What do you understand by performance of contract under the circumstances of contract need not to be performed
15/September/2025 22:11
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Great question! This goes to the doctrine of performance of contracts under the Indian Contract Act, 1872. Let’s cover it step by step:
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Performance of Contract
Meaning
When parties to a contract fulfill or carry out their obligations as promised, it is called performance of contract.
Section 37 of the Indian Contract Act, 1872 states:
> “The parties to a contract must either perform, or offer to perform, their respective promises, unless such performance is dispensed with or excused under the provisions of this Act, or of any other law.”
? In short: Normally, contracts must be performed, but in certain cases, performance is not required.
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Circumstances When Contract Need Not be Performed
There are situations when performance is excused or becomes unnecessary. These are:
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1. By Mutual Consent (Sec. 62–67)
If both parties agree to substitute a new contract, or rescind/alter the old contract, performance of the original contract is not needed.
This is called novation.
Example: A owes B ₹1,00,000. Later, both agree that C will pay B instead of A. The original contract is discharged.
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2. Performance Dispensed with by Law
Certain circumstances under law relieve the parties from performing:
Void contracts – A contract that becomes void (e.g., because of illegality) need not be performed.
Voidable contracts – If rescinded by the aggrieved party, no further performance is required.
Example: If a contract is induced by coercion, and the aggrieved party rescinds it, no performance is needed.
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3. Impossibility of Performance (Sec. 56 – Doctrine of Frustration)
If performance becomes impossible due to supervening events, the contract becomes void.
Examples:
Destruction of subject matter (concert hall burns before event).
Change in law (government bans an activity agreed in contract).
Death or incapacity in personal service contracts.
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4. Promisee Dispenses with or Remits Performance (Sec. 63)
The promisee may dispense with (waive) performance, extend the time, or accept any satisfaction instead of performance.
Example: A owes B ₹5,000. B says, “Pay me only ₹3,000 and I will discharge the debt.” A pays ₹3,000, and the contract is discharged.
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5. By Operation of Law
In cases like merger of rights, insolvency, or unauthorized contracts, performance is excused.
Example: If a debtor is declared insolvent, he is discharged from most debts.
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6. If Performance Becomes Unnecessary
If the object of the contract has already been achieved or has ceased to exist.
Example: A contracts to marry B, but B dies before marriage. The contract need not be performed.
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Conclusion
General rule: Parties must perform their obligations.
Exceptions: Performance is not required if:
1. Contract is novated/rescinded/altered by mutual consent,
2. Performance is dispensed with by law,
3. Performance becomes impossible (doctrine of frustration),
4. Promisee waives or remits performance,
5. Discharged by operation of law,
6. Performance becomes unnecessary due to death/destruction/other reasons.
