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Laws of Contract 3

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36 views3 pages

Laws of Contract 3

It is detailed explanation on law of Contract 3 unit

Uploaded by

sunilempire19
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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11.

28 09:39
UNIT- Third

Contract which must be performed (Section 37-39), By whom contract must be


performed(Section 40-45), Time and Place for performance of Contract (Section 46-
50), Performance of Reciprocal Promises (Section 51-55), Discharge of Contract
(Section 56-57),

Certain Relations resembling to those created by Contract (Section 68-72) Leading


Case: Caltex (India) Ltd. V Bhagwani Devi, AIR 1969 SC 405

Contracts Which Must Be Performed (Sections 37-39):

Section 37: Parties must perform or offer to perform their promises unless
discharged or excused under the law.

Section 38: If one party offers to perform their promise and the other party
refuses, the offeror is discharged from their obligations.

Section 39: If a party refuses to perform their obligations, the other party may
terminate the contract or continue and claim damages.

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2. By Whom a Contract Must Be Performed (Sections 40-45):

Section 40: Performance must be by the promisor unless the contract requires
personal skill. Otherwise, an agent or legal representative can perform it.

Section 41: A third party's performance is valid if accepted by the promisee.

Section 42-45:

Joint promisors are collectively responsible.

If one defaults, others bear the liability.

A promisor paying more than their share can claim contribution from co-promisors.

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3. Time and Place for Performance of Contracts (Sections 46-50):

Section 46: When no time is fixed, performance must be within a reasonable time.

Section 47-49: When time and place are fixed, performance must occur accordingly.

Section 50: Performance must follow the agreed manner; otherwise, it can be
rejected.

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4. Performance of Reciprocal Promises (Sections 51-55):

Section 51: If mutual promises are to be performed simultaneously, both parties


must fulfill their obligations.

Section 52: The sequence of performance must adhere to the agreed order.

Section 54: Failure of one party to perform releases the other party from their
obligations.

Section 55: If time is the essence of a contract and one party delays, the other
party may terminate the contract or claim damages.

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5. Discharge of Contract (Sections 56-57):

Section 56: Contracts are discharged if:

Performance becomes impossible due to unforeseen events (doctrine of frustration).

Example: Natural disasters.

Section 57: Agreements to perform an impossible act are void.

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6. Certain Relations Resembling Contracts (Quasi-Contracts, Sections 68-72):

Section 68: Compensation for supplying necessities to a person incapable of


contracting.

Section 69: Reimbursement for payments made on behalf of someone else.

Section 70: Obligation to compensate for non-gratuitous benefits received.

Section 72: Money paid by mistake or coercion must be refunded.

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Leading Case: Caltex (India) Ltd. v. Bhagwani Devi (1969):

Facts:
Bhagwani Devi's deceased husband owned a petrol pump and had a contract with Caltex
for petrol supply. After his death, Bhagwani Devi continued using the petrol but
refused to pay for it.

Judgment:
The Supreme Court held that Bhagwani Devi was liable under Section 70 as she
enjoyed the benefit (use of petrol) non-gratuitously and was obligated to
compensate Caltex.
Principle:
Even in the absence of a formal contract, a party receiving a benefit must pay for
it if the benefit was not intended as a gift.

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