EFFECT OF REFUSAL TO ACCEPT OFFER OF PERFORMANCE & PARTY TO PERFORM PROMISE

Written By:- Ananya Rai (Amity Law School)

EFFECT OF REFUSAL TO ACCEPT OFFER OF PERFORMANCE

According to Section 38 of the Act – where a promisor has made an offer of performance to the promisee, and the offer has not been accepted, then the promisor is not responsible for non – performance, nor does he thereby lose his rights under the contract.

Every such offer must fulfill certain conditions which are as follows, namely:

  • It must be unconditional;
  • It must be made at a proper time and place, and under such circumstances that the person to whom it is made may have a reasonable opportunity of ascertaining that the person by whom it is made is able and willing there and then to do the whole of what he is bound by his promise to do;
  • If the offer is an offer to deliver anything to the promisee, then the promisee must have a reasonable opportunity of seeing that the thing offered is the thing which the promisor is bound by his promise to deliver.

An offer to one of several joint promises has the same legal consequences as an offer to all of them.

EFFECT OF A REFUSAL OF PARTY TO PERFORM PROMISE

According to Section 39, when a party to a contract has refused to perform or disabled himself from performing his promise in its entirety, the promisee may put an end to the contract, unless he has signified, by words or conduct, his acquiescence in its continuance.

Example: A, singer, enters a contract with B, the manager of a theatre, to sing at his theatre two nights in every week during the next two months, and B engages to pay her Rs 1,00,000 for each night’s performance. On the sixth night, A wilfully absents herself from the theatre. B is at liberty to put an end to the contract.

Analysis of Section 39

From language of Section 39 in the case under consideration, the following two rights accrue to the aggrieved party, namely, (a) to terminate the contract; (b) to indicate by words or by conduct that he is interested in its continuance. In case the promisee decides to continue the contract, he would not be entitled to put an end to the contract on this ground subsequently. In either case, the promisee would be able to claim damages that he suffers as a result on the breach.