Who Performs The Contract? Meaning, Types

In a contract, there are typically two main parties involved: the promisor and the promisee. The promisee is the party to whom a commitment is made, while the promisor is the party responsible for fulfilling that commitment. The Indian Contract Act of 1872 outlines the roles and responsibilities of those who fulfill a contract in three specific sections: Section 40, Section 41, and Section 42.

Contract Performance

Contract performance involves fulfilling the obligations outlined in a contract between parties. When people go into a contract, each of them has the duty to fulfill the contract for the duration of the contract. The most common way to terminate a contract is through its breach. When one party performs its contractual obligations, the contract does not bind any further, and the other party too should fulfill its part.

Section 27 of the Indian Contract Act provides that promises made in a contract extend to the promisor’s representatives, unless otherwise stated in the contract terms. Therefore, all the parties involved have to perform or promise to perform their promises according to the agreement.

Who is responsible for carrying out a contract?

A contract can be fulfilled by the following parties:

The Promisor

Based on Section 40, if the contract shows or if the people involved think that a promise in it should be done by the one who made the promise, his legal helpers, or someone he has named as able, then that person, his legal aides, or the capable individual named by him must do the promise.

An Agent

An Agent, who is legally okay to act for anothe­r person or group, can carry out the contract if it doesn't have to be done in person. The one who made the promise or their agent can pick a capable person to complete the contract (Section 40, Para 2).

Legal Representative

In cases where the contract involves personal talent or personal considerations, it becomes void upon the promisor's death. However, for other contracts, the legal representatives of a deceased promisor are obligated to fulfill them under Section 37, Paragraph 2.

Third Person

Section 41 states that if a promisee accepts the performance of a promise by a third party, they cannot subsequently enforce the promise against the original promisor.

Joint Promisors

Section 42:

In the case of joint promises, as per Section 42, all parties making the promise are collectively responsible for fulfilling it. This joint liability continues during their lifetimes and even after the death of the last survivor, the representatives of all are jointly bound to fulfill the promise.

Section 45:

Similarly, when a person has made a promise to two or more individuals jointly, the right to claim performance lies with them during their lifetimes and, after their demise, with the representatives of the deceased person jointly with the survivors. Following the death of the last survivor, the representatives of all are entitled to the claim jointly (Section 45).

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Types of Performance in a Contract

There are three types of performance in a contract: actual, substantial, and perfect.

Actual Performance: This happens when the two sides meet their contract duties exactly how they said they would. This usually happens when goods or services are given the way everyone agreed to.

Substantial Performance: Substantial performance happens when not every contract duty is met, but most are. Like, if a worker finishes most of their job but not all, it counts as significant performance. The courts decide if this level of work is good enough for payment.

Breach of Contract: A breach of contract happens when any party fails to perform their obligations, or if the substantial performance falls short of satisfaction.