason’ then all previously advanced sums have to be refunded.

Question 14. Mr. Rich aspired to get a self-portrait made by an artist He went to the workshop of Mr. C an artist and asked whether he could sketch the former’s portrait on an oil painting canvas. Mr. C agreed to the offer and asked for ₹ 50,000 as full advance payment for the above creative work. Mr. C clarified that the painting shall be completed in 10 sittings and shall take 3 months.

On reaching the workshop for the 6th sitting, Mr. Rich was informed that Mr. C became paralyzed and would not be able to paint shortly. Mr. C had a son Mr. K who was still pursuing his studies and had not taken up his father’s profession yet. Discuss in light of the Indian Contract Act 1872.

Can Mr. Rich ask Mr. K to complete the artistic work instead of his father?
Could Mr. Rich ask Mr. K for a refund of money paid in advance to his father?

Answer:

A contract that involves the use of personal skill or is founded on personal consideration comes to an end on the death or inability of the promisor.

As regards any other contract, the legal representatives of the promisor are bound to perform unless the contrary intention appears from the contract.
A contract is discharged by the impossibility of performance. Impossibility may be created due to several factors, one of which may be as a result of some personal capacity like a dangerous malady.

In the given case, the promisor (Mr. C) got paralyzed during the performance of a contract, due to which further performance of the contract becomes impossible and the contract becomes void.

Mr. Rich, cannot ask Mr. K to complete the artistic work instead his father Mr. C as a legal representative is not responsible for performing in case, of contracts involving personal skill.
Mr. Rich cannot ask Mr. K to refund the amount as the contract becomes void and unenforceable due to the impossibility of performance.

Question 15. Mr. Sonumal a wealthy individual provided a loan of ₹ 80,000 to Mr. Datumal on 26.02.201 9. The borrowerMr. Datumal asked for a further loan of ₹ 1,50,000. Mr. Sonumal agreed but provided the loan in parts on different dates. Did he provide ₹1,00,000 on 28.02.2019 and the remaining ₹ 50,000 on 03.03.2019?

On 10.03.2019 Mr. Datumal while paying off part ₹ 75,000 to Mr. Sonumal insisted that the lender should adjust. 50,000 towards the loan taken on 03.03.2019 and the balance as against the loan on 26.02.2019.

Mr. Sonumal objected to this arrangement and asked the borrower to adjust in the order of data of borrower of funds, Now you decide:

Whether the contention of Mr. Datumal correct or otherwise as per the provisions of the Indian Contract Act, 1 872?
What would be the answer in case the borrower does not insist on such an order of adjustment of repayment?
What would the mode of adjustment or appropriation of such part payment be in case neither Mr. Sonumal nor Mr. Datumal insists on any order of adjustment on their part?

Answer:

Sometimes, a debtor owes several to the same creditor and makes payments which is not sufficient to discharge all the debts. In such cases, the payment is appropriated as per provisions of Sections 59 to 61 of the Indian Contract Act.

Application of Payment where debt to be discharged is indicated: Where a debtor, owing several distinct debts to one person, makes a payment to him either with express intimation or that the payment is to be applied in discharge of some particular debt, the payment if accepted, must be applied accordingly.
Application of Payment where debt to be discharged is not indicated: Where the debtor has omitted to intimate that payment is to be applied in the discharge of which debt, then the creditor may apply it at his discretion to any lawful debt actually due to him from the debtor (even where it is barred by law).
Application of Payment where neither party appropriates: Where neither party makes any appropriation, the payment shall be applied in discharge of the debts in order of time, whether or not they are barred by limitation. If the debts are of equal standing, the payment shall be applied in the discharge of each proportionately.

In the given case the debtor while making the part payment has indicated the debt in which the adjustment is to be made accordingly:

Contention of Mr. Datumal is correct as per provisions of the Act, to indicate the debt to be adjusted.
If the borrower does not insist on any order of adjustment of repayment, then the lender at his discretion may adjust any debt he wants.
In case neither of them appropriates, then repayment will be adjusted to the debt first in time.

Question 16. In light of provisions of the Indian Contract Act, of 1872 answer the following:

Mr. S and Mr. R made a contract wherein Mr. S agreed to deliver a paper cup manufacturing machine to Mr. R and to receive payment on delivery. On the delivery date, Mr. R didn’t pay the agreed price. Decide whether Mr. S is bound to fulfill his promise at the time of delivery.
Mr. Y gave a loan to Mr. G of INR 30,00,000.Mr. G defaulted on the loan on the due date and the debt became time-barred. After the time-barred debt, Mr. G agreed to settle the full amount to Mr. Y. Whether acceptance of the time-barred debt Contract is enforceable in law?
A and B entered into a contract to supply a unique item, the alternative of which is not available in the market. A refused to supply the agreed unique item to B. What directions could be given by the court for breach of such contract?

Answer:

1. According to the Indian Contract Act, of 1872

In the given case Mr. S and Mr. R made a contract wherein Mr. S agreed to deliver a paper cup manufacturing machine to Mr. R and give payment on delivery. On the delivery date, Mr. R didn’t pay the agreed price.

Thus Mr. S is free from his obligation and he is not bound to deliver the manufacturing machine to Mr. R.

2. In this case, Mr. Y gave a loan to Mr. G of INR 30,00,000. Mr. G defaulted on the loan on the due date and the debt became time-barred. After time-barred debt, Mr. G agreed to settle the full amount to Mr. Y.

Thus acceptance of a time-barred debt is enforceable under section(25) of the Indian Contract Act, of 1872. Which states that this agreement to pay a time-barred debt is enforceable even without consideration.

3. A and B entered into a contract to supply unique items the alternative of which is not available in the market. A refused to supply the agreed unique item to B. This court can order A for specific performance and can order him to make the good available to B as it is a unique item only available to him.

Question 17. X, Y, and Z jointly borrowed ₹ 90,000 from L. Decide each of the following in the light of The Indian Contract Act, 1 872:

Whether L compel only Y to pay the entire loan of ₹ 90,000?
Whether L can compel only the legal representatives of Y to pay the loan of ₹ 90,000 if Z, Y, and Z die?
Whether Y and Z are released from their liability to L and X is released from his liability to Y and Z for contribution, if L releases X from his liability and sues Y and Z for payment?

Answer:

If a promise is made by two or more persons (called joint promisors) then the promisee may compel anyone or more of the joint promisors to perform the whole contract. Liability under a joint promise is both joint as well as several. Thus, in this case, L can compel only Y also to pay the whole amount of ₹ 90,000/.
If a promise is made by two or more persons (called joint promisors) and all of them die then their liability will be borne by the legal representatives and all the legal heirs will be jointly and severally liable for the same. Thus, in this case, L can compel only Y to pay the entire loan of ₹ 90,000.
If a promisee discharges/releases one of the several joint promisors, it does not discharge other joint promisors and the joint promisor so discharged remains liable to the other joint promisor. thus, in this case, X will not be released from his liability towards Y and Z even though he is released by’L from contributing.

Question 18. A, B, C, and D are the four partners in a firm. They jointly promised to pay ₹ 6,00,000 to F. B and C have become insolvent. B was unable to pay any amount and C could pay only ₹ 50,000. A is compelled to pay the whole amount to F. Decide the extent to which A can recover the amount from D about the provisions of the Indian Contract Act, of 1872.

Answer:

According to section 43 of the Indian Contract Act, of 1872, when two or more persons make a joint promise, the promises may, in the absence of express agreement to the contrary, compel everyone or anyone or more of such joint promisor to perform the whole of the promise.

Also, each of two or more joint promisors may compel every other joint promisor to contribute equally with himself to the performance of the promise, unless a contrary intention appears, from the contract. In other words, if one of the joint promisors is made to perform the whole contract, he can call for a contribution from others.
It also states that if any one of two or more joint promisors makes a default in such contribution, the remaining joint promisor must bear the loss arising from such default in equal shares.
In the given case A, B, C, and D jointly promised to pay ₹ 6,00,000 to F.B. was unable to pay any amount and C could pay only ₹ 50,000 (i.e., 1/3 of ₹ 150,000). Hence loss due to default i.e., 4,50,000 will be borne equally by A and D.

Now since A is compelled to pay the entire amount, he can call for a contribution from his share is ₹ 1,50,000. Thus, the extent to which A can recover the amount’ from D is ₹ 2,75,000.

Question 19. Sheena was a classical dancer. She entered into an agreement with Shital Vidya Mandir for 60 dance performances. As per the contract, she was supposed to perform -every weekend and she will be paid ₹ 10,000/- per performance. However, after a month, she was absent without informing, me due to her reasons. Answer the following questions as per the Indian Contract Act, of 1872.

Whether the management of Shital Vidya Mandir has the right to terminate the contract?
If the management of Shital Vidya Mandir informed Sheena about its continuance, can the management still rescind the contract after a month on this ground subsequently?
Can the Shital Vidya Mandir claim damages, that it has suffered because of this breach in any of the above cases?

Answer:

When the contract is breached the aggrieved party gets the right to rescind the contract and claim damages as well. In the given case, Sheena failed to perform her part of the contract. Therefore, the management of Shital Vidya Mandir can terminate the contract as Sheena breached the contract.
If the management of Shital Vidya Mandir decides to continue with the contract, even after non-performanceÿ by Sheena and they intimate about the same to Sheena, then they cannot rescind the contract subsequently on grounds of breach of contract committed by her.
Whether the management of Shital Vidya Mandir, decides to terminate the contract or to continue with it, in either case, damages can ‘be claimed by Shital Vidya Mandir.

Question 20. Mr. S promises Mr. M to paint a family picture, for ₹ 20,000. and assures them to complete his assignment by 15 March 2023. Unfortunately, Mr. S died in a road accident on 1 March 2023 and his assignment remains undone.

Can Mr. M bind the legal representative of Mr. S for the promise made by Mr. S? Suppose Mr. S had promised to deliver some photographs to Mr. M on 15 March 2023 against a payment of ₹ 10,000 but he died before that day. Will his representative be bound to deliver the photographs in this situation? Decide as per the provisions of the Indian Contract Act, 1872.

Answer:

As per section 37 of the Indian Contract Act, of 1872, a contract that involves the use of personal skill or is founded on personal consideration comes to an end on the death of the promisor. As regards any other contract, the legal representatives of the deceased promisor are bound to perform unless a contrary intention appears from the contract.

In the above case, Mr. S who promised Mr. M to paint a family picture by 15^th March, 23 died on 1^st March, 23. Here, Mr. M cannot bind the legal representative of Mr. S for the promise made by him, and the legal representative of Mr. S is not bound to deliver the photographs in this situation.

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