Performance of contract

Saroj Ghimire
MBA 2012
Nepalese Contract Act 2000 Section 74 states,"
each contractual parties must fulfill the
contractual obligations".

• " Performance of Contract"' means fulfilling of

their respective legal obligations created
under the contract by both the parties.
• The fulfillment of contractual obligations by
contractual parties according to the contract is
the performance of contract. It is also mode of
terminating contract after being performed.
• At the time of formation of contract the
parties bound themselves to fulfill the object
of the contract. They have to fulfill the
contractual duties. When the contractual
duties are fulfilled they become unbound
from the contractual promises.
• Thus, when a contract is duly performed by
both the parties, the contract comes to a
happy ending and nothing more remains.
 Time, manner and place of
performance (71 and 72)
• Time, manner and place of performance of a
contract are matters to be determined by an
agreement between the parties them selves.
• Time:
• Time is the essence of contract. If a contract
specifies the time, contract is to be performed
in that time.
• If the contract does not specify or not possible
to perform with in specified time, contract
must be performed in reasonable time.
 Manner of performance:
• If the contract specifies the manner, the
contract must be perfomed in that manner.
• If the manner is not specified, it must be
performed in reasonable manner.
 Place of performance (72)
• If any place has been speciifed for the performance of
the contract, then it should be performed accordingly.
• If one party is to hand over the goods to the other
party and the place has not been mentioned, then the
goods are to be handed over from the place where
they are stored.
• If the place of performance is not mentioned, except in
the circumstances mentioned above, the performing
party has to request the other party to specify the
reasonable and appropriate place. Upon such request,
the other party also has to specify the reasonable and
appropriate place.
 Circumstances in which contracts
need not be performed:
• Work under a contract need not be performed in any of the
following circumstances:
• (a) In case one party to the contract absolves the other party from
fulfilling the obligations according to the contract; (By waiver)
• (b) In case a voidable contract is made void by the party concerned;
• (c) In case one can not execute /perform the contract due to the
breach by the other party;
• (d) In case the contract need not to be performed under any
provision of this Act;
• (d) In case contract need not to be performed due to: [under
Section 79]

• Illegality
• war, floods landslides, fire, earthquakes, and volcanic eruptions
• Destruction of subject matter
• Death or lose of sense as contract depends on personal skill,
knowledge
• By Joint promissor
• In case two or more than two persons jointly
agree upon to perform or not to perform any
work, except when otherwise provided for in
the contract, all persons so concluding- the
contract may demand the execution of that
contract.
• By Agent on behalf Principal
 Who can demand performance?
• By the contractual party:
• Only a person who is a party to a contract may demand the
performance of contract from other party. Section 78
• Because a person cannot acquire rights under a contract to which
he is not a party.
• However now in case the contract has been signed for the benefit
of any person, such person may demand the execution of that
contract even if he/she is not a party to that contract. (By
Beneficiary)
• Legal heirs:
• After the contracting party is dead, the legal heirs can demand from
the other party to perform, unless it is not involved the exercise of a
personal skill or qualification.
• Joint Party:
By whom contract must be performed
• Nepalese Contract Act Section 77(1) states that,"
Except when the contract is required to be
performed by the person making it, he may have
it performed by his agent or a person appointed
by him or any other person on his behalf but no
contractual party may transfer the contractual
liabilities to any other person without the
consent of the other,
• Thus, contract depend on personal skill must be
performed by the contractual party.
Thus, contract must be performed by:
• A. promisor himself (if depends on his
personal skill)
• B. By the agent
• C. By legal representative
• Sec 77(2) states that third party can also
perform the contract if the promisee accepts
but he cannot afterwards claim in a way that
performance has to be made by the
contractual party himself.