Contracts Which Need Not To Be Performed

1. INTRODUCTION:

Contract is the outcome of mutual agreement between two or more parties. In the similar manner parties to the contract may consent to terminate the contract.

2. RELEVANT SECTIONS:

Sect 62 to 67 of Contract Act 1872.

3. CONTRACTS WHICH NEED NOT TO BE PERFORMED:

Following are the circumstances when any original contract duly entered into need not be performed.

(I) TERMINATION BY AGREEMENT:

If parties to contract agree to novation, Rescission or alteration, the original contract need not be performed. In such cases original contract disappears and is substituted by a new contract.

(a) Novation:

When the parties to a contract agree to substitute a new contract for a contract, that is called novation.

(i) Kinds:

(a) A novation involving change of parties, (a) A novation involving substitution of a new contract in the place of old contract.

(b) Rescission:

When all or some of the terms of contract are cancelled. the contract is said to be rescinded.

(i) Modes of Rescission:

Rescission may occur.

(a) By mutual consent of the parties.

(b) Where one party fails to perform his contractual obligation, the other party may rescind the contract.

(C) Alteration:

When one or more of the terms of the contract is altered by actual consent of the parties the contract is said to be altered.

> Example:

A promises to supply certain goods to B one year after date. By that time goods go out fashion. A and B mutually cancel the contract. A need not perform the contract.

(II) REMISSION BY PROMISEE:

Sec. 63 provides that a person who has right to demand the performance of the contract may:

(a) remit or dispense with wholly or inpart or

(b) extend the time of performance or

(c) accept any other satisfaction instead of performance of the whole debt.

> Example:

A owes B Rs – 10000. A pays to B and B accepts Rs 5000 in full settlement of the debt of Rs – 1000. The old debt is discharged.

(III) VOIDABLE CONTRACT:

When a person at whose option a contract is void-able rescinds it, the other party there to need not perform any promise there in contained. In which he is promisor.

> Example:

A promises to buy certain goods from B under Fraud. B can avoid a contract If B rejects a contract. A need not perform the contract.

(IV) REFUSAL TO ACCEPT PERFORMANCE:

If any promise neglects or refuses to afford the promisor reasonable facilities for the performance of his promise, the promisor is excused by such neglects or refusal as to any loss due to non performance caused there by.

> Example:

A contract with B to repair B's building B neglects or refuses to point out to A the places in which the building requires repair. A is excused for non performance of the contract. If it is caused by such neglect or refusal.

4. CONCLUSION:

To conclude I can say that, under contract Act 1872 There are some circumstances when an original contract duly entered into by the parties need not to be performed. Eg by agreement of the parties, voidable contracts etc. etc. The fulfillment of the legal obligation in a contract is called performance of the contract. Chapter vi of the contract Act deals with the performance of the contracts.



Source by CH Omar Ejaz

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