Performance of contract

The fulfillment of the concerned parties' specific commitments as stated in the contract constitutes the performance of the contract. An agreement must be capable of being carried out, as we just discussed, as this is one of the requirements of a valid contract. Due to the fact that a contract was made between two parties, each party is responsible for keeping their end of the bargain. Performance of the contract is when the respective parties carry out their corresponding commitments. Every contract must be able to be carried out or it is void. If a contract is made for an impossibility, such as to fly across the sky without any equipment, it is null and invalid because it is not possible.

Actual performance refers to carrying out the agreement or deal in accordance with its conditions. Ram Chandra, for instance, is interested in purchasing the 1998 Ferrari that is on clearance at the neighborhood dealer. If Ram Chandra pays the dealer Rs 9, 700,000, Mr. Shiva, the dealer will sell Ram Chandra that sleek-looking German vehicle. Ram Chandra finally settles on the terms after some haggling and signs on the dotted line to purchase the car for Rs 9, 699, 500 less than the original amount. The agreement has been approved. The 1997 Ferrari will be delivered by Ram Chandra's vehicle dealer, Mr. Shiva, and Ram Chandra will then pay him the entire outstanding balance. The car is delivered by the dealer, and Ram Chandra pays Rs. 9,699,500 are the performance of the contract.

The bargaining term in the contract must be completed by both parties in order for it to be considered closed or resolved. In other words, the contract stays open until and unless both parties have properly carried out or conducted themselves in accordance with it.

The performance may classify into two types:

• Actual Performance:
  • It is referred to as actual performance when a promisor presented a performance to the promisee and the proposal was accepted by the promisee. As an illustration, Ashish and Ram agreed that Ram would pay the whole price for the items within three weeks of delivery and that Ashish would provide Makkhan rice to Ram within the next week from the date of the agreement. According to the contract, Ashish gives Ram the Makkhan rice within a week, and Ram also pays Ashish the agreed-upon sum.
• Attempted Performance:
  • ​​​​​​​When the promisee refused the promisor's offer to perform, the promisor made the offer. The term for it is attempted performance. For instance, Ashish agreed to send Ram Makkhan rice within a week. Ashish has fulfilled his end of the bargain if Ram declined to accept delivery of the Makkhan rice, hence this is an instance of attempted performance.

Who may perform contract?

• The promisor himself:
  • A contract can often be carried out by the promisor, either directly or through another competent party. However, when a contract involves or calls for taste, diligence, personal skill, etc., such as a contract to paint a painting or a contract of agency or service, the promisor must compel himself to carry out the terms of the contract. A contract will be discharged and the other party will no longer be liable in the event of a promisor's disability or death.
  • For instance, Ashish offers to draw Bishal a picture. Ashish must fulfill the pledge on his own, without assistance from others.
• The promisor or his agent:
  • The promisor or his representative may use a competent individual to undertake the work when no special expertise is required and anyone is capable of doing it. If the agreement is to sell the items, either the promisor or his agent or salesperson may carry it out.
  • For instance, Ashish guarantees Bishal that the products would be sold at a specific cost. Ashish may instruct his agent or salesperson to carry out the deal, or he may fulfill this pledge on his own.
• The Legal Representative:
  • Legal representatives of a deceased promisor are not obligated to carry out the terms of the agreement in the event of the promisor's death or incapacity prior to performance. However, the legal representative is responsible for carrying out the terms of a formal or impersonal contract. They are not individually accountable.
  • As an illustration, Ashish agrees to paint a picture for Bishal on a specific date at the agreed-upon fee. If Ashish passes away before the transaction day, the agreement cannot be carried out. As personal competence was a factor in this contract, Ashish's heirs are not held accountable.
  • Similar to this, Ashish agrees to give Bishal some products in exchange for Rs 10,000. Ashish passes away before the transaction day. The goods must be delivered to Bishal by Ashish's representatives, and Bishal must pay the agreed-upon price of Rs 10,000 to Ashish's representatives.
• The Third Person:
  • If a promisee accepts the promisor's performance from a third party, the promisor cannot thereafter enforce it against the promisee. The situation is resolved and the promisor is released once the third party fulfills or completes the contract and the promisee accepts that.
  • For instance, it was determined that the promisee could not enforce the promisee against the promisor for the remaining amount after accepting a smaller amount from the third party in full satisfaction of his claim.

Who can demand performance of the contract?

Since the general rule is that "a person cannot gain rights under a contract to which he is not a party," the only person or party who may request fulfillment of a promise in a contract is the promisee. The contract cannot be enforced by a third party or anybody else, even if it was made with their advantage in mind.

Legal representatives of the promisee have the right to require the promisor to perform the agreement if the promisee passes away.

As an illustration, Ashish assures Bishal that he will provide Calvina Rs 10,000. Since the contact was made between Ashish and Bishal, Bishal, not Calvina, is the one who can make a performance demand. If the promisee passes away, his legal representatives may demand that the contract be carried out.

Similar to this, when Ashish writes a check for Rs 10,000 in Calvina's favor, the banker gets Ashish's balance wrong and refuses to pay. Because Calvina is not a party to the contract, Bank is accountable to Ashish and not to Calvina.

Reference:

• Jones, S. (2012). http://freebcomnotes.blogspot.com. Retrieved from free BCom notes:http://freebcomnotes.blogspot.com/2016/04/performance-of-contract.html
• legal-dictionary.thefreedictionary.com/, 2011
• Shrestha, R. P. (2007).Business Law.Kathmandu: M.K.Books.
• W. (2016).businessdictionary. Retrieved from businessdictionary.com:http://www.businessdictionary.com/definition/performance-of-contract.html