PERFORMANCE OF RECIPROCAL PROMISES

 PERFORMANCE OF RECIPROCAL PROMISES

Sections 51 to 54 deal with the performance of reciprocal promises. The rules contained in these Sections are as under:

(1)    Contracts requiring simultaneous performance

According to Section 51, "When a contract consists of reciprocal promises to be simultaneously performed, no promisor need 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 party 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. This may be further explained through the following illustrations:

(a) A and B contract that A shall deliver goods to B to be paid for by B on delivery. A need not deliver the goods, unless B is ready and willing to pay for the goods on delivery. B need not pay for the goods unless A is ready and willing to deliver them on payment.

(b) A and B contract that A shall deliver goods to B at a price to be paid by instalments, the first instalment to be paid on delivery.

A need not deliver, unless B is ready and willing to pay the first instalment on delivery.

B need not pay the first instalment, unless A is ready and willing to deliver the goods on payment of the first instalment.

(2)    When the order of performance expressly fixed by the contract

According to Section 52 When the order in which reciprocal promises are to be performed is expressly fixed by the contract, they shall be performed in that order; and where the order is not expressly fixed by the contract, they shall be performed in that order which the nature of the transaction requires.

Illustrations

(a) A and B contract that A shall build a house for B at a fixed price. A's promise to build the house must be performed before B's promise to pay for it.

(b) A and B contract that A shall make over his stock-in-trade to B at a fixed price, and B promises to give security for the payment of the money. A's promise need not be performed until the security is given, for the nature of the transaction requires that A should have security before he delivers his stock.

(3)    One party preventing the other from performing his reciprocal promise

According to Section 53:

"When a contract contains reciprocal promises, and one party to the contract prevents the other from performing his promise, the contract voidable at the option of the party so prevented; and he is entitled to compensation from the other party for any loss which he may sustain in consequence of the non-performance of the contract,"

 

 

When one of the parties is ready and willing to perform his part of the contract and the other prevents him from doing so, the party preventing the performance is at fault. The party, who has been prevented from performing the contract has two remedies:

(i)                  He may avoid the contract, and

(ii)                may claim compensation for the loss suffered by him due to the non-performance of the contract.

For example, A agrees to remove the waste rock lying at B's mine, and B agrees to supply a crusher to do the job. If B provides a crusher of an inadequate capacity due to which the work has to be stopped, A would be entitled to sue B to recover compensation for the expenses incurred by him and also for the loss of profits. Similarly, when A and B contract that B shall execute certain work for a thousand rupees, B is ready and willing to execute the work accordingly, but A prevents him from doing so. The contract is voidable at the option of B; and if he elects to rescind it, he is entitled to recover from A compensation for any loss which he has incurred by its non-performance.

(4)    Non-performance of a reciprocal promise by the party who is to perform first

When the parties have decided about the order of performance, and one of the parties is to perform his promise first, and the other thereafter, then the non-performance by one who is to perform it first disentitles him from claiming performance from the other, and also renders him liable to pay compensation to the other party for any loss arising out of the non-performance of the contract. Section 54 contains the following provision in this regard.

Illustrations

(a) A hires B's ship to take in and convey, from Calcutta to the Mauritius, a cargo to be provided by A, B receiving a certain freight for conveyance. A does not provide any cargo for the ship. A cannot claim the performance of B's promise, and must make compensation to B for the loss which B sustains by the non-performance of the contract.

(b) A contracts with B to execute certain builder's work for a fixed price, B supplying the scaffolding and timber necessary for the work. B refuses to furnish any scaffolding, or timber, and the work cannot be executed. A need not execute the work, and B is bound to make compensation to A for any loss caused to him by the non-performance of the contract.

(c) A contracts with B to deliver to him, at a specified price certain merchandize on board of a ship which cannot arrive for a month, and B engages to pay for the merchandize within a week from the date of the contract. B does not pay within the week. A's promise to deliver need not be performed, and B must make compensation.

(d) A promises B to sell him one hundred bales of merchandize to be delivered next day, and B promises A to pay for them within a month. A does not deliver according to his promise. B's promise to pay need not be performed, and A must make compensation.

Reciprocal promise to do things legal and also other things illegal (Section 57)

Sometimes, persons may reciprocally promise, firstly to do certain things which are legal, and secondly, under specified circumstances, to do certain other things which are illegal, the question which in such cases arises is regarding the validity of such promise. The answer depends on the fact whether legal and illegal promises are severable or not. If they are severable, then the first set of promises is a contract, but the second is void agreement.' But if the illegal part of the agreement cannot be separated from the legal one, and the two constitute an integral whole, the whole of the agreement is void. For example, A and B agree that A shall sell B a house for 10,000 rupees, but that if B uses it as a gambling house, he shall pay 50,000 rupees for it. The first set of reciprocal promises, namely, to sell the house and to pay 10,000 rupees for it, is a contract. The second set is for an unlawful object, namely, that B may use the house as a gambling house, and is a void agreement.? But, when the legal and illegal parts are inseparable, the whole agreement is void. Thus, if a married woman agrees to live in adultery and also agrees to render certain services as a housekeeper, for a consolidated remuneration of Rs. 50 per month, the lawful and unlawful parts are inseparable, and the whole of the agreement is void, and the plaintiff will not be entitled to recover even for the services as a housekeeper.

Alternative promises of which one branch is legal and the other illegal

Section 58 provides that in the case of an alternative promise, one branch of which is legal and the other illegal, the legal branch alone can be enforced.

Illustration

A and B agreed that A shall pay B 1,000 rupees, for which B shall afterwards deliver to A either rice or smuggled opium. This is a valid contract to deliver rice, and a void agreement as to the opium.