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Thread: When and under what circumstance contract duly entered into need not be performed

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    Moodle When and under what circumstance contract duly entered into need not be performed

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    Contracts which need not be performed
    Q. When and under what circumstance an original contract duly entered into need not be performed? Discuss. (2001)
    1. Introduction:
    Contract is the out come 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 1972.
    3. Contracts which need not 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 substitution 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 changes of parties,
    (b) 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    When all or some of the terms of contract are cancelled the contract is said to be rescinded.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.
    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 promise:
    Sec. 63 provides that a person who has right to demand the performance of the contract may:
    (a) Remit or dispense with wholly or impart or
    (b) Extend the time of performance or
    (c) Accept any other satisfaction instead of performance of the whole debt.
    A owes B Rs 10000. A pays to B and B accepts Rs. 5000 in full settlement of the debt of Rs. 10000. The old debt is discharged.
    Case law
    1999 SCMR 1497
    It was held that mere extension of time for the delivery of goods does not constitute novation of contract u/s 62 but it is covered by S. 63 of contract act.
    (III) Voidable contract:
    When a person at whose option a contract is voidable rescinds it, the other party there to need not perform any promise there in contained. In which he is promisor.
    A promise 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 promise is excused by such neglects or refusal as to any loss due to non performance caused there by.
    A contract with B to repair Bís building B neglects or refusal to point out 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 refuses.
    4. Conclusion:
    To conclude it can be said that, under contract act 1872 there are some circumstance when an original contract duly entered into by the parties need not to be performed. E. g. by agreement of the parties, voidable contracts etc. etc.

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