Section 51: Promisor not bound to perform, unless reciprocal promisee ready and willing to perform.

Explanation: If a contract consists of a reciprocal promise that needs to be performed simultaneously, then the promisor need not perform his promise unless the promisee is ready to perform his reciprocal promise. Example: A & B contract that A shall deliver goods to B and B would pay him on delivery. A need not deliver the goods unless B promises to pay on delivery and B does not need to pay unless A promises to deliver the goods on payment.

Section 52: Order of performance of reciprocal promises. Explanation: If in the contract, the order of reciprocal promise is mentioned, it has to be performed in that manner or if the order is not mentioned, then it should be performed in the order which the transaction requires. Example: A is a printer and B is a binder. They enter a contract to get 500 books ready. Here the printer A has to print the books first and then only B can bind them.

Section 53: Liability of party preventing the event on which contract is to take place. Explanation: If a contract contains reciprocal promises and one party prevents the other from performing his promise, then the contract becomes voidable at the option of the second party and he can claim compensation for any loss sustained due to this. Example: A contracts to build B s house for a sum of money. After A purchases the materials, B doesn t allow him to build the house. The contract is voidable at the option of A and he can claim compensation for his loss.

Section 54: Effect of default as to that promise which should be first performed, in contract consisting of reciprocal promises. Explanation: When a contract consists of reciprocal promises, and one of them cannot be performed or its performance cannot be claimed, then such promisor cannot claim the performance of reciprocal promise and must make compensation to the other party. Example: A & B enter a contract where A has to execute a builder s work for which B will provide the raw materials. If B does not fulfill his promise then A is not bound to execute the work. Instead he can claim compensation from B for the nonperformance of his promise.

Section 55: Effect of failure to perform at fixed time, in contract in which time is essential. Explanation: When a party to contract promises to do a certain thing before a certain specified time and fails to do so before the specified time, then the contract is voidable at the option of the promisee, if it had time as the essence. Example: A asks B, a caterer, to deliver food items for his function before 3 pm the next day. B delivers the materials at 9 pm. The contract is voidable at the option of A.

Section 56: Agreement to do an impossible act. Explanation: An agreement to do an act impossible in itself is void. Example: A agrees with B to discover treasure by magic.. The agreement becomes void.

Section 57: Reciprocal promise to do things legal, and also other things illegal. Explanation: Where persons promise firstly promise to do things which are legal and under specified circumstances to do something which are illegal, then the first set of promises is a contract, but the second is a void agreement. Example: A and B agree that A shall sell a house to B for Rs. 10,000, but that, if B uses it as a gambling house, then he shall pay A Rs. 50,000 for it. Here, the first set of promise is a valid contract, whereas the second set of promise is illegal and hence void.

Section 58: Alternative promise, one branch being illegal. Explanation: In case of an alternative promise, one branch of which is legal and the other illegal, the legal branch alone can be enforced. Example: A and B agree that A shall pay B a sum of Rs. 1000 for which B would give A either rice or smuggled opium. This is a valid contract to deliver rice, but a void agreement as to the opium.

Section 59: Application of payment where debt to be discharged is indicated. Explanation: Where a debtor, owing several distinct debts to one person, makes a payment to him with express intimation implying that the payment is to made to the discharge of some particular debt, the payment, if accepted, must be applied accordingly. Example: A owes B, among other debts, a sum of Rs. 1000. On Bs demand, A pays Rs. 1000 to B. This payment is to be applied to the discharge of the debt of which B had demanded payment.

Section 60: Application of payment where debt to be discharged is not indicated. Explanation: In the event of the debtor not intimating the creditor that the payment given by him is for which debt, then it is upto the discretion of the creditor to which debt he applies that payment. Example: A takes Rs 1000 from B. After two months, A takes another Rs. 2000 from B. And then, A pays Rs. 1000 back to B after a week s time without telling him for which debt is this payment for. Then it is upto the discretion of B to adjust this payment of Rs. 1000 to either of the two debts.